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Item 1A. Risk Factors

2023-02-17 compared with 2022-02-25 · 264 added, 188 removed, 445 unchanged (50% of the section changed)

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If any of the events described below were to occur, our businesses, prospects, financial condition, results of operations and/or cash flows could be materially adversely affected.

Risk Factor Summary

The following is a summary of the material risk factors that could adversely affect our business, financial condition, and results of operations:

Factors Relating to Our Corporate History and Structure

● As a holding company we could be unable to obtain cash in amounts sufficient to service our financial obligations or meet our other commitments.

● Other than cash generated from our participation in Charter’s stock repurchase program, we do not have access to the cash that Charter generates from its operating activities.

● We rely on Charter to provide us with the financial information that we use in accounting for our ownership interest in Charter as well as information regarding Charter that we include in our public filings.

● We may become subject to the Investment Company Act of 1940.

● Our company has overlapping directors and officers with Liberty, Qurate Retail, TripCo, and ABH (defined below) which may lead to conflicting interests.

● Certain of our inter-company agreements were negotiated while we were a subsidiary of Liberty, and hence may not be the result of arms’ length negotiations.

● Our ability to use net operating loss and disallowed business interest carryforwards to reduce future tax payments could be negatively impacted if there is an “ownership change”.

Factors Related to Our and Our Subsidiaries’ Indebtedness

● Our company may have future capital needs and may not be able to obtain additional financing, or refinance or renew our existing indebtedness, on acceptable terms.

● We and our subsidiaries have significant indebtedness, which could adversely affect our business and financial condition.

● The agreements that govern our and our subsidiaries’ current and future indebtedness may contain various affirmative and restrictive covenants that will limit our discretion in the operation of our business.

● Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Factors Relating to GCI Holdings

● GCI faces competition that may reduce its market share and harm its financial performance.

● If GCI experiences customer losses, the Company’s financial performance will be negatively impacted.

● Adverse economic conditions in the U.S.

and inflationary pressures on input costs and labor could impact GCI’s results of operations.

● GCI may be unable to obtain or maintain the roaming services it needs to remain competitive.

● Changes to or interpretations of existing statutes, rules, regulations, or the adoption of new ones, could adversely affect GCI’s business, financial position, results of operations or liquidity.

● USF receivables and contributions are subject to change due to regulatory actions taken by the FCC or legislative actions that change the rules and regulations governing the USF program.

● Failure to comply with USF program requirements may have an adverse effect on GCI’s business and the Company’s financial position.

● Loss of GCI’s ETC status would disqualify it for USF support, which would have an adverse effect on the Company’s business, financial position, results of operations or liquidity.

● GCI may not meet its performance plan milestones under the Alaska High Cost Order.

● GCI may lose USF high cost support if another carrier adds 4G LTE service in an area where it currently provides 4G LTE service.

● The decline in GCI’s Other revenue results of operations may accelerate.

● Failure to stay abreast of new technology could affect GCI’s ability to compete in the industry.

● GCI’s operations, which are geographically concentrated in Alaska, are impacted by the economic conditions in Alaska, and GCI may not be able to continue to increase its share of the existing market for its services.

● Natural or man-made disasters or terrorist attacks could have an adverse effect on GCI’s business.

● Cyberattacks or other network disruptions could have an adverse effect on the Company and GCI’s business.

● Increases in data usage on GCI’s wired and wireless networks may cause network capacity limitations, resulting in service disruptions, reduced capacity or slower transmission speeds for GCI’s customers.

● Prolonged service interruptions or system failures could affect GCI’s business.

● GCI’s ability to immediately restore the entirety of its service may be limited and the Company could incur significant costs if failures occur in GCI’s undersea fiber optic cable systems or its TERRA facilities.

● GCI’s ability to immediately restore the entirety of its service may be limited if a failure occurs in GCI’s satellite communications systems.

● GCI will not be able to meet the needs of its customers if it does not obtain the necessary communications equipment,

● If GCI becomes subject to substantial uninsured liabilities due to damage or loss to certain of its transmission facilities, the Company’s financial position, results of operations or liquidity may be adversely affected.

● Climate change and increasingly stringent environmental laws, rules and regulations, and customer expectations, could adversely affect GCI’s business.

● Any errors, cyber-attacks or other operational disruption to GCI’s third-party vendor’s customer billing systems could have adverse operational, financial and reputational effects on the Company’s business.

● Any significant impairment of GCI’s indefinite-lived intangible assets would lead to a reduction in its net operating performance and a decrease in its assets.

Factors Relating to Charter

● Charter operates in a competitive business environment affecting its ability to attract and retain customers.

● If Charter is unable to procure the necessary services, equipment, software or licenses from its third-party service providers, suppliers and licensors on reasonable terms and on a timely basis, its ability to offer services could be impaired.

● Charter may not have the ability to pass on to its customers all of the increases in programming costs, which could adversely affect its cash flow and operating margins.

● Any failure to respond to technological developments and meet customer demand for new products and services could adversely affect its ability to compete effectively.

● Charter’s business may be adversely affected if it cannot continue to license or enforce the intellectual property rights on which its business depends.

● Events could disrupt or result in unauthorized access to Charter’s networks, information systems or properties and could impair its operating activities and negatively impact Charter’s reputation and financial results.

● Charter’s exposure to the economic conditions of its current and potential customers, vendors and third parties could adversely affect its cash flow, results of operations and financial condition.

● If Charter is unable to retain key employees, its ability to manage its business could be adversely affected.

● Charter has a significant amount of debt and expects to incur significant additional debt in the future, which could

adversely affect its financial condition and its ability to react to changes in its business.

● The agreements and instruments governing Charter’s debt contain restrictions and limitations that could significantly affect its ability to operate its business, as well as significantly affect its liquidity.

● Charter’s business is subject to extensive governmental legislation and regulation, which could adversely affect its business.

● Changes to existing statutes, rules, regulations, or interpretations thereof, or adoption of new ones, or participation in new regulatory programs, could have an adverse effect on Charter’s business.

● Tax legislation and administrative initiatives or challenges to Charter’s tax and fee positions could adversely affect its results of operations and financial condition.

● The failure Charter to renew a franchise or the grant of additional franchises in one or more service areas could adversely affect its business.

Factors Relating to our Common Stock and the Securities Market

● Our stock price is directly affected by the results of operations of Charter and developments in its business.

● There is no meaningful trading market for our Series B common stock quoted on the OTC Markets.

● It may be difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders.

● Holders of a single series of our common stock may not have any remedies if an action by our directors has an adverse effect on only that series of our common stock.

Factors Relating to Our Corporate History and Structure

We are a holding company, and we could be unable to obtain cash in amounts sufficient to service our financial obligations or meet our other commitments.

Our ability to meet our current and future financial obligations, including to make debt service obligations under the Margin Loan Agreement (defined below) and the Company Debentures (defined below), and other contractual commitments depends upon our ability to access cash.

We are a holding company, and our sources of cash include our available cash balances, net cash from the operating activities of our wholly-owned subsidiaries, any dividends and interest we may receive from our investments, available funds under the Margin Loan Agreement (defined below) (which was $1.0 billion as of December 31, 2021) and proceeds from any asset sales or other forms of asset monetization we may undertake in the future.

We are a holding company, and our sources of cash include our available cash balances, net cash from the operating activities of our wholly-owned subsidiaries, any dividends and interest we may receive from our investments, available funds under the Margin Loan Agreement (defined below) (which was $900 million as of December 31, 2022) and proceeds from any asset sales or other forms of asset monetization we may undertake in the future.

In addition, the ability of our operating subsidiaries to pay dividends or to make other payments or advances to us depends on their operating results and any statutory, regulatory or contractual restrictions to which they may be or may become subject.

Some state regulators have imposed, and others may consider imposing on regulated companies, including us, cash management practices that could limit the ability of such regulated companies to transfer cash between subsidiaries or to the parent company.

While none of the existing state regulations materially affect our cash management, any changes to the existing regulations or imposition of new regulations or restrictions may materially adversely affect our ability to transfer cash within our consolidated companies.

Other than cash generated from our participation in Charter’s stock repurchase program, we do not have access to the cash that Charter generates from its operating activities.

Notwithstanding our ownership interest in Charter and our having three nominees on its thirteen-member board of directors, we have no ability to cause Charter to pay dividends to us, and we cannot cause Charter to make funds available to us except to the extent we are obligated to participate in Charter’s stock repurchase program pursuant to the terms of the Stockholders Agreement and the letter agreement entered into on February 23, 2021 in order to reduce our percentage equity interest, on a fully diluted basis, to the Equity Cap.

Charter generated approximately $16,239 million, $14,562 million and $11,748 million of cash from its operations during the years ended December 31, 2021, 2020 and 2019, respectively.

Charter generated approximately $14.9 billion, $16.2 billion and $14.6 billion of cash from its operations during the years ended December 31, 2022, 2021 and 2020, respectively.

Charter uses the cash it generates from its operations primarily to fund its business operations, service its debt and other financial obligations and repurchase shares of its common stock.

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In addition, if we were to become inadvertently subject to the Investment Company Act and failed to register as an investment company in violation of the Investment Company Act, such violation could subject us to material adverse consequences, including potentially significant regulatory penalties and the possibility that our contracts would be deemed unenforceable.

Our company has overlapping directors and officers with Liberty, Qurate Retail, TripCo and Liberty Media Acquisition Corporation, which may lead to conflicting interests.

As a result of our spin-off from Liberty in 2014 and other transactions between 2011 and 2014 that resulted in the separate corporate existence of Liberty, Qurate Retail, and TripCo, as well as the initial public offering of Liberty Media Acquisition Corporation (“LMAC”) in January 2021, all of our executive officers also serve as executive officers of Liberty, Qurate Retail, TripCo and LMAC, and there are overlapping directors.

Other than Liberty’s ownership of LMAC’s sponsor, which beneficially owns 20% of LMAC’s outstanding common stock as of December 31, 2021, none of these companies has any ownership interest in any of the others.

Our company has overlapping directors and officers with Liberty, Qurate Retail, TripCo and, following the completion of the proposed split-off announced by Liberty with respect to its Liberty Braves Group, is expected to have overlapping directors and officers with Atlanta Braves Holdings, Inc.

(“ABH”), which may lead to conflicting interests.

As a result of our spin-off from Liberty in 2014 and other transactions between 2011 and 2014 that resulted in the separate corporate existence of Liberty, Qurate Retail and TripCo, as well as Liberty’s proposed split-off of ABH, all of our executive officers also serve (or will serve in the case of ABH) as executive officers of Liberty, Qurate Retail, TripCo and ABH, and there are overlapping directors.

None of these companies has any ownership interest in any of the others (other than Liberty’s ownership of ABH pending completion of the transactions to effect the proposed split-off of ABH).

Our executive officers and members of our company’s board of directors have fiduciary duties to our stockholders.

Likewise, any such persons who serve in similar capacities at Liberty, Qurate Retail, TripCo, LMAC or any other public company have fiduciary duties to that company’s stockholders.

For example, there may be the potential for a conflict of interest when our company, Liberty, Qurate Retail, TripCo or LMAC pursues acquisitions and other business opportunities that may be suitable for each of them.

Likewise, any such persons who serve in similar capacities at Liberty, Qurate Retail, TripCo, ABH or any other public company have fiduciary duties to that company’s stockholders.

For example, there may be the potential for a conflict of interest when our company, Liberty, Qurate Retail, TripCo or ABH pursues acquisitions and other business opportunities that may be suitable for each of them.

Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting more than one of the companies to which they owe fiduciary duties.

Each of our company, TripCo and LMAC has renounced its rights to certain business opportunities and their respective restated certificate of incorporation provides that no director or officer of the respective company will breach their fiduciary duty and therefore be liable to the respective company or its stockholders by reason of the fact that any such individual directs a corporate opportunity to another person or entity (including Liberty, Qurate Retail, TripCo and LMAC) instead of the respective company, or does not refer or communicate information regarding such corporate opportunity to our company, unless (x) such opportunity was expressly offered to such person solely in his or her capacity as a director or officer of the respective company or as a director or officer of any of the respective company’s subsidiaries, and (y) such opportunity relates to a line of business in which the respective company or any of its subsidiaries is then directly engaged.

In addition, any potential conflict that qualifies as a “related party transaction” (as defined in Item 404 of Regulation S-K) is subject to review by an independent committee of the applicable issuer’s board of directors in accordance with its corporate governance guidelines.

Each of our company and TripCo has renounced its rights to certain business opportunities and their respective restated certificate of incorporation provides that no director or officer of the respective company will breach their fiduciary duty and therefore be liable to the respective company or its stockholders by reason of the fact that any such individual directs a corporate opportunity to another person or entity (including Liberty, Qurate Retail and TripCo) instead of the respective company, or does not refer or communicate information regarding such corporate opportunity to our company, unless (x) such opportunity was expressly offered to such person solely in his or her capacity as a director or officer of the respective company or as a director or officer of any of the respective company’s subsidiaries, and (y) such opportunity relates to a line of business in which the respective company or any of its subsidiaries is then directly engaged.

In addition, we understand that ABH is expected to adopt similar renouncement and waiver provisions in its restated articles of incorporation in connection with the closing of the proposed split-off.

Any other potential conflicts that arise will be addressed on a case-by-case basis, keeping in mind the applicable fiduciary duties owed by the executive officers and directors of each issuer.

From time to time, we may enter into transactions with Liberty, Qurate Retail, TripCo, LMAC and/or their respective subsidiaries or other affiliates.

There can be no assurance that the terms of any such transactions will be as favorable to our company, Liberty, Qurate Retail, TripCo, or LMAC or any of their respective subsidiaries or affiliates as would be the case where there is no overlapping officer or director.

From time to time, we may enter into transactions with Liberty, Qurate Retail, TripCo, ABH and/or their respective subsidiaries or other affiliates.

There can be no assurance that the terms of any such transactions will be as favorable to our company, Liberty, Qurate Retail, TripCo, ABH or any of their respective subsidiaries or affiliates as would be the case where there is no overlapping officer or director.

Certain of our inter-company agreements were negotiated while we were a subsidiary of Liberty.

We entered into a number of inter-company agreements covering matters such as tax sharing and our responsibility for certain liabilities previously undertaken by Liberty for certain of our businesses.

In addition, we entered into a services agreement

with Liberty pursuant to which it provides to us certain management, administrative, financial, treasury, accounting, tax, legal and other services, for which we reimburse them on a fixed fee basis, which was amended to provide that components of our President and Chief Executive Officer’s compensation will either be paid directly to him by our company or reimbursed to Liberty, in each case, based on the allocation set forth in the amendment.

In addition, we entered into a services agreement with Liberty pursuant to which it provides to us certain management, administrative, financial, treasury, accounting, tax, legal and other services, for which we reimburse them on a fixed fee basis, which was amended to provide that components of our President and Chief Executive Officer’s compensation will either be paid directly to him by our company or reimbursed to Liberty, in each case, based on the allocation set forth in the amendment.

The terms of all of these agreements (other than the amendment to the services agreement) were established while we were a wholly-owned subsidiary of Liberty, and hence may not be the result of arms’ length negotiations.

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Our ability to use net operating loss and disallowed business interest carryforwards to reduce future tax payments could be negatively impacted if there is an “ownership change” as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), of our Company.

At December 31, 2021, we had a deferred tax asset attributable to federal and state net operating losses and disallowed business interest carryforwards of $94 million and under the Code, we may carry forward our federal net operating losses and disallowed business interest deductions in certain circumstances to offset current and future taxable income and reduce our federal income tax liability, subject to certain requirements and restrictions.

At December 31, 2022, we had deferred tax assets attributable to federal and state net operating losses and disallowed business interest carryforwards of $32 million and under the Code, we may carry forward our federal net operating losses and disallowed business interest deductions in certain circumstances to offset current and future taxable income and reduce our federal income tax liability, subject to certain requirements and restrictions.

If we experience an “ownership change,” as defined in Section 382 of the Code and related Treasury regulations (generally, a cumulative change in ownership that exceeds 50% of the value of a corporation's stock over a rolling three-year period) at a time when our market capitalization is below a certain level or proposed Treasury regulations under Section 382 of the Code issued during 2019 have become final and are applicable (taking into account the delayed effective date of such regulations), our ability to use our federal net operating loss and disallowed business interest carryforwards could be substantially limited.

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Further, our and our subsidiaries’ ability to service our respective debt and any other obligations will require access to funds, which may be restricted.

As of December 31, 2021, we had approximately $3.7 billion principal amount of debt outstanding, consisting of (i) $1.3 billion outstanding under a credit agreement (as amended, the “Margin Loan Agreement”) governing a multi-draw margin loan agreement credit facility entered into in 2017 by a bankruptcy remote wholly owned subsidiary (“SPV”) of Liberty Broadband;

As of December 31, 2022, we and our subsidiaries had approximately $3.8 billion principal amount of debt outstanding, consisting of (i) $1.4 billion outstanding under a credit agreement (as amended, the “Margin Loan Agreement”) governing a multi-draw margin loan agreement credit facility entered into in 2017 by a bankruptcy remote wholly owned subsidiary (“SPV”) of Liberty Broadband;

(ii) $575 million outstanding under our 2.75% Exchangeable Senior Debentures due 2050 and $825 million outstanding under our 1.25% Exchangeable Senior Debentures due 2050 (collectively, the “Company Debentures”);

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(iv) $600 million outstanding under GCI, LLC’s 4.750% senior notes due 2028 (the “Senior Notes”);

and (v) $399 million in outstanding term and revolving loans under GCI, LLC’s senior secured credit facility with a syndicate of banks (the “Senior Credit Facility”).

We also had $1.0 billion remaining available to be drawn until five business days prior to May 12, 2024 at December 31, 2021 under the Margin Loan Agreement.

Further, as a result of multiple transactions, including the Combination, we have entered into an indemnification agreement pursuant to which, among other things, (1) we will indemnify Liberty Interactive LLC (“Liberty LLC”) with respect to any of Liberty LLC's 1.75% Exchangeable Debentures due 2046 (the “Liberty Charter Exchangeable Debentures”) surrendered for exchange to Liberty LLC on or before October 5, 2023 for the amount by which (i) the exchange value exceeds (ii) the sum of the adjusted principal amount of such Liberty Charter Exchangeable Debentures plus the amount of certain tax benefits attributable to such Liberty Charter Exchangeable Debentures so exchanged, and (2) Qurate Retail, Liberty Broadband and GCI Liberty will indemnify each other with respect to certain potential losses in respect of the 2018 split-off of GCI Liberty by Qurate Retail.

(v) $397 million in outstanding term and revolving loans under GCI, LLC’s senior secured credit facility with a syndicate of banks (the “Senior Credit Facility”);

and (vi) $5 million outstanding under a note payable to Wells Fargo originally issued by GCI Holdings.

We also had, at December 31, 2022, $900 million remaining available to be drawn, subject to certain terms and conditions, until five business days prior to May 12, 2024 under the Margin Loan Agreement.

Further, subject to certain terms and conditions, as a result of multiple

transactions, including the Combination, we have entered into an indemnification agreement pursuant to which, among other things, (1) we will indemnify Liberty Interactive LLC (“LI LLC”) with respect to any of LI LLC's 1.75% Exchangeable Debentures due 2046 (the “1.75% Exchangeable Debentures”) surrendered for exchange to LI LLC on or before October 5, 2023 for the amount by which (i) the exchange value exceeds (ii) the sum of the adjusted principal amount of such 1.75% Exchangeable Debentures plus the amount of certain tax benefits attributable to such 1.75% Exchangeable Debentures so exchanged, and (2) Qurate Retail, Liberty Broadband and GCI Liberty will indemnify each other with respect to certain potential losses in respect of the 2018 split-off of GCI Liberty by Qurate Retail.

Our and our subsidiaries’ ability to service the respective financial obligations will depend on our and their ability to access cash, and cash flows from operations may be insufficient to satisfy the respective financial obligations under indebtedness outstanding from time to time.

Accessing cash at operating subsidiaries will depend on those subsidiaries individual operating results and any statutory or regulatory restrictions.

Accessing cash at operating subsidiaries will depend on those subsidiaries’ individual operating results and any statutory, regulatory or contractual restrictions to which they may be or may become subject.

The obligations under the Margin Loan Agreement are secured by a portion of our ownership interest in Charter.

Such equity interests are held through SPV.

The terms of the Margin Loan Agreement limit

our company’s ability to secure additional financing on favorable terms.

The terms of the Margin Loan Agreement limit our company’s ability to secure additional financing on favorable terms.

In addition, covenants included in the Senior Notes and Senior Credit Facility will limit the ability of certain subsidiaries to upstream or downstream cash for this purpose.

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There can be no assurance that sufficient financing will be available, or that we will be able to renew or refinance existing indebtedness, on desirable terms or at all.

In particular, during 2022, uncertainty surrounding global growth rates and the ongoing direct and indirect effects of the COVID-19 pandemic continued to produce volatility in the credit and equity markets.

As of December 31, 2022, the markets remain volatile and the economic outlook remains uncertain.

If financing is not available when needed or is not available on favorable terms, we and our subsidiaries may be unable to take advantage of business or market opportunities as they arise, which could have a material adverse effect on our business and financial condition.

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In addition, it is possible that we may need to incur additional indebtedness in the future.

For example, at December 31, 2021, we had $1.0 billion remaining available to be drawn until five business days prior to May 12, 2024 under the Margin Loan Agreement and we could issue additional exchangeable senior debent ures.

For example, at December 31, 2022, we had $900 million remaining available to be drawn, subject to certain terms and conditions, until five business days prior to May 12, 2024 under the Margin Loan Agreement and we could issue additional exchangeable senior debent ures.

If new debt is added to the current debt levels, the risks described above could intensify.

For additional limitations on our company’s ability to potentially service our direct debt obligations, see “ We are a holding company, and we could be unable to obtain cash in amounts sufficient to service our financial obligations or meet our other commitments ” and “ Other than cash generated from our participation in Charter’s stock repurchase program, we do not have access to the cash that Charter generates from its operating activities ” above.

participation in Charter’s stock repurchase program, we do not have access to the cash that Charter generates from its operating activities ” above.

The agreements that govern our and our subsidiaries’ current and future indebtedness may contain various affirmative and restrictive covenants that will limit our discretion in the operation of our business.

As discussed above, SPV entered into the Margin Loan Agreement pursuant to which SPV had outstanding borrowings of $1.3 billion, with $1.0 billion remaining available to be drawn until five business days prior to May 12, 2024, at December 31, 2021.

As discussed above, SPV entered into the Margin Loan Agreement pursuant to which SPV had outstanding borrowings of $1.4 billion, with $900 million remaining available to be drawn, subject to certain terms and conditions, until five business days prior to May 12, 2024, at December 31, 2022.

The Margin Loan Agreement contains various covenants, including those that limit our ability to, among other things, incur indebtedness either directly, through another of our subsidiaries, or by having SPV enter into financing arrangements with respect to the stock of Charter, and cause SPV to enter into unrelated businesses or otherwise conduct business other than owning common stock of Charter and other assets as permitted under the Margin Loan Agreement documents.

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We may also enter into certain other indebtedness arrangements in the future.

The instruments governing such indebtedness, often contain covenants that, among other things, place certain limitations on a borrowers’ ability to incur more debt, exceed specified leverage ratios, pay dividends, make distributions, make investments, repurchase stock, create liens, enter into transactions with affiliates, merge or consolidate, and transfer or sell assets.

The instruments governing such indebtedness often contain covenants that, among other things, place certain limitations on a borrower’s ability to incur more debt, exceed specified leverage ratios, pay dividends, make distributions, make investments, repurchase stock, create liens, enter into transactions with affiliates, merge or consolidate, and transfer or sell assets.

Any failure to comply with such covenants could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business and financial condition.

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Our and our subsidiaries’ assets or cash flow may not be sufficient to repay borrowings under outstanding debt instruments in the event of a default thereunder.

Variable rate indebtedness subjects the Company to interest rate risk, which could cause its debt service obligations to increase significantly.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under the Margin Loan Agreement and the Senior Credit Facility are at variable rates of interest and expose us to interest rate risk.

If interest rates increase, the Company's debt service obligations on any variable rate indebtedness could increase even though the amount borrowed remained the same, and net income and cash flow could decrease.

In addition, the Company’s variable rate indebtedness uses London Interbank Offering Rate (“LIBOR”) as a benchmark for establishing the rate.

If interest rates increase, our debt service obligations on any variable rate indebtedness could increase even though the amount borrowed remained the same, and net income and cash flow could decrease.

In addition, our variable rate indebtedness uses London Interbank Offering Rate (“LIBOR”) as a benchmark for establishing the rate.

In 2017, the United Kingdom's Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that it intends to phase out LIBOR.

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The United States Federal Reserve has also advised banks to cease entering into new contracts that use USD LIBOR as a reference rate.

The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has identified the Secured Overnight Financing Rate, or SOFR, a new index calculated by short-term repurchase agreements, backed by Treasury securities, as its preferred alternative rate for LIBOR.

At this time, it is not possible to predict how markets will respond to SOFR or other alternative reference rates as the transition away from the LIBOR benchmarks is anticipated in coming years.

Accordingly, the outcome of these reforms is uncertain and any changes in the methods by which LIBOR is determined or regulatory activity related to LIBOR’s phaseout could cause LIBOR to perform differently than in the past or cease to exist.

The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has identified the Secured Overnight Financing Rate (“SOFR”), an index calculated by short-term repurchase agreements, backed by Treasury securities, as its preferred alternative rate for LIBOR.

At this time, it is not possible to predict how markets will respond to SOFR or other alternative reference rates as the transition away from the LIBOR benchmarks is anticipated this year.

Accordingly, the outcome of these reforms is uncertain and any changes in the methods by which LIBOR

is determined or regulatory activity related to LIBOR’s phaseout could cause LIBOR to perform differently than in the past or cease to exist.

The consequences of these developments cannot be entirely predicted, but could include an increase in the cost of borrowings under the aforementioned debt instruments.

Additionally, our Margin Loan Agreement and Senior Credit Facility provide for a transition to a SOFR based rate or to other alternative reference rates depending on acceptance in the market of these rates.

In order to manage the Company's exposure to interest rate risk, in the future, it may enter into derivative financial instruments, typically interest rate swaps and caps, involving the exchange of floating for fixed rate interest payments.

If the Company is unable to enter into interest rate swaps, it may adversely affect its cash flow and may impact its ability to make required principal and interest payments on its indebtedness and, even if we use these instruments to selectively manage risks, there can be no assurance that we will be fully protected against material interest rate fluctuations.

Factors Relating to COVID-19

The ongoing COVID-19 pandemic could materially affect the financial condition and results of operations of Charter and GCI Holdings.

The ongoing COVID-19 pandemic has significantly increased economic and demand uncertainty and caused economic disruption.

At this time, we cannot predict the duration of any business disruption and the ultimate impact of COVID-19 on the businesses of Charter and GCI Holdings.

As a general matter, the COVID-19 pandemic has significantly increased economic and demand uncertainty, and a significant global recession may result.

With respect to Charter, we cannot predict the depth and duration of the economic impact to Charter’s residential and business customers’ ability to pay for its products and services.

In addition, there is uncertainty regarding the impact of government emergency declarations, the ability of Charter’s suppliers and vendors to provide products and services to it, the pace of new housing construction, the pace of households moving residences, changes in business spend in Charter’s local and national ad sales business, the effects to employees’ health and safety, and resulting reorientation of its work activities and the risk of limitations on the deployment and maintenance of Charter’s services (including by limiting customer support and on-site service repairs and installations).

With respect to GCI Holdings, because of the geographic concentration of GCI Holdings’ operations in Alaska, growth of GCI Holdings' business and operations depends upon economic conditions in Alaska, which we expect will continue to be impacted by COVID-19 and the measures taken in Alaska and around the world to address the pandemic.

At the end of 2019, the Alaska economy showed signs of emerging from a recession that started in late 2015.

However, GCI Holdings expects this recession to continue as a result of the COVID-19 pandemic.

GCI Holdings is unable to predict the depth and duration of the economic impact to its customers’ ability to pay for products and services, even after taking into account the impact of extended unemployment benefits and other stimulus packages and governmental assistance provided to its customers.

Historically, recessions have had an adverse impact on its business and could adversely affect the affordability of and demand for some of its products and services and cause customers to shift to lower priced products and services or to delay or forgo purchases of its products and services.

GCI Holdings’ customers may not be able to obtain adequate access to credit, which could affect their ability to make timely payments to GCI Holdings.

There is a risk that GCI Holdings’ accounts receivable and bad debt expense will increase substantially due to the economic impact of the COVID-19 pandemic.

In addition, GCI Holdings is unable to predict the impact to its business from future government emergency declarations, the ability of its suppliers and vendors to provide products and services to GCI Holdings and the risk of limitations on the deployment and maintenance of GCI Holdings’ services, changes in business spend in GCI Holdings’ ad sales business, the effects to employees’ health and safety, and resulting reorientation of its work activities and the risk of limitations on the deployment and maintenance of its services (including by limiting customer support and on-site service repairs and installations).

The Alaska economy is dependent upon the oil industry, state government spending, United States military spending, investment earnings and tourism.

A decline in oil prices could put significant pressure on the Alaska state government budget.

Although Alaska state government has significant reserves that GCI Holdings believes will help fund the state government for the next couple of years, major structural budgetary reforms will be required in order to offset the impact of the COVID-19 pandemic and a decline in oil prices.

Although GCI Holdings cannot predict the long-term impact COVID-19 will have on these sectors of the Alaska economy, adverse circumstances in these industries may have an adverse impact on the demand for its products and services and on its results of operations and financial condition.

Further, the extent of the impact of the COVID-19 pandemic on Charter and GCI Holdings remains fluid and the likelihood of an impact that could be material increases the longer the virus impacts activity levels in the locations in which they operate.

Delays in the widespread distribution of vaccines, or lack of public acceptance, could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time.

In addition, new variants of the virus may continue to emerge.

Even after the COVID-19 pandemic subsides, the U.S.

economy and other major global economies may experience a prolonged recession, and we anticipate Charter and GCI Holdings could be materially adversely affected by a prolonged recession in the U.S.

and other major markets.

To the extent the COVID-19 pandemic adversely affects our or Charter’s or GCI Holdings’ respective businesses, financial conditions and results of operations, it may also have the effect of heightening the other risks described in these Risk Factors, such as those relating to fluctuations in our stock price and the market value of our interests in publicly-traded securities,

the effect of increases in data usage on GCI Holdings’ wired and wireless networks on network capacity limitations, impairments, our significant level of indebtedness and our ability to generate sufficient cash to service our debt obligations.

Our Margin Loan Agreement and Senior Credit Facility provide for a transition to a SOFR based rate or to other alternative reference rates depending on acceptance in the market of these rates.

In order to manage our exposure to interest rate risk, in the future, we may enter into derivative financial instruments, typically interest rate swaps and caps, involving the exchange of floating for fixed rate interest payments.

If we are unable to enter into interest rate swaps, it may adversely affect our cash flow and may impact our ability to make required principal and interest payments on our indebtedness and, even if we use these instruments to selectively manage risks, there can be no assurance that we will be fully protected against material interest rate fluctuations.

Factors Relating to GCI Holdings

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The Company cannot predict which of many possible future technologies, products or services will be important to maintain GCI’s competitive position or what expenditures will be required to develop and provide these technologies, products or services.

GCI’s ability to compete successfully will depend on marketing and on its ability to anticipate and respond to various competitive factors affecting the industry, including new services that may be introduced, changes in consumer preferences, economic conditions and pricing strategies by competitors.

GCI’s ability to compete successfully will depend on marketing and on its ability to anticipate and respond to various competitive factors affecting the industry, including new services that may be introduced, improvements in network quality, changes in consumer preferences or habits, demographic trends, economic conditions and pricing strategies by competitors.

To the extent GCI does not keep pace with technological advances or fails to timely respond to changes in competitive factors in its industry and in its markets, GCI could lose market share or experience a decline in its revenue and net income.

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If GCI is unable to retain and attract subscribers, its and the Company’s financial performance will be impaired.

GCI’s rates of subscriber acquisition and turnover are affected by a number of competitive factors including the size of its service areas, network performance and reliability issues, changing technologies including the transition to internet protocol television, its device and service offerings, subscribers’ perceptions of its services, and customer care quality.

GCI’s rates of subscriber acquisition and turnover are affected by a number of competitive factors, including the size of its service areas, network performance and reliability issues, changing

technologies including the transition to internet protocol television, its device and service offerings, subscribers’ perceptions of its services, and customer care quality.

Managing these factors and subscribers’ expectations is essential in attracting and retaining subscribers.

Although GCI has implemented programs to attract new subscribers and address subscriber turnover, the Company cannot assure you that these programs or GCI’s strategies to address subscriber acquisition and turnover will be successful.

Although GCI has implemented programs to attract new subscribers and address subscriber turnover, the Company cannot make assurances that these programs or GCI’s strategies to address subscriber acquisition and turnover will be successful.

A high rate of turnover or low or negative rate of new subscriber acquisition would reduce revenue and increase the total marketing expenditures required to attract the minimum number of subscribers required to sustain GCI’s business plan which, in turn, could have a material adverse effect on the Company’s business, financial condition and results of operations.

Adverse economic conditions in the U.S.

and inflationary pressures on input costs and labor could impact GCI’s results of operations.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, and created significant volatility and disruption of financial markets.

The Russian invasion of Ukraine in February 2022 has led to further economic disruptions.

Federal Reserve increased interest rates starting in March 2022 and additional increases are expected to continue.

Mounting inflationary cost pressures and recessionary fears have negatively impacted the U.S.

and global economy.

Unfavorable economic conditions, such as a recession or economic slowdown in the U.S., or inflation in the markets in which GCI operates, could negatively affect the affordability of and demand for GCI’s products and services and its cost of doing business.

The Alaska economy is dependent upon the oil industry, state and federal spending, investment earnings and tourism.

A decline in oil prices would put significant pressure on the Alaska state government budget.

The Alaska state government has significant reserves that GCI Holdings believes will help fund the state government for the next couple of years.

The Alaska economy is subject to recessionary pressures as a result of the economic impacts of the COVID-19 pandemic, volatility in oil prices, inflation, and other causes that could result in a decrease in economic activity.

While it is difficult for GCI Holdings to predict the future impact of a recession on its business, these conditions have had an adverse impact on its business and could adversely affect the affordability of and demand for some of its products and services and cause customers to shift to lower priced products and services or to delay or forgo purchases of its products and services.

GCI Holdings’ customers may not be able to obtain adequate access to credit, which could affect their ability to make timely payments to GCI Holdings.

In addition, adverse economic conditions may lead to an increased number of customers that are unable to pay for services.

There is a risk that GCI Holdings’ accounts receivable and bad debt expense will increase substantially in a recessionary environment.

If a recession occurs, it could negatively affect GCI Holdings’ business including its financial position, results of operations, or liquidity, as well as its ability to service debt, pay other obligations and enhance shareholder returns.

In addition, during 2022, GCI began to experience the impact of inflation-sensitive items, including upward pressure on the costs of materials, labor, and other items that are critical to GCI’s business.

GCI continues to monitor these impacts closely and, if costs continue to rise, may be unable to recoup losses or offset diminished margins by passing these costs through to GCI’s customers or implementing offsetting cost reductions.

GCI may be unable to obtain or maintain the roaming services it needs from other carriers to remain competitive.

Some of GCI’s competitors have national networks that enable them to offer nationwide coverage to their subscribers at a lower cost than GCI can offer.

The networks GCI operates do not, by themselves, provide national coverage and GCI must pay fees to other carriers who provide roaming services to it.

The networks GCI operates do not, by themselves, provide national coverage and GCI must pay fees to other carriers that provide roaming services to it.

GCI currently relies on roaming agreements with several carriers for the majority of its roaming services.

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If GCI were to lose the benefit of one or more key roaming or wholesale agreements unexpectedly, it may be unable to obtain similar replacement agreements and as a result may be unable to continue providing nationwide voice and data roaming services for its customers or may be unable to provide such services on a cost-effective basis.

GCI’s inability to obtain new or replacement roaming services on a cost-effective basis may limit its ability to compete effectively for wireless customers, which may increase its turnover and decrease its revenue, which in turn could materially adversely affect the Company’s business, financial condition and results of operations.

GCI’s inability to obtain new or replacement roaming services on a cost-effective basis may limit its ability to compete effectively for wireless customers, which may increase customer turnover and decrease GCI’s revenue, which in turn could materially adversely affect the Company’s business, financial condition and results of operations.

GCI’s business is subject to extensive governmental legislation and regulation.

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There can be no assurance that future regulatory actions taken by Congress, the FCC or other federal, state or local government authorities will not have a similar effect.

With respect to wireless services provided by GCI, the licensing, construction, operation, sale and interconnection arrangements of wireless communications systems are regulated by the FCC, Alaska, and, potentially other state and local regulatory agencies.

With respect to wireless services provided by GCI, the licensing, leasing, construction, operation, sale and interconnection arrangements of wireless communications systems are regulated by the FCC, Alaska, and, potentially other state and local regulatory agencies.

In particular, the FCC grants wireless licenses and imposes significant regulation on licensees of wireless spectrum.

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The FCC’s implementing regulations prohibited broadband providers from blocking or throttling most lawful public Internet traffic, from engaging in paid prioritization of that traffic, and from unreasonably interfering with or disadvantaging end users’ and edge providers’ ability to send traffic to, from, and among each other.

Although a 2018 FCC order returned to a Title I classification of Internet service and eliminated many of the requirements imposed in its initial 2015 order, the FCC may seek to re-impose net neutrality requirements or some variation thereof.

Although a 2018 FCC order returned to a Title I classification of Internet service and eliminated many of the requirements imposed in its initial 2015 order, the FCC may seek to re-impose these “net neutrality” requirements or some variation thereof.

In addition, Congress and state legislatures may undertake similar efforts.

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Business - Regulatory Matters,” GCI has experienced material changes to receivables and contributions from the USF programs in recent years.

For example, in October 2018, the Bureau notified GCI of its decision to reduce rural rates charged to RHC customers for the funding year that ended on June 30, 2018 by approximately 26% resulting in a reduction of total support payments of $28 million, and stated that it would apply the same cost methodology going forward.

In addition, although the FCC has adjusted the RHC Program funding cap and committed to annual adjustments in future years for inflation, there is no guarantee that aggregate funding will be available to pay in full the approved funding for future years.

Furthermore, the FCC has adopted changes to the manner in which support issued under the RHC Program will be calculated and approved, and GCI is currently unable to assess the substance, impact on funding or timing of these changes.

For example, in October 2018, the Bureau notified GCI of its decision to reduce rural rates charged to RHC customers for the funding year that ended on June 30, 2018 by approximately 26%, resulting in a reduction of total support payments of $28 million, and applied the same cost methodology for the funding years ended on June 30, 2019 and June 30, 2020.

In addition, although the FCC has adjusted the RHC Program funding cap and committed to

annual adjustments in future years for inflation, there is no guarantee that aggregate funding will be available to pay in full the approved funding for future years.

Furthermore, the FCC has adopted a series of changes to the manner in which support issued under the RHC Program will be calculated and approved and has continued to seek comment about future changes.

GCI is currently unable to assess the substance, impact on funding or timing of any such changes.

Although, GCI has sought FCC review of certain FCC actions regarding the RHC Program, the outcome is uncertain.

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Accordingly, failure to comply with these rules and regulations could have a material adverse effect on GCI’s business and the Company’s financial position, results of operations or liquidity.

As described in note 14 to the consolidated financial statements, the Company accrued a loss of approximately $12 million resulting from a review of certain active and expired RHC Program contracts where it has identified potential compliance issues.

As described in note 14 to the accompanying consolidated financial statements, the Company accrued a loss of approximately $41 million resulting from a review of certain active and expired RHC Program contracts where it has identified potential compliance issues.

Although the FCC has been made aware of the potential RHC Program compliance issues, there can be no assurance that the FCC will not impose penalties or fines that would be additive to any required disgorgement or denial of funding.

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The USF pays support to ETCs to support the provision of facilities-based wireline and wireless telephone service in high cost areas.

If GCI were to lose its ETC status in any of the study areas where it is currently an authorized ETC whether due to legislative or regulatory reform or its failure to comply with applicable laws and regulations, GCI would be ineligible to receive high cost or low income USF support for providing service in that area, which would have an adverse effect on the Company’s business, financial position, results of operations or liquidity.

If GCI were to lose its ETC status in any of the high cost areas where it is currently an authorized ETC whether due to legislative or regulatory reform or its failure to comply with applicable laws and regulations, GCI would be ineligible to receive high cost or low income USF support for providing service in that area, which would have an adverse effect on the Company’s business, financial position, results of operations or liquidity.

GCI may not meet its performance plan milestones under the Alaska High Cost Order.

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In 2016, the FCC published the Alaska High Cost Order which requires GCI to submit to the FCC a performance plan with five-year and ten-year commitments.

If GCI is unable to meet the final performance plan milestones approved by the

FCC it will be required to repay 1.89 times the average amount of support per location received over the ten-year term for the relevant number of locations that GCI failed to deploy to, plus ten percent of its total Alaska High Cost Order support received over the ten-year term.

The FCC approved revised performance obligations in 2021.

If GCI is unable to meet the final performance plan milestones approved by the FCC it will be required to repay 1.89 times the average amount of support per location received over the ten-year term for the relevant number of locations that GCI failed to deploy to, plus ten percent of its total Alaska High Cost Order support received over the ten-year term.

Inability to meet GCI’s performance plan milestones could have an adverse effect on its business, financial position, results of operations or liquidity.

GCI may lose USF high cost support if another carrier adds 4G LTE service in an area where it currently provides 4G LTE service.

Under the Alaska High Cost Order, the FCC adopted a process for revisiting after five years whether and to what extent there is duplicative support for 4G LTE service in rural Alaska and to take steps to eliminate such duplicative support levels in the second half of the ten-year term.

As a result, if another carrier builds 4G LTE service in an area where GCI is the sole provider and the FCC decides to redistribute the support then GCI’s high cost support may be reduced, which could have an adverse effect on its business, financial position, results of operations or liquidity.

Programming expenses for GCI’s video services are increasing, which could adversely affect the Company’s business.

The Company expects programming expenses for GCI’s video services to continue to increase in the foreseeable future.

The multichannel video provider industry has continued to experience an increase in the cost of programming, especially sports programming and costs to retransmit local broadcast stations.

As GCI’s contracts with content providers expire, there can be no assurance that they will be renewed on acceptable terms or that they will be renewed at all, in which case GCI may be unable to provide such content as part of its video services and the Company’s business could be adversely affected.

If GCI adds programming to its video services or if GCI chooses to distribute existing programming to its customers through additional delivery platforms, GCI may incur increased programming expenses.

If GCI is unable to raise its customers’ rates or offset such programming cost increases through the sale of additional services, the increasing cost of programming could have an adverse impact on the Company’s business, financial condition, or results of operations.

The decline in GCI’s voice services’ results of operations, which include long-distance and local access services, may accelerate.

The Company expects GCI’s voice services’ results of operations, which include long-distance and local access services, will continue to decline.

As competition from wireless carriers, such as GCI, increases the Company expects GCI’s long-distance and local access services’ subscribers and revenue will continue to decline and the rate of decline may accelerate.

Under the Alaska High Cost Order, the FCC stated that it would revisit after five years whether and to what extent there is duplicative support for 4G LTE service in rural Alaska and to take steps to eliminate such duplicative support levels in the second half of the ten-year term.

As a result, if another carrier builds 4G LTE service in an area where GCI is the sole provider and the FCC decides to redistribute the support, GCI’s high cost support may be reduced, which could have an adverse effect on its business, financial position, results of operations or liquidity.

The decline in GCI’s Other revenue, which includes video, long-distance and local access services, may accelerate.

The Company expects GCI’s Other revenue, which includes video, long-distance and local access services, will continue to decline.

GCI has experienced declines in video and voice subscribers, consistent with the industry.

Video revenue has seen

further losses as a result of the transition from traditional linear video delivery to IP delivery and GCI’s decision to discontinue selling bulk video packages for multi-dwelling units.

GCI expects a continued decrease in video revenue and video subscribers.

As competition from wireless carriers, as well as competition from GCI’s own product offerings, increases, the Company expects GCI’s long-distance and local access services’ subscribers and revenue will continue to decline and the rate of decline may accelerate.

In addition, GCI’s success in the local telephone market depends on its continued ability to obtain interconnection, access and related services from local exchange carriers on terms that are reasonable and that are based on the cost of providing these services.

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The emergence of alternative platforms such as mobile or tablet computing devices and the emergence of niche competitors who may be able to optimize products, services or strategies for such platforms will require new investment in technology.

Replacing or upgrading GCI’s infrastructure to keep pace with such technological changes could result in significant capital expenditures.

Further, current and new wireless internet technologies such as 4G and 5G wireless broadband services continue to evolve rapidly to allow for greater speed and reliability, and the Company expects other advances in communications technology to occur in the future.

GCI may not successfully complete the rollout of new technology and related features or services in a timely manner, and they may not be widely accepted by GCI’s customers or may not be profitable, in which case GCI could not recover its investment in the technology.

There can be no assurance that GCI will be able to compete with advancing technology or introduce new technologies

and systems as quickly as it would like or in a cost effective manner.

There can be no assurance that GCI will be able to compete with advancing technology or introduce new technologies and systems as quickly as it would like or in a cost effective manner.

Deployment of technology supporting new service offerings may also adversely affect the performance or reliability of its networks with respect to both the new and existing services.

Any resulting customer dissatisfaction could affect GCI’s ability to retain customers and may have an adverse effect on the Company’s financial position, results of operations, or liquidity.

Any resulting customer dissatisfaction could adversely affect GCI’s ability to retain customers and attract new customers and may have an adverse effect on the Company’s financial position, results of operations, or liquidity.

In addition to introducing new technologies and offerings, GCI must phase out outdated and unprofitable technologies and services.

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GCI’s operations are geographically concentrated in Alaska and are impacted by the economic conditions in Alaska, and GCI may not be able to continue to increase its share of the existing market for its services.

As described above in “ The ongoing COVID-19 pandemic could materially affect the financial condition and results of operations of Charter and GCI Holdings ,” GCI offers products and services to customers primarily throughout Alaska.

GCI offers products and services to customers primarily throughout Alaska.

Because of this geographic concentration, growth of GCI’s business and operations depends upon economic conditions in Alaska, which have been negatively impacted in recent years by a recession and the COVID-19 pandemic.

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GCI’s technical infrastructure (including its communications network infrastructure and ancillary functions supporting its network such as service activation, billing and customer care) is vulnerable to damage or interruption from technology failures, power surges or outages, natural disasters, fires, human error, terrorism, intentional wrongdoing or similar events.

As a communications provider, there is an increased risk that GCI’s technological infrastructure may be targeted in connection with terrorism or cyberattacks, either as a primary target, or as a means of facilitating additional attacks on other targets.

As a communications provider, there is an increased risk that GCI’s technological infrastructure may be targeted in connection with terrorism, either as a primary target, or as a means of facilitating additional attacks on other targets.

In addition, earthquakes, floods, fires and other unforeseen natural disasters or events could materially disrupt GCI’s business operations or its provision of service in one or more markets.

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In addition, the Company’s operations depend upon the transmission of information over the Internet.

Unauthorized parties may attempt to gain access to the Company or its vendors’ computer systems by, among other

things, hacking into its systems or those of third parties, through fraud or other means of deceiving the Company’s employees or its vendors, burglaries, errors by the Company or its vendors’ employees, misappropriation of data by employees, or other irregularities that may result in persons obtaining unauthorized access to its data.

Unauthorized parties may attempt to gain access to the Company or its vendors’ computer systems by, among other things, hacking into its systems or those of third parties, through fraud or other means of deceiving the Company’s employees or its vendors, burglaries, errors by the Company or its vendors’ employees, misappropriation of data by employees, or other irregularities that may result in persons obtaining unauthorized access to its data.

The techniques used to gain such access to the Company’s or its vendors’ technology systems, data or customer information, disable or degrade service, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized until launched against a target.

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application whitelisting, anti-malware, message and spam filtering, encryption, advanced firewalls, threat detection, and URL filtering.

Despite these preventive and detective actions, GCI’s efforts may be insufficient to repel a major cyberattack or network disruption in the future and prevent the risks described above.

Despite these preventive and detective actions, GCI’s efforts may be insufficient to repel a cyberattack or prevent network disruption in the future and prevent the risks described above.

Some of the most significant risks to GCI’s information technology systems, networks, and infrastructure include:

● Cyberattacks that disrupt, damage, and gain unauthorized access to GCI’s network and computer systems including data breaches caused by criminal or terrorist activities;

● Undesired human actions including intentional or accidental errors and break-ins;

● Malware (including viruses, worms, cryptoware, and Trojan horses), software defects, unsolicited mass advertising, denial of service, ransomware, and other malicious or abusive attacks by third parties;

● cyberattacks that disrupt, damage, or allow unauthorized access to GCI’s network and computer systems by criminal or terrorist actors, which may result in data breaches or network disruptions;

● undesired human actions including intentional or accidental errors, misconfigurations and break-ins;

● malware (including viruses, worms, and Trojan horses), software defects, unsolicited mass advertising, denial of service attacks, ransomware, and other malicious or abusive attacks by third parties;

● unauthorized access to GCI’s information technology, billing, customer care, and provisioning systems and networks and those of its vendors and other providers.

If hackers or cyberthieves gain improper access to GCI’s technology systems, networks, or infrastructure, they may be able to access, steal, publish, delete, misappropriate, modify or otherwise disrupt access to confidential customer or employee data.

If hackers or cybercriminals gain access to GCI’s technology systems, networks, or infrastructure, they may be able to access, steal, publish, delete, misappropriate, modify or otherwise disrupt access to confidential customer or employee data.

Moreover, additional harm to customers or employees could be perpetrated by third parties who are given access to the confidential customer data.

A network disruption (including one resulting from a cyberattack) could cause an interruption or degradation of service and diversion of management attention, as well as permit access, theft, publishing, deletion, misappropriation, or modification to or of confidential customer data.

Due to the evolving techniques used in cyberattacks to disrupt or gain unauthorized access to technology networks, GCI may not be able to anticipate or prevent such disruption or unauthorized access.

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Among others, such costs could include increased expenditures on cyber security measures, litigation, regulatory actions, fines, sanctions, lost revenue from business interruption, and damage to the public’s perception regarding GCI’s ability to provide a secure service.

As a result, a cyberattack or network disruption could have a material adverse effect on the Company’s business, financial condition, and operating results.

As a result, a cyberattack or network disruption could have a material adverse effect on GCI’s and the Company’s business, financial condition, and operating results.

GCI also faces similar risks associated with security breaches affecting third parties with which it is affiliated or otherwise conduct business.

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GCI is able to deliver services and serve its customers only to the extent that it can protect its network systems against damage from power or communication failures, computer viruses, natural disasters, unauthorized access and other disruptions.

While GCI endeavors to provide for failures in the network by providing back-up systems and procedures, GCI cannot guarantee that these back-up systems and procedures will operate satisfactorily in an emergency.

While GCI endeavors to account for failures in the network by providing back-up systems and procedures, GCI cannot guarantee that these back-up systems and procedures will operate satisfactorily in an emergency.

Disruption to its billing systems due to a failure of existing hardware and backup protocols could have an adverse effect on the Company’s revenue and cash flow.

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If GCI’s providers of this equipment are unable to timely supply the equipment necessary to meet GCI’s needs or provide them at an acceptable cost, GCI may not be able to satisfy demand for its services and competitors may fulfill this demand.

Due to the unique characteristics of the Alaska communications markets (i.e., remote locations, rural, satellite-served, low density populations, and the Company’s leading edge services and products), in many situations GCI deploys and utilizes specialized, advanced technology and equipment that may not have a large market or demand.

Due to the unique characteristics of the Alaska communications markets (i.e., remote locations, rural, satellite-served, and low density populations), in many situations GCI deploys and utilizes specialized, advanced technology and equipment that may not have a large market or demand.

GCI’s vendors may not succeed in developing sufficient market penetration to sustain continuing production and may fail.

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The failure of GCI’s key suppliers to provide products or product support could have a material adverse effect on the Company’s business, financial position, and results of operations.

Supply chain disruptions could impact GCI’s ability to obtain equipment and other supplies for its business from its key suppliers and vendors on acceptable terms or at all.

To date, GCI’s supply chain disruptions have been limited, but it may experience more severe supply chain disruptions in the future or supplier inability to manufacture or deliver equipment or parts.

Any suspension or delay in GCI suppliers’ and vendors’ ability to provide us adequate equipment or supplies, or in GCI’s ability to procure equipment or supplies from other sources in a timely manner or at all, could impair its ability to meet customer demand and therefore could have a material adverse effect on the Company’s business, financial condition or results of operations.

Climate change and increasingly stringent environmental laws, rules and regulations, and customer expectations, could adversely affect GCI’s business.

There is a heightened public focus on climate change, sustainability, and environmental issues and customer, regulatory and shareholder expectations are evolving rapidly, with a focus on companies’ climate change readiness, response, and mitigation strategies.

This has led to increased government regulation.

The Company expects that the trend of increasing environmental awareness will continue, which will result in higher costs of operations.

GCI is committed to incorporating environmentally sustainable practices into its business.

While undertaken in a manner designed to be as efficient and cost effective as possible, this may result in increases in GCI’s costs of operations relative to its competitors.

The potential impact of climate change on GCI’s operations and customers remains uncertain.

The primary risk that climate change poses to GCI’s business is the potential for increases in severe weather in the areas in which it operates.

In addition, governmental initiatives to address climate change could, if adopted, restrict GCI’s operations, require GCI to make capital expenditures to comply with these initiatives, increase GCI’s costs, and impact GCI’s ability to compete.

GCI’s inability to timely respond to the risks posed by climate change and the costs of compliance with climate change laws and regulations could have a material adverse impact on GCI.

GCI does not have insurance to cover certain risks to which it is subject, which could lead to the occurrence of uninsured liabilities.

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GCI had $1.3 billion of indefinite-lived intangible assets at December 31, 2022, consisting of goodwill of $755 million, cable certificates of $550 million and other intangibles of $37 million.

Goodwill represents the excess of cost over fair value of net assets acquired in connection with business acquisitions and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition.

GCI’s cable certificates represent agreements with government entities to construct and operate a video business.

Goodwill represents the excess of cost over fair value of net assets acquired in connection with business acquisitions and the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition.

GCI’s cable certificates represent agreements or authorizations with government entities that allow access to homes in cable service areas, including the future economic benefits of the right to solicit and service potential customers and the right to deploy and market new services to potential customers.

GCI’s wireless licenses are from the FCC and give it the right to provide wireless service within a certain geographical area.

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If the testing performed indicates that impairment has occurred, GCI is required to record an impairment charge for the difference between the carrying value and the fair value of the goodwill and/or the indefinite-lived intangible assets, as appropriate, in the period in which the determination is made.

The testing of goodwill and indefinite-lived intangible assets for impairment requires

GCI to make significant estimates about its future performance and cash flows, as well as other assumptions.

These estimates can be affected by numerous factors, including changes in economic, industry or market conditions, changes in underlying business operations, future operating performance, changes in competition, or changes in technologies.

The testing of goodwill and indefinite-lived intangible assets for impairment requires GCI to make significant estimates about its future performance and cash flows, as well as other assumptions.

These estimates can

be affected by numerous factors, including changes in economic, industry or market conditions, changes in underlying business operations, future operating performance, changes in competition, or changes in technologies.

Any changes to key assumptions, or actual performance compared with those assumptions, about GCI’s business and its future prospects or other assumptions could affect the fair value, resulting in an impairment charge.

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Increasing consolidation in the telecommunications and content industries have provided additional benefits to certain of Charter’s competitors, either through access to financing, resources, or efficiencies of scale including the ability to launch new video services.

Charter’s Internet service faces competition from the phone companies’ FTTH, FTTN, fixed wireless broadband, Internet delivered via satellite and DSL services.

Charter’s Internet service faces competition from other companies’ FTTH, fixed wireless broadband, Internet delivered via satellite and DSL services.

Various operators offer wireless Internet services delivered over networks which they continue to enhance to deliver faster speeds and also continue to expand 5G mobile services.

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Charter competes for the sale of advertising revenue with television networks and stations, as well as other advertising platforms, such as online media, radio and print.

Competition related to Charter’s service offerings to businesses continues to increase as well, as more companies deploy more fiber to more buildings, which may negatively impact Charter’s growth and/or put pressure on margins.

Charter’s failure to effectively anticipate or adapt to new technologies and changes in customer expectations and behavior could significantly adversely affect its competitive position with respect to the leisure time and discretionary spending of its customers and, as a result, affect its business and results of operations.

A failure to effectively anticipate or adapt to new technologies and changes in customer expectations and behavior could significantly adversely affect its competitive position with respect to the leisure time and discretionary spending of its customers and, as a result, affect its business and results of operations.

Competition may also reduce its expected growth of future cash flows which may contribute to future impairments of Charter’s franchises and goodwill and Charter’s ability to meet cash flow requirements, including debt service requirements.

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thus, if it is unable to procure the necessary services, equipment, software or licenses on reasonable terms and on a timely basis, its ability to offer services could be impaired, and Charter’s growth, operations, business, financial results and financial condition could be materially adversely affected.

Charter depends on a limited number of third party service providers, suppliers and licensors to supply some of the services, hardware, software and operational support necessary to provide some of its services.

Some of Charter’s hardware, software and operational support vendors, and service providers represent its sole source of supply or have, either through contract

or as a result of intellectual property rights, a position of some exclusivity.

Charter’s ability to provide some services might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might interrupt or delay its ability to serve its customers, if any of these parties experience or engage in the following:

Charter depends on a limited number of third-party service providers, suppliers and licensors to supply some of the services, hardware, software and operational support necessary to provide some of its services and execute its network evolution and rural construction initiatives.

Some of Charter’s hardware, software and operational support vendors, and service providers represent its sole source of supply or have, either through contract or as a result of intellectual property rights, a position of some

Charter’s ability to provide some services and complete its network evolution and rural construction initiatives might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might interrupt or delay its ability to serve existing and new customers, if any of these parties experience or engage in the following:

● breach or terminate or elect not to renew their agreements with Charter or otherwise fail to perform their obligations in a timely manner;

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● cease production of any necessary product due to lack of demand, profitability or a change in ownership or are otherwise unable to provide the equipment or services Charter needs in a timely manner at its specifications and at reasonable prices.

Charter’s third-party service providers, suppliers and licensors have been disrupted by worker absenteeism, quarantines, restrictions on employees’ ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, or other travel or health-related restrictions.

Furthermore, an extended duration of the COVID-19 pandemic could result in significant disruptions in Charter’s supply chain.

For example, quarantines, shelter-in-place and similar government orders, travel restrictions and health impacts of the COVID-19 pandemic, could impact the availability or productivity of personnel at third-party supply manufacturers, distributors, freight carriers and other necessary components of Charter’s supply chain.

In addition, the existence of only a limited number of vendors of key technologies can lead to less product innovation and higher costs.

These events could materially and adversely affect Charter’s ability to retain and attract customers and its operations, business, financial results and financial condition.

Programming costs per video customer are rising at a fast rate, and Charter may not have the ability to reduce or moderate the growth rates of, or pass on to its customers, its increasing programming costs, which would adversely affect its cash flow and operating margins.

Video programming has been, and is expected to continue to be, Charter’s largest operating expense item.

Media corporation and broadcast station group consolidation has resulted in fewer suppliers and additional selling power on the part of programming suppliers.

Charter expects programming rates per video 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.

The inability to fully pass programming cost increases on to its customers has had, and is expected in the future to have, an adverse impact on Charter’s cash flow and operating margins associated with the video product.

Programming contracts often restrict the structure of the video packages Charter offers which impacts the affordability and competitive positioning of its video service.

The contracts set to expire in any particular year vary.

There can be no assurance that these agreements will be renewed on favorable or comparable terms.

In addition, a number of programmers have begun to sell their services through alternative distribution channels, including IP-based platforms, which are less secure than Charter’s video distribution platforms.

There is growing evidence that these less secure video distribution platforms are leading to video product theft via password sharing among consumers.

Password sharing may drive down the number of customers who pay for certain programming, putting programmer revenue at risk, and which in turn may cause certain programmers to seek even higher programming fees from Charter.

The ability for consumers to receive the same content for free through such unauthorized channels has devalued Charter’s video product which could impact sales, customer retention and Charter’s ability to pass through programming costs to consumers, which increases the risk of non-renewal when programmers seek increases.

To the extent that Charter is unable to reach agreement with certain programmers on terms that it believes are reasonable, Charter has been, and may be in the future, forced to remove such programming channels from its line-up, which may result in a loss of customers.

Charter’s failure to carry programming that is attractive to its customers could adversely impact Charter’s customer levels, operations and financial results.

Increased demands by owners of some broadcast stations for carriage of other services or payments to those broadcasters for retransmission consent are likely to further increase Charter’s programming costs.

Charter may not have the ability to pass on to its customers all of the increases in programming costs, which could adversely affect its cash flow and operating margins.

Programming costs are Charter’s single largest expense item.

Charter’s programming costs have historically increased in excess of customary inflationary and cost-of-living type increases.

While decreases in video customers combined with a change in the mix of customers choosing lower cost packages have lowered total programming cost increases, Charter expects contractual programming rates per service subscriber to continue to increase as a result of annual increases pursuant to its programming contracts and contract renewals with programmers.

Although Charter passes along amounts paid for local broadcast station retransmission consent to the majority of its customers, the inability to fully pass programming cost increases on to customers has had, and is expected in the future to have, an adverse impact on Charter’s cash flow and operating margins associated with the video product.

Additionally, the demands of large media companies, with additional selling power as a result of media and broadcast station groups consolidation, who link carriage of their most popular networks to carriage and cost increases of their less popular networks, and require Charter to carry their most popular networks to a large percentage of its video subscribers, have limited Charter’s flexibility in selling more tailored and cost-sensitive programming packages for consumers.

In order to mitigate impacts to operating margins due to increasing programming rates, Charter continues to review its pricing and programming packaging strategies.

Increases in the cost of sports programming and the amounts paid for local broadcast station retransmission consent have been the largest contributors to the growth in programming costs over the last few years.

Federal law allows commercial television broadcast stations to make an election between “must-carry” rights and an alternative “retransmission-consent” regime.

When a station opts for the retransmission consent regime, Charter is not allowed to carry the station’s signal without that station’s permission.

In some cases, Charter carries stations under short-term arrangements while it attempts to negotiate new long-term retransmission agreements.

If negotiations with these programmers prove unsuccessful, they could require Charter to cease carrying their signals, possibly for an indefinite period.

Any loss of stations could make Charter’s video service less attractive to customers, which could result in less subscription and advertising revenue.

In retransmission-consent negotiations, broadcasters often condition consent with respect to one station on carriage of one or more other stations or programming services in which they or their affiliates have an interest.

Carriage of these other services, as well as increased fees for retransmission rights, may increase Charter’s programming expenses and diminish the amount of capacity it has available to introduce new services, which could have an adverse effect on its business and financial results.

Charter’s inability to respond to technological developments and meet customer demand for new products and services could adversely affect its ability to compete effectively.

Carriage of these other services, as well as increased fees for retransmission rights, may increase programming expenses and diminish the amount of capacity Charter has available to introduce new services, which could have an adverse effect on Charter’s business and financial results.

Charter’s programming contracts are generally for a fixed period of time, with potentially significant spend subject to negotiated renewal in any particular year.

Charter will seek to renew these agreements on terms that it believes are favorable.

There can be no assurance that these agreements will be renewed on favorable or comparable terms.

To the extent that Charter is

unable to reach agreement with certain programmers on terms that it believes are reasonable, Charter has been, and may in the future be, forced to remove such programming channels from its line-up, which may result in a loss of customers.

Any failure to carry programming that is attractive to Charter’s customers could adversely impact Charter’s customer levels, operations and financial results.

Any failure to respond to technological developments and meet customer demand for new products and services could adversely affect its ability to compete effectively.

Charter operates in a highly competitive, consumer-driven and rapidly changing environment.

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Charter may not be able to accurately predict technological trends or the success of new products and services.

If Charter chooses technologies or equipment that are less effective, cost-efficient or attractive to customers than those chosen by its competitors, if technologies or equipment on which Charter has chosen to rely cease to be available to it on reasonable terms or conditions, if Charter offers services that fail to appeal to consumers, are not available at competitive prices or that do not function as expected, or Charter is not able to fund the expenditures necessary to keep pace with technological developments, or if Charter is no longer able to make its services available to its customers on a third-party device on which a substantial number of customers have relied to access its services, its competitive position could deteriorate, and its business and financial results could suffer.

If Charter chooses technologies or equipment that are less effective, cost-efficient or attractive to customers than those chosen by its competitors, if technologies or equipment on which Charter has chosen to rely cease to be available to it on reasonable terms or conditions, if Charter offers services that fail to appeal to consumers, are not available at competitive prices or that do not function as expected, if Charter is not able to fund the expenditures necessary to keep pace with technological developments, or if Charter is no longer able to make its services available to its customers on a third-party device on which a substantial number of customers have relied to access its services, its competitive position could deteriorate, and its business and financial results could suffer.

The ability of some of Charter’s competitors to introduce new technologies, products and services more quickly than Charter does may adversely affect its competitive position.

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In addition, the uncertainty of Charter’s ability, and the costs, to obtain intellectual property rights from third parties could impact its ability to respond to technological advances in a timely and effective manner.

Charter’s inability to maintain and expand its upgraded systems and provide advanced services in a timely manner, or to anticipate the demands of the marketplace, could materially adversely affect Charter’s ability to attract and retain customers.

In addition, as Charter continues to grow its mobile services using virtual network operator rights from a third party, Charter expects continued growth-related sales and marketing and other customer acquisition costs as well as negative working capital impacts from the timing of device-related cash flows when Charter provides the devices pursuant to equipment installation plans.

Any failure to maintain and expand its upgraded systems and provide advanced services in a timely manner, or to anticipate the demands of the marketplace, could materially adversely affect Charter’s ability to attract and retain customers.

Charter also continues to consider and pursue opportunities in the mobile space which may include the acquisition of additional licensed spectrum and may include entering into or expanding joint ventures or partnerships with wireless or cable providers which may require significant investment.

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Also, because of the rapid pace of technological change, Charter both develops its own technologies, products and services and relies on technologies developed or licensed by third parties.

any of Charter’s intellectual property rights, or the rights of its suppliers, could be challenged or invalidated, or such intellectual property rights may not be sufficient to permit Charter to take advantage of current industry trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm.

However, any of Charter’s intellectual property rights, or the rights of its suppliers, could be challenged or invalidated, or such intellectual property rights may not be sufficient to permit Charter to take advantage of current industry trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm.

Charter may not be able to obtain or continue to obtain licenses from these third parties on reasonable terms, if at all.

In addition, claims of intellectual property infringement could require Charter to enter into royalty or licensing agreements on unfavorable terms, incur substantial monetary liability or be enjoined preliminarily or permanently from further use of the intellectual property in question, which could require Charter to change its business practices or offerings and limit its ability to compete effectively.

Even unsuccessful claims can be time-consuming and costly to defend and may divert management’s attention and resources away from Charter’s business.

Even unsuccessful claims can be time-consuming and costly to defend and may divert

management’s attention and resources away from Charter’s business.

Infringement claims continue to be brought frequently in the communications and entertainment industries, and Charter is also often a party to such litigation alleging that certain of its services or technologies infringe the intellectual property rights of others.

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Network and information systems technologies are critical to Charter’s operating activities, both for its internal uses, such as network management, and supplying services to Charter’s customers, including customer service operations and programming delivery.

Network or information system shutdowns or other service disruptions caused by events such as computer hacking, phishing, dissemination of computer viruses, worms and other destructive or disruptive software, “cyber attacks” such as ransomware, process breakdowns, denial of service attacks and other malicious activity pose increasing risks.

Both unsuccessful and successful “cyber attacks” on companies have continued to increase in frequency, scope and potential harm in recent years.

Network or information system shutdowns or other service disruptions caused by events such as computer hacking, phishing, dissemination of computer viruses, worms and other destructive or disruptive software, “cyberattacks” such as ransomware, process breakdowns, denial of service attacks and other malicious activity pose increasing risks.

Both unsuccessful and successful “cyberattacks” on companies have continued to increase in frequency, scope and potential harm in recent years.

While Charter develops and maintains systems seeking to prevent systems-related events and security breaches from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring and updating as techniques used in such attacks become more sophisticated and change frequently.

Charter, and the third parties on which Charter relies, may be unable to anticipate these techniques or implement adequate preventive measures.

While from time to time attempts have been made to access Charter’s network, these attempts have not as yet resulted in any material release of information, degradation or disruption to its network and information systems.

While from time to time attempts have been made to access Charter’s network, these events have not as yet resulted in any material release of information, degradation or disruption to its network and information systems.

Charter’s network and information systems are also vulnerable to damage or interruption from power outages, telecommunications failures, accidents, natural disasters (including extreme weather arising from short-term or any long-term changes in weather patterns), terrorist attacks and similar events.

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Charter processes, stores and transmits large amounts of data, including the personal information of its customers.

Ongoing increases in the potential for mis-use of personal information, the public’s awareness of the importance of safeguarding personal information, and the volume of legislation that has been adopted or is being considered regarding the protection, privacy and security of personal information have resulted in increases to Charter’s information-related risks.

Ongoing increases in the potential for misuse of personal information, the public’s awareness of the importance of safeguarding personal information, and the volume of legislation that has been adopted or is being considered regarding the protection, privacy, and security of personal information have resulted in increases to Charter’s information-related risks.

Charter could be exposed to significant costs if such risks were to materialize, and such events could damage Charter’s reputation, credibility and business and have a negative impact on its revenue.

Charter could be subject to regulatory actions and claims made by consumers in

private litigations involving privacy issues related to consumer data collection and use practices.

Charter could be subject to regulatory actions and claims made by consumers in private litigations involving privacy issues related to consumer data collection and use practices.

Charter also could be required to expend significant capital and other resources to remedy any such security breach.

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Charter is exposed to risks associated with the economic conditions of its current and potential customers, the potential financial instability of its customers and their financial ability to purchase its products.

If there were a general economic downturn, Charter may experience increased cancellations or non-payment by its customers or unfavorable changes in the mix of products purchased.

If there were a prolonged general economic downturn, Charter may experience increased cancellations or non-payment by its customers or unfavorable changes in the mix

of products purchased.

This may include an increase in the number of homes that replace their video service with Internet-delivered and/or over-air content, as well as an increase in the number of Internet and voice customers substituting mobile data and voice products for wireline services which would negatively impact Charter’s ability to attract customers, increase rates and maintain or increase revenue.

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Weak economic conditions may also have a negative impact on Charter’s advertising revenue.

These events have adversely affected Charter in the past, and may adversely affect its cash flow, results of operations and financial condition if a downturn were to occur.

These events have adversely affected Charter in the past, and may adversely affect its cash flow, results of operations and financial condition if a downturn were to continue.

In addition, Charter is susceptible to risks associated with the potential financial instability of the vendors and third parties on which Charter relies to provide products and services or to which it outsources certain functions.

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The loss of the services of key members of management and the inability or delay in hiring new key employees could adversely affect Charter’s ability to manage its business and its future operational and financial results.

Charter has a significant amount of debt and expects to incur significant additional debt, including secured debt, in the future, which could adversely affect its financial health and its ability to react to changes in its business.

Charter has a significant amount of debt and expects to incur significant additional debt, including secured debt, in the future, which could adversely affect its financial condition and its ability to react to changes in its business.

Charter has a significant amount of debt and expects to (subject to applicable restrictions in its debt instruments) incur additional debt in the future as Charter maintains its stated objective of 4.0 to 4.5 times Adjusted EBITDA leverage (net debt divided by the last twelve months Adjusted EBITDA).

As of December 31, 2022, Charter’s total principal amount of debt was approximately $97.4 billion with a leverage ratio of 4.47 times Adjusted EBITDA.

As of December 31, 2022, $70.7 billion of Charter’s debt was rated investment grade and $26.7 billion was rated high yield debt.

This split rating allows Charter to access both the investment grade debt market and the high yield debt market.

Charter’s significant amount of debt could have consequences, such as:

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To the extent Charter’s current debt amounts increase more than expected, Charter’s business results are lower than expected, or credit rating agencies downgrade its debt limiting its access to investment grade markets, the related risks that Charter now faces will intensify.

In addition, Charter’s variable rate indebtedness may use LIBOR as a benchmark for establishing the rate.

The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, stopped publishing one week and 2 month U.S.

Dollar (“USD”) LIBOR rates after 2021 with remaining USD LIBOR rates ceasing to be published on June 30, 2023 (the “FCA Announcement”).

In the United States, the Alternative Reference Rates Committee has proposed the Secured Overnight Financing Rate (“SOFR”) as an alternative to LIBOR.

It is not presently known whether SOFR or any other alternative reference rates that have been proposed will attain market acceptance as replacements of LIBOR.

In addition, a portion of Charter’s variable rate indebtedness may use LIBOR as a benchmark for establishing the rate.

The FCA, which regulates LIBOR, stopped publishing one week and two month U.S.

dollar LIBOR rates after 2021 with

remaining USD LIBOR rates ceasing to be published after June 30, 2023.

In the United States, the U.S.

Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, has proposed the SOFR, a new index calculated by short-term repurchase agreements backed by Treasury securities, as an alternative to LIBOR.

In addition, the overall financial markets may be disrupted as a result of the phase-out or replacement of LIBOR.

Uncertainty as to the nature of such phase out and selection of an alternative reference rate, together with disruption in the financial markets, could increase in the cost of Charter’s variable rate indebtedness.

Uncertainty as to the nature of such phase out and selection of an alternative reference rate, together with disruption in the financial markets, could increase the cost of Charter’s variable rate indebtedness.

As a result of the pending cessation of LIBOR, Charter amended the Charter Operating credit agreement to replace LIBOR with SOFR as the interest rate benchmark for the revolving credit facility and certain of the term loans thereunder.

SOFR may fluctuate based on general economic conditions, general interest rates, Federal Reserve rates and the supply of and demand for credit in the market.

The agreements and instruments governing Charter’s debt contain restrictions and limitations that could significantly affect its ability to operate its business, as well as significantly affect its liquidity.

Charter’s credit facilities and the indentures governing its debt contain a number of significant covenants that could adversely affect Charter’s ability to operate its business, its liquidity, and its results of operations.

These covenants restrict, among other things, Charter’s and Charter’s subsidiaries’ ability to:

The indentures governing the CCO Holdings, LLC (“CCO Holdings”) notes contain a number of significant covenants that could adversely affect Charter’s ability to operate its business, its liquidity, and its results of operations.

These covenants restrict, among other things, CCO Holdings, CCO Holdings Capital Corp.

and all of their restricted subsidiaries’ ability to:

● incur additional debt;

● repurchase or redeem equity interests and debt;

● issue equity;

● make certain investments or acquisitions;

● pay dividends or make other distributions;

● dispose of assets or merge;

● enter into related party transactions;

● grant liens and pledge assets.

Additionally, the Charter Communications Operating, LLC (“Charter Operating”) credit facilities require Charter Operating to comply with a maximum total leverage covenant and a maximum first lien leverage covenant.

● pay dividends on equity or repurchase equity;

● 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 (with respect to only CCO Holdings).

Additionally, the Charter Operating credit facilities require Charter Operating to comply with a maximum total leverage covenant and a maximum first lien leverage covenant.

The Charter Operating credit facilities, the Charter Operating notes, the TWC, LLC senior notes and debentures, and the TWCE debentures include customary negative covenants, including restrictions on the ability to incur liens securing indebtedness for borrowed money and consolidating, merging or conveying or transferring substantially all of the respective obligor’s assets.

The breach of any covenants or obligations in Charter’s indentures or credit facilities, not otherwise waived or amended, could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing Charter’s long-term indebtedness.

In addition, the secured lenders under Charter’s notes and the Charter Operating credit facilities could foreclose on their collateral, which includes equity interests in substantially all of Charter’s subsidiaries, and exercise other rights of secured creditors.

In addition, the secured lenders under Charter’s secured notes and the Charter Operating credit facilities could foreclose on their collateral, which includes equity interests in substantially all of Charter’s subsidiaries, and exercise other rights of secured creditors.

Charter’s business is subject to extensive governmental legislation and regulation, which could adversely affect its business.

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Cable operators are subject to numerous laws and regulations including those covering the following:

● the provision of high-speed Internet service, including net neutrality and transparency rules;

● the provision of voice communications;

● the provision of high-speed Internet service, including net neutrality and broadband label transparency rules;

● the provision of voice communications, including rules for emergency communications, outage reporting, Customer Proprietary Network Information reporting and efforts to limit unwanted robocalls;

● cable franchise renewals and transfers;

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There are ongoing efforts to amend or expand the federal, state, and local regulation of some of the services offered over Charter’s cable systems, particularly its retail broadband Internet access service.

Potential legislative and regulatory changes could adversely impact its business by increasing costs and competition and limiting Charter’s ability to offer services in a manner that that would maximize its revenue potential.

These changes could include, for example, the reclassification of Internet services as regulated telecommunications services;

These changes could include, for example, the reclassification of Internet services as regulated telecommunications services or other utility-style regulation of Internet services;

restrictions on how Charter manages its Internet access services and networks;

the adoption of new privacy restrictions on its collection, use and disclosure of certain customer information;

new data security and cybersecurity mandates that could result in additional network and information security requirements for Charter’s business;

new data security and cybersecurity mandates that could result in additional network and information security and cyber incident-reporting requirements for Charter’s business;

new restraints on Charter’s discretion over programming decisions;

new restrictions on the rates Charter charges to consumers for one or more of the services it offers;

new restrictions on the rates Charter charges to consumers for one or more of the services or equipment options it offers;

changes to the cable industry’s compulsory copyright license to carry broadcast signals;

new requirements to assure the availability of navigation devices from third-party providers;

new Universal Service Fund obligations on Charter’s provision of Internet service that would add to the cost of that service;

increases in government-administered broadband subsidies to rural areas that could result in subsidized overbuilding of its more rural facilities;

new Universal Service Fund contribution obligations on Charter’s Internet service revenue that would add to the cost of that service;

increases in government-administered broadband subsidies to rural areas that could result in subsidized overbuilding of its facilities;

the exhaustion of funding for the FCC’s ACP or any changes to that program that could make it more difficult for Charter to provide services to low-income consumers;

changes to the FCC’s administration of spectrum;

pending court challenges to the legality of the FCC’s Universal Service programs, which, if successful, could adversely affect Charter’s receipt of universal service funds, including but not limited to FCC RDOF grants to expand its network, FCC E-rate funds to serve schools and libraries and FCC Rural Health Care funds to serve eligible health care providers;

and changes in the regulatory framework for VoIP telephone service, including the scope of regulatory obligations associated with Charter’s VoIP telephone service and its ability to interconnect its VoIP telephone service with incumbent providers of traditional telecommunications service.

As a winning bidder in the FCC’s RDOF auction in 2020, Charter must comply with numerous FCC and state requirements prior to and after receiving such funding.

To comply with these RDOF program requirements, Charter has chosen in the RDOF areas to offer certain of its VoIP telephone services, such as its federal or state Lifeline services, subject to traditional federal and state common carrier regulations.

Additionally, in the RDOF areas, Charter will offer certain of its broadband Internet access services subject to required discounts and other marketing-related terms.

If Charter fails to comply with those requirements, the FCC could consider Charter in default of the RDOF program rules, and Charter could incur substantial penalties or forfeitures.

For example, if Charter fails to attain certain specified infrastructure build-out requirements under the RDOF program, the FCC could withhold future support payments until those shortcomings are corrected.

Charter’s failure to comply with the rules and requirements for the RDOF program could result in being suspended or disbarred from future governmental programs or contracts for a significant period of time, which could adversely affect its results of operations and financial condition.

As a winning bidder in the FCC’s RDOF auction in 2020, Charter must comply with numerous FCC and state requirements to continue receiving such funding.

To comply with these requirements, in RDOF areas, Charter has chosen to offer certain of its VoIP telephone services, such as its Lifeline services, subject to certain traditional federal and state common carrier regulations.

Additionally, in some areas where Charter is building pursuant to subsidy programs, Charter will offer certain of its broadband Internet access services subject to required discounts and other marketing-related terms.

If Charter fails to comply with those requirements, the governing regulatory agency could consider Charter in default and Charter could incur substantial penalties or forfeitures.

If Charter fails to attain certain specified infrastructure build-out requirements under the RDOF program, the FCC could also withhold future support payments until those shortcomings are corrected.

Any failure to comply with the rules and requirements of a subsidy grant could result in being suspended or disbarred from future governmental programs or contracts for a significant period of time, which could adversely affect its results of operations and financial condition.

If any laws or regulations are enacted that would expand the regulation of Charter’s services, they could affect Charter’s operations and require significant expenditures.

Charter cannot predict future developments in these areas, and any changes to the regulatory framework for Charter’s Internet, video, mobile or VoIP services could have a negative impact on its business and results of operations.

It remains uncertain what rule changes, if any, will ultimately be adopted by Congress and the FCC and what operating or financial impact any such rules might have on Charter, including on its programming agreements, customer privacy and the user experience.

In addition, the FCC, the FTC, and various state agencies and attorney general actively investigate industry practices and could impose substantial forfeitures for alleged regulatory violations.

It remains uncertain what rule changes, if any, will ultimately be adopted by Congress, the FCC and state legislatures, and what operating or financial impact any such rules might have on Charter, including on the operation of its broadband networks, customer privacy and the user experience.

In addition, the FCC, the FTC, and various state agencies and attorney generals actively investigate industry practices and could impose substantial forfeitures for alleged regulatory violations.

Tax legislation and administrative initiatives or challenges to Charter’s tax and fee positions could adversely affect its results of operations and financial condition.

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Potential changes include additional taxes or fees on Charter’s services which could impact its customers, changes to income tax sourcing rules and other changes to general business taxes, central/unit-level assessment of property taxes and other matters that could increase Charter’s income, franchise, sales, use and/or property tax liabilities.

For example, some local franchising authorities have imposed franchise fee assessments on Charter’s broadband Internet access service (in addition to Charter’s video service), and more may do so in the future.

If challenges to such assessments are unsuccessful, it could adversely impact Charter’s costs.

Although the FCC issued a decision precluding the imposition of such duplicative fees, that favorable decision is currently subject to judicial review.

In addition, federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations.

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In some instances, local franchises have not been renewed at expiration, and Charter has operated and is operating under either temporary operating agreements or without a franchise while negotiating renewal terms with the local franchising authorities.

There can be no assurance that Charter will be able to comply with all significant provisions of its franchise agreements and certain of its franchisers have from time to time alleged that Charter has not complied with these agreements.

There can be no assurance that Charter will be able to comply with all significant provisions of its franchise agreements and certain of its franchisors have from time to time alleged that Charter has not complied with these agreements.

Additionally, although historically Charter has renewed its franchises without incurring significant costs, there can be no assurance that Charter will be able to renew, or to renew as favorably, its franchises in the future.

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What changed 10-K

Item 1A. Risk Factors