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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 10-Q
______________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From             to             

Commission File Number: 001-33664
chtr-20210331_g1.jpg
Charter Communications, Inc.
(Exact name of registrant as specified in its charter)

Delaware
84-1496755
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
400 Atlantic Street
Stamford
Connecticut
06901
(Address of Principal Executive Offices)
(Zip Code)
(203) 905-7801
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock $.001 Par ValueCHTRNASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x    Accelerated filer o    Non-accelerated filer o    Smaller reporting company      Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes   No x

Number of shares of Class A common stock outstanding as of March 31, 2021: 188,666,160

Number of shares of Class B common stock outstanding as of March 31, 2021: 1




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CHARTER COMMUNICATIONS, INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2021

TABLE OF CONTENTS
Page No.

This quarterly report on Form 10-Q is for the three months ended March 31, 2021. The United States Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with the SEC, which means that we can disclose important information to you by referring you directly to those documents. In this quarterly report, “Charter,” “we,” “us” and “our” refer to Charter Communications, Inc. and its subsidiaries.

i


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, our plans, strategies and prospects, both business and financial including, without limitation, the forward-looking statements set forth in the “Results of Operations” and “Liquidity and Capital Resources” sections under Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this quarterly report. Although we believe that our plans, intentions and expectations as reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under “Risk Factors” under Part I, Item 1A of our most recent Form 10-K filed with the SEC. Many of the forward-looking statements contained in this quarterly report may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” “aim,” “on track,” “target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “initiatives,” “seek,” “would,” “could,” “continue,” “ongoing,” “upside,” “increases,” “focused on” and “potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this quarterly report are set forth in this quarterly report on Form 10-Q, in our annual report on Form 10-K, and in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:

our ability to sustain and grow revenues and cash flow from operations by offering Internet, video, voice, mobile, advertising and other services to residential and commercial customers, to adequately meet the customer experience demands in our service areas and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition, the need for innovation and the related capital expenditures;
the impact of competition from other market participants, including but not limited to incumbent telephone companies, direct broadcast satellite ("DBS") operators, wireless broadband and telephone providers, digital subscriber line (“DSL”) providers, fiber to the home providers and providers of video content over broadband Internet connections;
general business conditions, unemployment levels and the level of activity in the housing sector and economic uncertainty or downturn, including the impacts of the Novel Coronavirus (“COVID-19”) pandemic to our customers, our vendors and local, state and federal governmental responses to the pandemic;
our ability to obtain programming at reasonable prices or to raise prices to offset, in whole or in part, the effects of higher programming costs (including retransmission consents and distribution requirements);
our ability to develop and deploy new products and technologies including mobile products and any other consumer services and service platforms;
any events that disrupt our networks, information systems or properties and impair our operating activities or our reputation;
the effects of governmental regulation on our business including subsidies to consumers, subsidies and incentives for competitors, costs, disruptions and possible limitations on operating flexibility related to, and our ability to comply with, regulatory conditions applicable to us;
the ability to hire and retain key personnel;
the availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets; and
our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default of our other obligations under cross-default provisions.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this quarterly report.

ii


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share data)
March 31,
2021
December 31,
2020
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$772 $1,001 
Accounts receivable, less allowance for doubtful accounts of $173 and $217, respectively
2,395 2,539 
Prepaid expenses and other current assets496 369 
Total current assets3,663 3,909 
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated depreciation of $32,587 and $31,639, respectively
34,184 34,357 
Customer relationships, net5,185 5,615 
Franchises67,322 67,322 
Goodwill29,554 29,554 
Total investment in cable properties, net136,245 136,848 
OTHER NONCURRENT ASSETS3,531 3,449 
Total assets$143,439 $144,206 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities$8,911 $8,867 
Current portion of long-term debt1,005 1,008 
Total current liabilities9,916 9,875 
LONG-TERM DEBT83,882 81,744 
DEFERRED INCOME TAXES18,227 18,108 
OTHER LONG-TERM LIABILITIES4,233 4,198 
SHAREHOLDERS’ EQUITY:
Class A common stock; $0.001 par value; 900 million shares authorized;
194,816,856 and 193,730,992 shares issued, respectively
  
Class B common stock; $0.001 par value; 1,000 shares authorized;
1 share issued and outstanding
  
Preferred stock; $0.001 par value; 250 million shares authorized;
no shares issued and outstanding
  
Additional paid-in capital29,037 29,000 
Retained earnings (4,388)(5,195)
Treasury stock at cost; 6,150,696 and no shares, respectively
(3,652) 
Total Charter shareholders’ equity 20,997 23,805 
Noncontrolling interests6,184 6,476 
Total shareholders’ equity27,181 30,281 
Total liabilities and shareholders’ equity$143,439 $144,206 

The accompanying notes are an integral part of these consolidated financial statements.
1


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
Unaudited
Three Months Ended March 31,
20212020
REVENUES$12,522 $11,738 
COSTS AND EXPENSES:
Operating costs and expenses (exclusive of items shown separately below)
7,711 7,432 
Depreciation and amortization2,441 2,497 
Other operating expenses, net302 7 
10,454 9,936 
Income from operations2,068 1,802 
OTHER INCOME (EXPENSES):
Interest expense, net
(983)(980)
Other income (expenses), net52 (326)
(931)(1,306)
Income before income taxes1,137 496 
Income tax expense
(216)(29)
Consolidated net income921 467 
Less: Net income attributable to noncontrolling interests(114)(71)
Net income attributable to Charter shareholders$807 $396 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
Basic$4.22 $1.91 
Diluted$4.11 $1.86 
Weighted average common shares outstanding, basic
191,404,527 207,831,305 
Weighted average common shares outstanding, diluted
205,872,536 212,810,613 


The accompanying notes are an integral part of these consolidated financial statements.
2


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(dollars in millions)
Unaudited
Class A Common StockClass B Common StockAdditional Paid-in CapitalRetained Earnings Treasury StockTotal Charter Shareholders’ EquityNon-controlling InterestsTotal Shareholders’ Equity
BALANCE, December 31, 2020$ $ $29,000 $(5,195)$ $23,805 $6,476 $30,281 
Consolidated net income   807  807 114 921 
Stock compensation expense  134   134  134 
Exercise of stock options  9   9  9 
Purchases of treasury stock    (3,652)(3,652) (3,652)
Purchase of noncontrolling interest, net of tax  (237)  (237)(192)(429)
Change in noncontrolling interest ownership, net of tax  131   131 (175)(44)
Distributions to noncontrolling interest      (39)(39)
BALANCE, March 31, 2021$ $ $29,037 $(4,388)$(3,652)$20,997 $6,184 $27,181 

Class A Common StockClass B Common StockAdditional Paid-in CapitalRetained Earnings Treasury StockTotal Charter Shareholders’ EquityNon-controlling InterestsTotal Shareholders’ Equity
BALANCE, December 31, 2019$ $ $31,405 $40 $ $31,445 $7,366 $38,811 
Consolidated net income   396  396 71 467 
Stock compensation expense  90   90  90 
Exercise of stock options  93   93  93 
Issuance of equity  23   23  23 
Purchases of treasury stock    (2,352)(2,352) (2,352)
Purchase of noncontrolling interest, net of tax  (149)  (149)(195)(344)
Change in noncontrolling interest ownership, net of tax  82   82 (109)(27)
Distributions to noncontrolling interest      (39)(39)
BALANCE, March 31, 2020$ $ $31,544 $436 $(2,352)$29,628 $7,094 $36,722 

The accompanying notes are an integral part of these consolidated financial statements.
3


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
Unaudited
Three Months Ended March 31,
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income $921 $467 
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization2,441 2,497 
Stock compensation expense134 90 
Noncash interest income, net(7)(12)
Deferred income taxes156 (14)
Other, net(5)315 
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable144 99 
Prepaid expenses and other assets(182)(67)
Accounts payable, accrued liabilities and other149 (155)
Net cash flows from operating activities3,751 3,220 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment(1,821)(1,461)
Change in accrued expenses related to capital expenditures(75)(388)
Real estate investments through variable interest entities(50)(38)
Other, net(10)37 
Net cash flows from investing activities(1,956)(1,850)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt5,289 4,339 
Repayments of long-term debt(3,164)(3,589)
Payments for debt issuance costs(22)(41)
Issuance of equity 23 
Purchase of treasury stock(3,652)(2,352)
Proceeds from exercise of stock options9 93 
Purchase of noncontrolling interest(507)(393)
Distributions to noncontrolling interest(39)(39)
Borrowings for real estate investments through variable interest entities50  
Other, net12 (24)
Net cash flows from financing activities(2,024)(1,983)
NET DECREASE IN CASH AND CASH EQUIVALENTS (229)(613)
CASH AND CASH EQUIVALENTS, beginning of period1,001 3,549 
CASH AND CASH EQUIVALENTS, end of period$772 $2,936 
CASH PAID FOR INTEREST$1,017 $1,050 
CASH PAID FOR TAXES$20 $19 

The accompanying notes are an integral part of these consolidated financial statements.
4


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)


1.    Organization and Basis of Presentation

Organization

Charter Communications, Inc. (together with its controlled subsidiaries, “Charter,” or the “Company”) is a leading broadband connectivity company and cable operator. Over an advanced high-capacity, two-way telecommunications network, the Company offers a full range of state-of-the-art residential and business services including Spectrum Internet, TV, Mobile and Voice. For small and medium-sized companies, Spectrum Business® delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise provides highly customized, fiber-based solutions. Spectrum Reach® delivers tailored advertising and production for the modern media landscape. The Company also distributes award-winning news coverage, sports and high-quality original programming to its customers through Spectrum Networks and Spectrum Originals.

Charter is a holding company whose principal asset is a controlling equity interest in Charter Communications Holdings, LLC (“Charter Holdings”), an indirect owner of Charter Communications Operating, LLC (“Charter Operating”) under which substantially all of the operations reside. All significant intercompany accounts and transactions among consolidated entities have been eliminated.

The Company’s operations are managed and reported to its Chief Executive Officer (“CEO”), the Company’s chief operating decision maker, on a consolidated basis. The CEO assesses performance and allocates resources based on the consolidated results of operations. Under this organizational and reporting structure, the Company has one reportable segment.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures typically included in the Company's Annual Report on Form 10-K have been condensed or omitted for this quarterly report. The accompanying consolidated financial statements are unaudited and are subject to review by regulatory authorities. However, in the opinion of management, such financial statements include all adjustments, which consist of only normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. Interim results are not necessarily indicative of results for a full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Areas involving significant judgments and estimates include capitalization of labor and overhead costs, impairments of franchises and goodwill, pension benefits and income taxes. Actual results could differ from those estimates.

Certain prior period amounts have been reclassified to conform with the 2021 presentation.


5


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

2.    Franchises, Goodwill and Other Intangible Assets

Indefinite-lived and finite-lived intangible assets consist of the following as of March 31, 2021 and December 31, 2020:

March 31, 2021December 31, 2020
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Indefinite-lived intangible assets:
Franchises$67,322 $— $67,322 $67,322 $— $67,322 
Goodwill29,554 — 29,554 29,554 — 29,554 
Wireless spectrum licenses464 — 464 464 — 464 
Trademarks159 — 159 159 — 159 
$97,499 $— $97,499 $97,499 $— $97,499 
Finite-lived intangible assets:
Customer relationships$18,230 $(13,045)$5,185 $18,230 $(12,615)$5,615 
Other intangible assets420 (169)251 420 (159)261 
$18,650 $(13,214)$5,436 $18,650 $(12,774)$5,876 

Amortization expense related to customer relationships and other intangible assets for the three months ended March 31, 2021 and 2020 was $440 million and $508 million, respectively.
The Company expects amortization expense on its finite-lived intangible assets will be as follows:

Nine months ended December 31, 2021$1,162 
20221,332 
20231,075 
2024824 
2025575 
Thereafter468 
$5,436 

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

3.    Investments

Real Estate Investments through Variable Interest Entities

In July 2018, the Company entered into a build-to-suit lease arrangement with a single-asset special purpose entity ("SPE Building 1") to build the first building in the building complex for the new Charter headquarters in Stamford, Connecticut. The SPE Building 1 obtained a first-lien mortgage note to finance the construction with fixed monthly payments through July 15, 2035 with a 5.612% coupon interest rate. All payments of the mortgage note are guaranteed by Charter. The initial term of the lease is 15 years commencing August 1, 2020, with no termination options. At the end of the lease term there is a mirrored put option for the SPE to sell the property to Charter and call option for Charter to purchase the property for a fixed purchase price.

In April 2020, the Company entered into a build-to-suit lease agreement with a second special purpose entity (“SPE Building 2”) to build the adjoining building and atrium, in the building complex for the new Charter headquarters. As of March 31, 2021, Charter does not guarantee the financing for SPE Building 2. The initial term of the lease is 15 years commencing February 26, 2022, with no termination options. At the end of the lease term there is a put option for the SPE Building 2 to sell the property to Charter for a fixed price. If SPE Building 2 does not exercise the put option and the Company exercises its first renewal term there is call option for Charter to purchase property for a fixed purchase price in year 3 of the first renewal term.

6


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

As the Company has determined that SPE Building 1 and SPE Building 2 (collectively, the "SPEs") are variable interest entities ("VIEs") of which the Company became the primary beneficiary upon the effectiveness of the arrangements in July 2018 and April 2020, respectively, the Company has consolidated the assets and liabilities of the SPEs in its consolidated balance sheets as of March 31, 2021 and December 31, 2020 as follows.

March 31, 2021December 31, 2020
Assets
Current assets$7 $3 
Property, plant and equipment$547 $490 
Liabilities
Current liabilities$41 $28 
Other long-term liabilities$522 $470 

Property, plant and equipment includes land, a parking garage and building construction costs, including the capitalization of qualifying interest. Other long-term liabilities includes mortgage note liabilities and liability-classified noncontrolling interests for the SPEs recorded at amortized cost with accretion towards settlement of the put/call option in the leases. As of March 31, 2021 and December 31, 2020, other long-term liabilities include $465 million and $400 million in SPE mortgage note liability, respectively.     

4.    Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following as of March 31, 2021 and December 31, 2020:

March 31, 2021December 31, 2020
Accounts payable – trade$724 $763 
Deferred revenue493 436 
Accrued liabilities:
Programming costs2,074 1,940 
Labor1,070 1,374 
Capital expenditures1,121 1,227 
Interest1,057 1,083 
Taxes and regulatory fees553 555 
Property and casualty470 462 
Operating lease liabilities245 235 
Other1,104 792 
$8,911 $8,867 

5.    Leases

Operating lease expenses were $115 million and $108 million for the three months ended March 31, 2021 and 2020, respectively, inclusive of $35 million for each of the three months ended March 31, 2021 and 2020 of both short-term lease costs and variable lease costs that were not included in the measurement of operating lease liabilities.

Cash paid for amounts included in the measurement of operating lease liabilities, recorded as operating cash flows in the statements of cash flows, were $81 million and $73 million for the three months ended March 31, 2021 and 2020, respectively. Operating lease right-of-use assets obtained in exchange for operating lease obligations were $96 million and $65 million for the three months ended March 31, 2021 and 2020, respectively.


7


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

Supplemental balance sheet information related to leases is as follows.

March 31, 2021December 31, 2020
Operating lease right-of-use assets:
Included within other noncurrent assets$1,242 $1,214 
Operating lease liabilities:
Current portion included within accounts payable and accrued liabilities$245 $235 
Long-term portion included within other long-term liabilities1,128 1,110 
$1,373 $1,345 
Weighted average remaining lease term for operating leases6.2 years6.4 years
Weighted average discount rate for operating leases3.7 %3.9 %

Maturities of lease liabilities as of March 31, 2021 are as follows.

Operating leases
Nine months ended December 31, 2021$237 
2022297 
2023273 
2024230 
2025182 
Thereafter386 
Undiscounted lease cash flow commitments
1,605 
Reconciling impact from discounting(232)
Lease liabilities on consolidated balance sheet as of March 31, 2021
$1,373 

The Company has $64 million and $63 million of finance lease liabilities recognized in the consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively, included within accounts payable and accrued liabilities and other long-term liabilities. The related finance lease right-of-use assets are recorded in property, plant and equipment, net. The Company’s finance leases were not considered material for further supplemental lease disclosures.

6.    Long-Term Debt
Long-term debt consists of the following as of March 31, 2021 and December 31, 2020:

March 31, 2021December 31, 2020
Principal AmountAccreted ValuePrincipal AmountAccreted Value
CCO Holdings, LLC:
4.000% senior notes due March 1, 2023
$500 $498 $500 $498 
5.750% senior notes due February 15, 2026
1,750 1,733 2,500 2,475 
5.500% senior notes due May 1, 2026
1,500 1,493 1,500 1,492 
5.875% senior notes due May 1, 2027
800 796 800 796 
5.125% senior notes due May 1, 2027
3,250 3,226 3,250 3,225 
5.000% senior notes due February 1, 2028
2,500 2,473 2,500 2,472 
5.375% senior notes due June 1, 2029
1,500 1,501 1,500 1,501 
4.750% senior notes due March 1, 2030
3,050 3,042 3,050 3,042 

8


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

4.500% senior notes due August 15, 2030
2,750 2,750 2,750 2,750 
4.250% senior notes due February 1, 2031
3,000 3,001 3,000 3,001 
4.500% senior notes due May 1, 2032
2,900 2,928 2,900 2,928 
Charter Communications Operating, LLC:
4.464% senior notes due July 23, 2022
3,000 2,993 3,000 2,992 
Senior floating rate notes due February 1, 2024900 902 900 902 
4.500% senior notes due February 1, 2024
1,100 1,095 1,100 1,094 
4.908% senior notes due July 23, 2025
4,500 4,477 4,500 4,475 
3.750% senior notes due February 15, 2028
1,000 989 1,000 989 
4.200% senior notes due March 15, 2028
1,250 1,242 1,250 1,241 
5.050% senior notes due March 30, 2029
1,250 1,242 1,250 1,242 
2.800% senior notes due April 1, 2031
1,600 1,583 1,600 1,583 
2.300% senior notes due February 1, 2032
1,000 991 1,000 991 
6.384% senior notes due October 23, 2035
2,000 1,983 2,000 1,983 
5.375% senior notes due April 1, 2038
800 786 800 786 
3.500% senior notes due June 1, 2041
1,500 1,482   
6.484% senior notes due October 23, 2045
3,500 3,468 3,500 3,468 
5.375% senior notes due May 1, 2047
2,500 2,506 2,500 2,506 
5.750% senior notes due April 1, 2048
2,450 2,392 2,450 2,392 
5.125% senior notes due July 1, 2049
1,250 1,240 1,250 1,240 
4.800% senior notes due March 1, 2050
2,800 2,797 2,800 2,797 
3.700% senior notes due April 1, 2051
2,050 2,031 2,050 2,030 
3.900% senior notes due June 1, 2052
1,000 992   
6.834% senior notes due October 23, 2055
500 495 500 495 
3.850% senior notes due April 1, 2061
1,850 1,809 1,350 1,339 
Credit facilities10,081 10,015 10,150 10,081 
Time Warner Cable, LLC:
4.000% senior notes due September 1, 2021
1,000 1,005 1,000 1,008 
5.750% sterling senior notes due June 2, 2031 (a)
862 917 854 911 
6.550% senior debentures due May 1, 2037
1,500 1,667 1,500 1,668 
7.300% senior debentures due July 1, 2038
1,500 1,761 1,500 1,763 
6.750% senior debentures due June 15, 2039
1,500 1,705 1,500 1,706 
5.875% senior debentures due November 15, 2040
1,200 1,253 1,200 1,254 
5.500% senior debentures due September 1, 2041
1,250 1,258 1,250 1,258 
5.250% sterling senior notes due July 15, 2042 (b)
896 866 889 859 
4.500% senior debentures due September 15, 2042
1,250 1,146 1,250 1,145 
Time Warner Cable Enterprises LLC:
8.375% senior debentures due March 15, 2023
1,000 1,092 1,000 1,104 
8.375% senior debentures due July 15, 2033
1,000 1,266 1,000 1,270 
Total debt84,339 84,887 82,143 82,752 
Less current portion:
4.000% senior notes due September 1, 2021(1,000)(1,005)(1,000)(1,008)
Long-term debt$83,339 $83,882 $81,143 $81,744 

(a)Principal amount includes £625 million remeasured at $862 million and $854 million as of March 31, 2021 and December 31, 2020, respectively, using the exchange rate at the respective dates.

9


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

(b)Principal amount includes £650 million remeasured at $896 million and $889 million as of March 31, 2021 and December 31, 2020, respectively, using the exchange rate at the respective dates.

The accreted values presented in the table above represent the principal amount of the debt adjusted for original issue discount or premium at the time of sale, deferred financing costs, and, in regards to debt assumed in acquisitions, fair value premium adjustments as a result of applying acquisition accounting plus the accretion of those amounts to the balance sheet date. However, the amount that is currently payable if the debt becomes immediately due is equal to the principal amount of the debt. In regards to the fixed-rate British pound sterling denominated notes (the “Sterling Notes”), the principal amount of the debt and any premium or discount is remeasured into US dollars as of each balance sheet date. See Note 9. The Company has availability under the Charter Operating credit facilities of approximately $4.7 billion as of March 31, 2021.

In March 2021, Charter Operating and Charter Communications Operating Capital Corp. jointly issued $1.5 billion aggregate principal amount of 3.500% senior secured notes due June 2041 at a price of 99.544% of the aggregate principal amount, $1.0 billion aggregate principal amount of 3.900% senior secured notes due June 2052 at a price of 99.951% of the aggregate principal amount and an additional $500 million aggregate principal amount of 3.850% senior secured notes due April 2061 at a price of 94.668% of the aggregate principal amount. The net proceeds were used to pay related fees and expenses and for general corporate purposes, including funding buybacks of Charter Class A common stock and Charter Holdings common units as well as repaying certain indebtedness, including $750 million of CCO Holdings, LLC ("CCO Holdings") 5.750% notes due February 2026. The Company recorded a loss on extinguishment of debt of $29 million during the three months ended March 31, 2021 related to these transactions which is recorded in in other income (expenses), net in the consolidated statements of operations.

The Charter Operating notes are guaranteed by CCO Holdings and substantially all of the subsidiaries of Charter Operating. In addition, the Charter Operating notes are secured by a perfected first priority security interest in substantially all of the assets of Charter Operating and substantially all of its subsidiaries to the extent such liens can be perfected under the Uniform Commercial Code by the filing of a financing statement and the liens rank equally with the liens on the collateral securing obligations under the Charter Operating credit facilities. Charter Operating may redeem some or all of the Charter Operating notes at any time at a premium.

The Charter Operating notes are subject to the terms and conditions of the indenture governing the Charter Operating notes. The Charter Operating notes contain customary representations and warranties and affirmative covenants with limited negative covenants. The Charter Operating indenture also contains customary events of default.

In April 2021, CCO Holdings and CCO Holdings Capital Corp. jointly issued $1.0 billion of 4.500% senior unsecured notes due 2033 at par. The net proceeds will be used for general corporate purposes, including to fund potential buybacks of Charter Class A common stock and Charter Holdings common units, to repay certain indebtedness and to pay related fees and expenses.

The CCO Holdings notes are senior debt obligations of CCO Holdings and CCO Holdings Capital Corp. and rank equally with all other current and future unsecured, unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp. They are structurally subordinated to all obligations of subsidiaries of CCO Holdings.

CCO Holdings may redeem some or all of the notes at any time at a premium. Beginning in 2030, the optional redemption price declines to 100% of the principal amount, plus accrued and unpaid interest, if any.

In addition, at any time prior to 2024, CCO Holdings may redeem up to 40% of the aggregate principal amount of the notes at a premium plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more equity offerings (as defined in the indenture); provided that certain conditions are met. In the event of specified change of control events, CCO Holdings must offer to purchase the outstanding notes from the holders at a purchase price equal to 101% of the total principal amount of the notes, plus any accrued and unpaid interest.


10


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

7.    Common Stock

The following represents the Company's purchase of Charter Class A common stock and the effect on the consolidated statements of cash flows during the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,
20212020
Shares$Shares$
Share buybacks 5,556,318 $3,474 4,452,549 $2,176 
Income tax withholding284,563 178 335,654 176 
Exercise cost309,815 241,752 
6,150,696 $3,652 5,029,955 $2,352 

Share buybacks includes 0.8 million shares of Charter Class A common stock purchased from Liberty Broadband Corporation (“Liberty Broadband”) during the three months ended March 31, 2021 at an average price of $621.16 for approximately $518 million pursuant to the LBB Letter Agreement. In April 2021, the Company purchased from Liberty Broadband an additional 0.7 million shares of Charter Class A common stock for approximately $460 million (see Note 19).

As of March 31, 2021, Charter had remaining board authority to purchase an additional $1.2 billion of Charter’s Class A common stock and/or Charter Holdings common units. The Company also withholds shares of its Class A common stock in payment of income tax withholding owed by employees upon vesting of equity awards as well as exercise costs owed by employees upon exercise of stock options.

In 2020, Charter’s board of directors approved the retirement of the then currently held treasury stock and those shares were retired as of December 31, 2020. The Company accounts for treasury stock using the cost method and includes treasury stock as a component of total shareholders’ equity.

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

8.    Noncontrolling Interests

Noncontrolling interests represents consolidated subsidiaries of which the Company owns less than 100%. The Company is a holding company whose principal asset is a controlling equity interest in Charter Holdings, the indirect owner of the Company’s cable systems. Noncontrolling interests on the Company’s balance sheet consist primarily of A/N's equity interests in Charter Holdings, which is comprised of a common ownership interest and a convertible preferred ownership interest.

Net income of Charter Holdings attributable to A/N’s common noncontrolling interest for financial reporting purposes is based on the weighted average effective common ownership interest of approximately 7% during 2021 and 8% during 2020, and was $76 million and $33 million for the three months ended March 31, 2021 and 2020, respectively. Net income of Charter Holdings attributable to A/N's preferred noncontrolling interest for financial reporting purposes is based on the preferred dividend which was $38 million for each of the three months ended March 31, 2021 and 2020.


11


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

The following table represents Charter Holdings' purchase of Charter Holdings common units from A/N pursuant to the A/N Letter Agreement (see Note 19) and the effect on total shareholders' equity during the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,
20212020
Number of units purchased792,654 795,607 
Average price per unit$639.27 $494.54 
Amount of units purchased$507 $393 
Decrease in noncontrolling interest based on carrying value$(192)$(195)
Decrease in additional paid-in-capital, net of tax$(237)