10-Q

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, 2023

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:	001-37789
	333-112593-01

CCO Holdings, LLC

CCO Holdings Capital Corp.

(Exact name of registrant as specified in its charter)

Delaware			86-1067239
Delaware			20-0257904
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
400 Washington Blvd.	Stamford	Connecticut	06902
(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: None

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 registrant has 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 registrant was 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 o    Accelerated filer o    Non-accelerated filer x    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

All of the issued and outstanding shares of capital stock of CCO Holdings Capital Corp. are held by CCO Holdings, LLC. All of the limited liability company membership interests of CCO Holdings, LLC are held by CCH I Holdings, LLC (a subsidiary of Charter Communications, Inc., a reporting company under the Exchange Act). There is no public trading market for any of the aforementioned limited liability company membership interests or shares of capital stock.

CCO Holdings, LLC and CCO Holdings Capital Corp. meet the conditions set forth in General Instruction I(1)(a) and (b) to Form 10-K and are therefore filing with the reduced disclosure format.

Number of shares of common stock of CCO Holdings Capital Corporation outstanding as of March 31, 2023: 1

CCO HOLDINGS, LLC

CCO HOLDINGS CAPITAL CORP.

QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS

		Page No.
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements ‑ CCO Holdings, LLC and Subsidiaries
	Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	1
	Consolidated Statements of Operations
	for the three months ended March 31, 2023 and 2022	2
	Consolidated Statements of Changes in Member's Equity
	for the three months ended March 31, 2023 and 2022	3
	Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	4
	Notes to Consolidated Financial Statements	5
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3	Quantitative and Qualitative Disclosure About Market Risk	22
Item 4	Controls and Procedures	23
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	24
Item 1A	Risk Factors	24
Item 6	Exhibits	24
Signatures		S-1
Exhibit Index		E-1

This quarterly report on Form 10-Q is for the three months ended March 31, 2023. 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, “CCO Holdings,” “we,” “us” and “our” refer to CCO Holdings, LLC 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, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial including, without limitation, the forward-looking statements set forth in 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” in 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,” “grow,” “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;

•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 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;

•our ability to procure necessary services and equipment from our vendors in a timely manner and at reasonable costs including in connection with our network evolution and rural construction initiatives;

•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.

CCO HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in millions)

	March 31, 2023		December 31, 2022
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	292	$	392
Accounts receivable, less allowance for doubtful accounts of $211 and $219, respectively	2,707		2,869
Receivables from related party	7		—
Prepaid expenses and other current assets	629		402
Total current assets	3,635		3,663
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated depreciation of $36,506 and $36,035, respectively	35,717		35,147
Customer relationships, net of accumulated amortization of $15,777 and $15,478, respectively	2,479		2,772
Franchises	67,366		67,363
Goodwill	29,563		29,563
Total investment in cable properties, net	135,125		134,845
OTHER NONCURRENT ASSETS	4,291		4,259
Total assets	$	143,051	$	142,767
LIABILITIES AND MEMBER’S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	9,056	$	9,735
Payables to related party	—		11
Current portion of long-term debt	1,999		1,510
Total current liabilities	11,055		11,256
LONG-TERM DEBT	95,973		96,093
DEFERRED INCOME TAXES	54		54
OTHER LONG-TERM LIABILITIES	3,434		3,471
MEMBER’S EQUITY:
CCO Holdings member's equity	32,512		31,868
Noncontrolling interests	23		25
Total member’s equity	32,535		31,893
Total liabilities and member’s equity	$	143,051	$	142,767

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

1

CCO HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions)

Unaudited

	Three Months Ended March 31,
	2023		2022
REVENUES	$	13,653	$	13,198
COSTS AND EXPENSES:
Operating costs and expenses (exclusive of items shown separately below)	8,539		8,158
Depreciation and amortization	2,199		2,286
Other operating expenses, net	11		3
	10,749		10,447
Income from operations	2,904		2,751
OTHER INCOME (EXPENSES):
Interest expense, net	(1,256)		(1,053)
Other income (expenses), net	(104)		24
	(1,360)		(1,029)
Income before income taxes	1,544		1,722
Income tax expense	(14)		(13)
Consolidated net income	$	1,530	$	1,709

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

2

CCO HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER’S EQUITY

(dollars in millions)

Unaudited

	CCO Holdings Member’s Equity		Noncontrolling Interests		Total Member’s Equity
BALANCE, December 31, 2022	$	31,868	$	25	$	31,893
Consolidated net income	1,530		—		1,530
Stock compensation expense	208		—		208
Distributions to parent	(1,094)		—		(1,094)
Distributions to noncontrolling interest	—		(2)		(2)
BALANCE, March 31, 2023	$	32,512	$	23	$	32,535

	CCO Holdings Member’s Equity		Noncontrolling Interests		Total Member’s Equity
BALANCE, December 31, 2021	$	36,203	$	24	$	36,227
Consolidated net income	1,709		—		1,709
Stock compensation expense	147		—		147
Contributions from parent	81		—		81
Distributions to parent	(3,775)		—		(3,775)
Distributions to noncontrolling interest	—		(1)		(1)
BALANCE, March 31, 2022	$	34,365	$	23	$	34,388

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

3

CCO HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)

Unaudited

	Three Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	1,530	$	1,709
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization	2,199		2,286
Stock compensation expense	208		147
Noncash interest income, net	(8)		(7)
Other, net	104		(24)
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable	162		56
Prepaid expenses and other assets	(332)		(169)
Accounts payable, accrued liabilities and other	(457)		(342)
Receivables from and payables to related party	(16)		(12)
Net cash flows from operating activities	3,390		3,644
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(2,464)		(1,857)
Change in accrued expenses related to capital expenditures	(195)		10
Other, net	(77)		(4)
Net cash flows from investing activities	(2,736)		(1,851)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt	7,104		6,713
Repayments of long-term debt	(6,740)		(2,954)
Payments for debt issuance costs	(18)		(37)
Repayments of loans payable - related parties, net	(3)		—
Distributions to parent	(1,094)		(3,775)
Contributions from parent	—		81
Distributions to noncontrolling interest	(2)		(1)
Other, net	(1)		1
Net cash flows from financing activities	(754)		28
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(100)		1,821
CASH AND CASH EQUIVALENTS, beginning of period	392		321
CASH AND CASH EQUIVALENTS, end of period	$	292	$	2,142
CASH PAID FOR INTEREST	$	1,182	$	975
CASH PAID FOR TAXES	$	2	$	2

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

4

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(dollars in millions, except where indicated)

1.    Organization and Basis of Presentation

Organization

CCO Holdings, LLC (together with its subsidiaries, “CCO Holdings,” or the “Company”) is a leading broadband connectivity company and cable operator. Over an advanced communications 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 and sports programming to its customers through Spectrum Networks.

CCO Holdings is a holding company whose principal assets are the equity interests in its operating subsidiaries. CCO Holdings is a direct subsidiary of CCH I Holdings, LLC, which is an indirect subsidiary of Charter Communications, Inc. (“Charter”), Charter Communications Holdings, LLC (“Charter Holdings”) and Spectrum Management Holding Company, LLC (“Spectrum Management”). All of the outstanding capital stock of CCO Holdings Capital Corp. is owned by CCO Holdings. The consolidated financial statements include the accounts of CCO Holdings and all of its subsidiaries where the underlying operations reside. All significant intercompany accounts and transactions among consolidated entities have been eliminated. Charter, Charter Holdings and Spectrum Management have performed financing, cash management, treasury and other services for CCO Holdings on a centralized basis. Changes in member’s equity in the consolidated balance sheets related to these activities have been considered cash receipts (contributions) and payments (distributions) for purposes of the consolidated statements of cash flows and are reflected in financing activities.

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 and pension benefits. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform with the 2023 presentation.

Comprehensive income equaled consolidated net income for the three months ended March 31, 2023 and 2022.

5

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(dollars in millions, except where indicated)

2.    Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following as of March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022
Accounts payable – trade	$	726	$	914
Deferred revenue	523		511
Accrued liabilities:
Programming costs	1,882		1,914
Labor	947		1,306
Capital expenditures	1,592		1,792
Interest	1,248		1,165
Taxes and regulatory fees	507		512
Operating lease liabilities	257		261
Other	1,374		1,360
	$	9,056	$	9,735

3.    Long-Term Debt

A summary of our debt as of March 31, 2023 and December 31, 2022 is as follows:

	March 31, 2023						December 31, 2022
	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Senior unsecured notes	$	27,250	$	27,159	$	23,638	$	26,650	$	26,567	$	22,426
Senior secured notes and debentures(a)	55,873		56,230		47,636		56,841		57,213		46,905
Credit facilities(b)	14,640		14,583		14,267		13,877		13,823		13,467
	$	97,763	$	97,972	$	85,541	$	97,368	$	97,603	$	82,798

(a)Includes the Company's £625 million fixed-rate British pound sterling denominated notes (the “Sterling Notes”) (remeasured at $771 million and $755 million as of March 31, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates) and the Company's £650 million aggregate principal amount of Sterling Notes (remeasured at $802 million and $786 million as of March 31, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates).

(b)The Company has availability under the Charter Communications Operating, LLC ("Charter Operating") credit facilities of approximately $3.3 billion as of March 31, 2023.

The estimated fair value of the Company’s senior unsecured and secured notes and debentures as of March 31, 2023 and December 31, 2022 is based on quoted market prices in active markets and is classified within Level 1 of the valuation hierarchy, while the estimated fair value of the Company’s credit facilities is based on quoted market prices in inactive markets and is classified within Level 2.

In February 2023, CCO Holdings and CCO Holdings Capital Corp. jointly issued $1.1 billion of 7.375% senior unsecured notes due March 2031 at par. The net proceeds were used for general corporate purposes, including repaying certain indebtedness, distributions to the Company's parent companies to fund buybacks of Charter Class A common stock and Charter Holdings common units and to pay related fees and expenses.

In February 2023, Charter Operating entered into an amendment to its credit agreement to replace London Interbank Offering Rate ("LIBOR") as the benchmark rate applicable to the Term B loans with Secured Overnight Financing Rate ("SOFR") and in March 2023, Charter Operating entered into another amendment to its credit agreement to incur a new Term B-3 loan with an aggregate principal amount of $750 million maturing in 2030 concurrently with the cancelation of certain of Charter

6

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(dollars in millions, except where indicated)

Operating's existing Term B-1 and B-2 loans, among other amendments. Pricing on the new Term B-3 loan is SOFR plus 2.25%. After giving effect to the amendments, the aggregate principal amount of Term B-1 loans is $2.3 billion with pricing unchanged at SOFR plus 1.75% and the aggregate principal amount of Term B-2 loans is $3.1 billion with pricing unchanged at SOFR plus 1.75%.

4.     Accounting for Derivative Instruments and Hedging Activities

Cross-currency derivative instruments are used to manage foreign exchange risk on the Sterling Notes by effectively converting £1.275 billion aggregate principal amount of fixed-rate British pound sterling denominated debt, including annual interest payments and the payment of principal at maturity, to fixed-rate U.S. dollar denominated debt. The fair value of the Company's cross-currency derivatives, which are classified within Level 2 of the valuation hierarchy, was $565 million and $570 million and is included in other long-term liabilities on its consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

The effect of financial instruments are recorded in other income (expenses), net in the consolidated statements of operations and consisted of the following.

	Three Months Ended March 31,
	2023		2022
Change in fair value of cross-currency derivative instruments	$	5	$	(36)
Foreign currency remeasurement of Sterling Notes to U.S. dollars	(32)		50
Gain (loss) on financial instruments, net	$	(27)	$	14

5.    Revenues

The Company’s revenues by product line are as follows:

	Three Months Ended March 31,
	2023		2022
Internet	$	5,718	$	5,452
Video	4,254		4,346
Voice	373		391
Mobile service	497		387
Residential revenue	10,842		10,576
Small and medium business	1,091		1,070
Enterprise	682		661
Commercial revenue	1,773		1,731
Advertising sales	355		383
Other	683		508
	$	13,653	$	13,198

As of March 31, 2023 and December 31, 2022, accounts receivable, net on the consolidated balance sheets includes approximately $632 million and $577 million of current equipment installment plan receivables, respectively, and other noncurrent assets includes approximately $352 million and $261 million of noncurrent equipment installment plan receivables, respectively.

7

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(dollars in millions, except where indicated)

6.     Operating Costs and Expenses

Operating costs and expenses, exclusive of items shown separately in the consolidated statements of operations, consist of the following for the periods presented:

	Three Months Ended March 31,
	2023		2022
Programming	$	2,799	$	2,977
Other costs of revenue	1,328		1,108
Costs to service customers	2,095		1,959
Sales and marketing	946		880
Other expense	1,371		1,234
	$	8,539	$	8,158

Programming costs consist primarily of costs paid to programmers for basic, premium, video on demand and pay-per-view programming. Other costs of revenue include costs directly related to providing Internet, video, voice and mobile services including mobile device costs, payments to franchise and regulatory authorities, payments for sports, local and news content produced by the Company and direct costs associated with selling advertising. Also included in other costs of revenue are content acquisition costs for the Los Angeles Lakers’ basketball games and Los Angeles Dodgers’ baseball games, which are recorded as games are exhibited over the contract period. Costs to service customers include costs related to field operations, network operations and customer operations for the Company’s products, including mobile, sold to non-bulk residential and SMB customers including internal and third-party labor for the non-capitalizable portion of installations, service and repairs, maintenance, bad debt expense, billing and collection, occupancy and vehicle costs. Sales and marketing costs represent the costs of selling and marketing our Internet, video, voice and mobile services to current and potential non-bulk residential and SMB customers, including labor cost. Other expense includes indirect costs associated with the Company’s Spectrum Enterprise, Spectrum Reach and Spectrum Networks businesses, including sales and marketing and bad debt expenses as well as costs associated with selling to and servicing bulk properties. Other expense also includes corporate overhead and stock compensation expense, among others.

7.     Other Operating Expenses, Net

Other operating expenses, net of $11 million and $3 million for the three months ended March 31, 2023 and 2022, respectively, primarily includes net amounts of litigation settlements and employee termination costs.

8.     Other Income (Expenses), Net

Other income (expenses), net consist of the following for the periods presented:

	Three Months Ended March 31,
	2023		2022
Gain (loss) on financial instruments, net (see Note 4)	$	(27)	$	14
Net periodic pension benefits	2		17
Loss on equity investments, net	(79)		(7)
	$	(104)	$	24

9.     Stock Compensation Plans

Charter’s stock incentive plans provide for grants of nonqualified stock options, incentive stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock, restricted stock units and restricted stock.  Directors, officers and other employees of the Company and its subsidiaries, as well as others performing consulting services for the Company, are eligible for grants under the stock incentive plans.

8

CCO HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(dollars in millions, except where indicated)

Charter granted the following equity awards for the periods presented.

	Three Months Ended March 31,
	2023	2022
Stock options	4,235,700	1,372,400
Restricted stock units	1,514,400	423,600

Stock options and restricted stock units generally cliff vest three years from the date of grant. Certain stock options and restricted stock units vest based on achievement of stock price hurdles. Stock options generally expire ten years from the grant date and restricted stock units have no voting rights. Restricted stock generally vests one year from the date of grant.

As of March 31, 2023, total unrecognized compensation remaining to be recognized in future periods totaled $643 million for stock options, $0.2 million for restricted stock and $701 million for restricted stock units and the weighted average period over which they are expected to be recognized is two years for stock options, one month for restricted stock and two years for restricted stock units.

The Company recorded stock compensation expense of $208 million and $147 million for the three months ended March 31, 2023 and 2022, respectively, which is included in operating costs and expenses.

9

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

CCO Holdings, LLC (“CCO Holdings”) is a holding company whose principal assets are the equity interests in its operating subsidiaries. CCO Holdings is a direct subsidiary of CCH I Holdings, LLC (“CCH I”), which is an indirect subsidiary of Charter Communications, Inc. (“Charter”), Charter Communications Holdings, LLC (“Charter Holdings”) and Spectrum Management Holding Company, LLC. All of the outstanding capital stock of CCO Holdings Capital Corp. is owned by CCO Holdings. The consolidated financial statements include the accounts of CCO Holdings and all of its subsidiaries where the underlying operations reside. All significant intercompany accounts and transactions among consolidated entities have been eliminated.

We are a leading broadband connectivity company and cable operator serving more than 32 million customers in 41 states through our Spectrum brand. Over an advanced communications network, we offer a full range of state-of-the-art residential and business services including Spectrum Internet, TV, Mobile and Voice. For small and medium-sized companies, Spectrum Business delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise provides highly customized, fiber-based solutions. Spectrum Reach delivers tailored advertising and production for the modern media landscape. We also distribute award-winning news coverage and sports programming to our customers through Spectrum Networks.

Overview

Beginning in the first quarter of 2023, we removed separate mobile reporting, among several other changes, to better reflect the converged and integrated nature of our business and operations. We made the following changes to our reporting:

•Residential and small and medium business (“SMB”) monthly revenue per customer calculations now include mobile service revenue

•Residential mobile service revenue previously included in mobile revenue is now separately reported in residential revenue

•SMB mobile service revenue previously included in mobile revenue is now included in SMB revenue

•Mobile equipment revenue previously included in mobile revenue is now included in other revenue

•Mobile expenses are no longer reported separately and are included in applicable expense categories

•Other costs of revenue includes regulatory, connectivity and produced content costs as well as mobile device costs and direct costs associated with mobile and selling advertising

•Costs to service customers now also includes costs related to field operations, network operations and customer operations for mobile customers but no longer includes costs to service bulk properties

•Sales and marketing expense, which previously included sales and marketing for Spectrum Enterprise, Spectrum Reach and Spectrum Networks as well as costs associated with selling to and servicing bulk properties, now only consists of residential and SMB sales and marketing expenses, including sales and marketing for mobile

•Other expense now also includes sales and marketing for Spectrum Enterprise, Spectrum Reach and Spectrum Networks as well as costs associated with selling to and servicing bulk properties but no longer includes direct costs associated with selling advertising

•Reclasses within capital expenditure categories were made to reclassify all costs associated with our network evolution initiative to upgrade/rebuild

•Line extensions capital expenditures are now broken out between subsidized rural construction line extensions and other line extensions

•Subsidized rural construction initiative capital expenditures subcategory only includes rural construction projects for which we are receiving subsidies from federal, state or local governments

There were no changes to total revenue, Adjusted EBITDA, capital expenditures or net income. Prior periods have been revised to conform with the presentation noted above.

During the first quarter of 2023, we added 686,000 mobile lines, 76,000 Internet customers and 16,000 residential and SMB customer relationships, which excludes mobile-only customers. Our Spectrum One offering, which brings together Spectrum Internet, Advanced WiFi and Unlimited Spectrum Mobile to offer consumers fast, reliable and secure online connections on their favorite devices at home and on-the-go in a high-value package, contributed to our increase in mobile lines in the first quarter. We continue to see lower customer move rates and switching behavior among providers, which has reduced our selling opportunities. We are beginning to see benefits from the targeted investments we are making in employee wages and benefits inside of our operations to build employee skill sets and tenure, as well as the continued investments in digitization of our

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customer service platforms and proactive maintenance, all with the goal of improving the customer experience, reducing transactions and driving customer growth and retention.

We spent $391 million on our subsidized rural construction initiative during the three months ended March 31, 2023. We expect that over time, our subsidized rural construction initiative will support customer growth, and in the first quarter of 2023, we activated approximately 44,000 subsidized rural passings. In addition, we continue to evolve and upgrade our network to provide higher Internet speeds and reliability and invest in our products and customer service platforms. We currently offer Spectrum Internet products with speeds up to 1 Gbps across our entire footprint and over the next three years, we plan to upgrade our network to provide multi-gigabit speeds. Our Advanced WiFi, a managed WiFi service that provides customers an optimized home network while providing greater control of their connected devices with enhanced security and privacy, is available to all Internet customers. We continue to invest in our ability to provide a differentiated Internet connectivity experience for our mobile and fixed Internet customers with increasing availability of out-of-home WiFi access points across our footprint. In addition, we continue to work towards the construction of our own 5G mobile data-only network leveraging our Citizen Broadband Radio Service ("CBRS") Priority Access Licenses. By continually improving our product set and offering consumers the opportunity to save money by switching to our services, we believe we can continue to penetrate our expanding footprint and capture more spend on additional products for our existing customers.

We realized revenue, Adjusted EBITDA and income from operations during the periods presented as follows (in millions; all percentages are calculated using whole numbers; minor differences may exist due to rounding):

	Three Months Ended March 31,
	2023		2022		% Change
Revenues	$	13,653	$	13,198	3.4	%
Adjusted EBITDA	$	5,322	$	5,187	2.6	%
Income from operations	$	2,904	$	2,751	5.6	%

Adjusted EBITDA is defined as consolidated net income plus interest expense, net, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. See “Use of Adjusted EBITDA and Free Cash Flow” for further information on Adjusted EBITDA and free cash flow. 

Growth in total revenue was primarily due to pass-through of programming cost increases to video customers and other price adjustments and growth in our residential mobile, Internet and commercial customers. Adjusted EBITDA growth and changes in income from operations were impacted by growth in revenue and increases in operating costs and expenses, primarily other costs of revenue and costs to service customers partly offset by a decrease in programming expense.

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The following table summarizes our customer statistics for Internet, video, voice and mobile as of March 31, 2023 and 2022 (in thousands except per customer data and footnotes).

	Approximate as of
	March 31,
	2023 (a)		2022 (a)
Customer Relationships (b)
Residential	29,996		30,035
SMB	2,215		2,163
Total Customer Relationships	32,211		32,198
Monthly Residential Revenue per Residential Customer (c)	$	120.56	$	117.58
Monthly SMB Revenue per SMB Customer (d)	$	164.58	$	165.58
Internet
Residential	28,479		28,301
SMB	2,030		1,973
Total Internet Customers	30,509		30,274
Video
Residential	14,260		15,093
SMB	646		628
Total Video Customers	14,906		15,721
Voice
Residential	7,473		8,465
SMB	1,290		1,288
Total Voice Customers	8,763		9,753
Mobile Lines (e)
Residential	5,782		3,805
SMB	196		132
Total Mobile Lines	5,978		3,937
Enterprise Primary Service Units ("PSUs") (f)	288		274

(a)We calculate the aging of customer accounts based on the monthly billing cycle for each account. On that basis, as of March 31, 2023 and 2022, customers include approximately 119,800 and 132,500 customers, respectively, whose accounts were over 60 days past due, approximately 42,100 and 29,000 customers, respectively, whose accounts were over 90 days past due and approximately 217,800 and 74,500 customers, respectively, whose accounts were over 120 days past due. Bad debt expense associated with these past due accounts has been reflected in our consolidated statements of operations. The increase in accounts past due is predominately due to pre-existing and incremental unsubsidized amounts of customers’ bills for those customers participating in government assistance programs, including video services. These customers are downgraded to a fully subsidized Internet-only service.

(b)Customer relationships include the number of customers that receive one or more levels of service, encompassing Internet, video, voice and mobile services, without regard to which service(s) such customers receive. Customers who reside in residential multiple dwelling units (“MDUs”) and that are billed under bulk contracts are counted based on the number of billed units within each bulk MDU. Total customer relationships exclude enterprise and mobile-only customer relationships.

(c)Monthly residential revenue per residential customer is calculated as total residential quarterly revenue divided by three divided by average residential customer relationships during the respective quarter and excludes mobile-only customers.

(d)Monthly SMB revenue per SMB customer is calculated as total SMB quarterly revenue divided by three divided by average SMB customer relationships during the respective quarter and excludes mobile-only customers.

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(e)Mobile lines include phones and tablets which require one of our standard rate plans (e.g., "Unlimited" or "By the Gig"). Mobile lines exclude wearables and other devices that do not require standard phone rate plans.

(f)Enterprise PSUs represent the aggregate number of fiber service offerings counting each separate service offering at each customer location as an individual PSU.

Critical Accounting Policies and Estimates

For a discussion of our critical accounting policies and the means by which we develop estimates therefore, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K. There have been no material changes from the critical accounting policies described in our Form 10-K.

Results of Operations

The following table sets forth the consolidated statements of operations for the periods presented (dollars in millions):

	Three Months Ended March 31,
	2023		2022
Revenues	$	13,653	$	13,198
Costs and Expenses:
Operating costs and expenses (exclusive of items shown separately below)	8,539		8,158
Depreciation and amortization	2,199		2,286
Other operating expenses, net	11		3
	10,749		10,447
Income from operations	2,904		2,751
Other Income (Expenses):
Interest expense, net	(1,256)		(1,053)
Other income (expenses), net	(104)		24
	(1,360)		(1,029)
Income before income taxes	1,544		1,722
Income tax expense	(14)		(13)
Consolidated net income	$	1,530	$	1,709

Revenues. Total revenues grew $455 million for the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to price adjustments and increases in the number of residential mobile, Internet and commercial customers.

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Revenues by service offering were as follows (dollars in millions; all percentages are calculated using whole numbers; minor differences may exist due to rounding):

	Three Months Ended March 31,
	2023		2022		% Change
Internet	$	5,718	$	5,452	4.9	%
Video	4,254		4,346		(2.1)	%
Voice	373		391		(4.6)	%
Mobile service	497		387		28.3	%
Residential revenue	10,842		10,576		2.5	%
Small and medium business	1,091		1,070		2.0	%
Enterprise	682		661		3.1	%
Commercial revenue	1,773		1,731		2.4	%
Advertising sales	355		383		(7.2)	%
Other	683		508		34.5	%
	$	13,653	$	13,198	3.4	%

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

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Increase related to rate and product mix changes	$	226
Increase in average residential Internet customers	40
	$	266

The increase related to rate and product mix was primarily due to promotional roll-off and rate adjustments. Residential Internet customers grew by 178,000 customers from March 31, 2022 to March 31, 2023.

Video revenues consist primarily of revenues from video services provided to our residential customers, as well as franchise fees, equipment service fees and video installation revenue. The decrease in video revenues is attributable to the following (dollars in millions):

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Decrease in average residential video customers	$	(223)
Increase related to rate and product mix changes	131
	$	(92)

Residential video customers decreased by 833,000 from March 31, 2022 to March 31, 2023. The increase related to rate and product mix was primarily due to pass-through of programming cost increases and promotional roll-off and was partly offset by a higher mix of lower cost video packages within our video customer base.

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

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Decrease in average residential voice customers	$	(44)
Increase related to rate	26
	$	(18)

Residential wireline voice customers decreased by 992,000 customers from March 31, 2022 to March 31, 2023.

Residential mobile service revenues increased $110 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to an increase of 1,977,000 mobile lines from March 31, 2022 to March 31, 2023.

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

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Increase in SMB customers	$	28
Decrease related to rate and product mix changes	(7)
	$	21

SMB customers grew by 52,000 from March 31, 2022 to March 31, 2023.

Enterprise revenues increased $21 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to an increase in Internet PSUs partly offset by lower wholesale PSUs. Enterprise PSUs increased 14,000 from March 31, 2022 to March 31, 2023.

Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors, as well as local cable and advertising on regional sports and news channels. Advertising sales revenues decreased $28 million during the three months ended March 31, 2023 as compared to the corresponding period in 2022 primarily due to a decrease in political and local ad revenue partly offset by higher advanced advertising.

Other revenues consist of revenue from mobile and video device sales, processing fees, regional sports and news channels (excluding intercompany charges or advertising sales on those channels), subsidy revenue, home shopping, wire maintenance fees and other miscellaneous revenues. Other revenues increased $175 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to higher mobile device sales.

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Operating costs and expenses. The increase in our operating costs and expenses, exclusive of items shown separately in the consolidated statements of operations, are attributable to the following (dollars in millions):

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Programming	$	(178)
Other costs of revenue	220
Costs to service customers	136
Sales and marketing	66
Other	137
	$	381

Programming costs were approximately $2.8 billion and $3.0 billion for the three months ended March 31, 2023 and 2022, representing 33% and 36% of total operating costs and expenses, respectively. Programming costs consist primarily of costs paid to programmers for basic, premium, video on demand, and pay-per-view programming. Programming costs decreased as a result of fewer customers and a higher mix of lower cost video packages within our video customer base partly offset by contractual rate adjustments, including renewals and increases in amounts paid for retransmission consent. First quarter 2023 programming costs include $50 million of favorable adjustments, which is similar in size to sports network rebates and other favorable adjustments in the first quarter of 2022.

Other costs of revenue increased $220 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to higher mobile device sales and higher other mobile direct costs due to an increase in mobile lines.

Costs to service customers increased $136 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to adjustments to job structure, pay and benefits to build a more skilled and longer tenured workforce resulting in lower frontline employee attrition compared to 2022, and additional activity to support the accelerated growth of Spectrum Mobile.

Sales and marketing increased $66 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to higher staffing across sales channels and the accelerated growth of Spectrum Mobile.

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

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Stock compensation expense	$	61
Corporate costs	36
Enterprise	14
Other	26
	$	137

Stock compensation expense increased during the three months ended March 31, 2023 compared to the corresponding prior period primarily due to an increase in equity awards granted. Corporate and enterprise costs increased primarily due to higher labor costs.

Depreciation and amortization. Depreciation and amortization expense decreased by $87 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to certain assets acquired in acquisitions becoming fully depreciated partly offset by an increase in depreciation as a result of more recent capital expenditures.

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Other operating expenses, net. Other operating expenses, net increased $8 million during the three months ended March 31, 2023 compared to the corresponding period in 2022 primarily due to an increase in employee termination costs.

Interest expense, net. Net interest expense increased by $203 million for the three months ended March 31, 2023, compared to the corresponding period in 2022. The increase in net interest expense is the result of an increase in weighted average interest rates as well as an increase in weighted average debt outstanding of approximately $4.7 billion during the three months ended March 31, 2023 compared to the corresponding period in 2022. The increase in weighted average debt outstanding is primarily due to the issuance of notes throughout 2022 and 2023.

Other income (expenses), net. The change in other income (expenses), net is attributable to the following (dollars in millions):

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Gain (loss) on financial instruments, net (see Note 4)	$	(41)
Net periodic pension benefits	(15)
Loss on equity investments, net	(72)
	$	(128)

See Note 8 and the Note referenced above to the accompanying consolidated financial statements contained in “Item 1. Financial Statements” for more information.

Income tax expense. We recognized income tax expense of $14 million and $13 million for the three months ended March 31, 2023 and 2022, respectively.

Consolidated net income. Consolidated net income decreased $179 million during the three months ended March 31, 2023 compared to the corresponding period in 2022, primarily as a result of the factors described above.

Use of Adjusted EBITDA and Free Cash Flow

We use certain measures that are not defined by U.S. generally accepted accounting principles (“GAAP”) to evaluate various aspects of our business. Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, consolidated net income and net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by us, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA and free cash flow are reconciled to consolidated net income and net cash flows from operating activities, respectively, below.

Adjusted EBITDA eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our businesses as well as other non-cash or special items, and is unaffected by our capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of financing. These costs are evaluated through other financial measures.

Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.

Management and Charter’s board of directors use Adjusted EBITDA and free cash flow to assess our performance and our ability to service our debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under our credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the Securities and Exchange Commission (the “SEC”)). For the purpose of calculating compliance with leverage covenants, we use Adjusted EBITDA, as presented, excluding certain expenses paid by our operating subsidiaries to other Charter entities. Our debt covenants refer to these expenses as management fees, which were $374 million and $342 million for the three months ended March 31, 2023 and 2022, respectively.

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

	Three Months Ended March 31,
	2023		2022
Consolidated net income	$	1,530	$	1,709
Plus: Interest expense, net	1,256		1,053
Income tax expense	14		13
Depreciation and amortization	2,199		2,286
Stock compensation expense	208		147
Other, net	115		(21)
Adjusted EBITDA	$	5,322	$	5,187
Net cash flows from operating activities	$	3,390	$	3,644
Less: Purchases of property, plant and equipment	(2,464)		(1,857)
Change in accrued expenses related to capital expenditures	(195)		10
Free cash flow	$	731	$	1,797

Liquidity and Capital Resources

Introduction

This section contains a discussion of our liquidity and capital resources, including a discussion of our cash position, sources and uses of cash, access to credit facilities and other financing sources, historical financing activities, cash needs, capital expenditures and outstanding debt.

Recent Events

In February 2023, CCO Holdings and CCO Holdings Capital Corp. jointly issued $1.1 billion of 7.375% senior unsecured notes due March 2031 at par. The net proceeds were used for general corporate purposes, including repaying certain indebtedness, distributions to the Company's parent companies to fund buybacks of Charter Class A common stock and Charter Holdings common units and to pay related fees and expenses.

In February 2023, Charter Operating entered into an amendment to its credit agreement to replace London Interbank Offering Rate (“LIBOR”) as the benchmark rate applicable to the Term B loans with Secured Overnight Financing Rate (“SOFR”) and in March 2023, Charter Operating entered into another amendment to its credit agreement to incur a new Term B-3 loan with an aggregate principal amount of $750 million maturing in 2030 concurrently with the cancelation of certain of Charter Operating's existing Term B-1 and B-2 loans, among other amendments. Pricing on the new Term B-3 loan is SOFR plus 2.25%. After giving effect to the amendments, the aggregate principal amount of Term B-1 loans is $2.3 billion with pricing unchanged at SOFR plus 1.75% and the aggregate principal amount of Term B-2 loans is $3.1 billion with pricing unchanged at SOFR plus 1.75%.

Overview of Our Contractual Obligations and Liquidity

We have significant amounts of debt. The principal amount of our debt as of March 31, 2023 was $97.8 billion, consisting of $14.6 billion of credit facility debt, $55.9 billion of investment grade senior secured notes and $27.3 billion of high-yield senior unsecured notes. Our business requires significant cash to fund principal and interest payments on our debt. 

Our projected cash needs and projected sources of liquidity depend upon, among other things, our actual results, and the timing and amount of our expenditures. As we continue to grow our market penetration of our mobile product, we will continue to experience negative working capital impacts from the timing of device-related cash flows when we sell devices to customers pursuant to equipment installment plans. Further, in 2022, Charter became a meaningful federal cash tax payer as the majority of their net operating losses have been utilized, which will be funded by distributions from us. Free cash flow was $731 million and $1.8 billion for the three months ended March 31, 2023 and 2022, respectively. See the table below for factors impacting

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free cash flow during the three months ended March 31, 2023 compared to the corresponding prior period. As of March 31, 2023, the amount available under our credit facilities was approximately $3.3 billion and cash on hand was approximately $292 million. We expect to utilize free cash flow, cash on hand and availability under our credit facilities as well as future refinancing transactions to further extend the maturities of our obligations. The timing and terms of any refinancing transactions will be subject to market conditions among other considerations. Additionally, we may, from time to time, and depending on market conditions and other factors, use cash on hand and the proceeds from securities offerings or other borrowings to retire our debt through open market purchases, privately negotiated purchases, tender offers or redemption provisions. We believe we have sufficient liquidity from cash on hand, free cash flow and Charter Communications Operating, LLC's ("Charter Operating") revolving credit facility as well as access to the capital markets to fund our projected cash needs.

We continue to evaluate the deployment of our cash on hand and anticipated future free cash flow including to invest in our business growth and other strategic opportunities, including our network evolution and expansion initiatives, the build-out and deployment of our CBRS spectrum, and mergers and acquisitions as well as distributions to parent companies for stock repurchases and dividends. Charter's target leverage of net debt to the last twelve months Adjusted EBITDA remains at 4 to 4.5 times Adjusted EBITDA, and up to 3.5 times Adjusted EBITDA at the Charter Operating first lien level. Our leverage ratio was 4.5 times Adjusted EBITDA as of March 31, 2023. As Adjusted EBITDA grows, we expect to increase the total amount of our indebtedness to maintain leverage within Charter's target leverage range. Excluding purchases from Liberty Broadband Corporation (“Liberty Broadband”) discussed below, during the three months ended March 31, 2023 and 2022, Charter purchased in the public market approximately 2.2 million and 4.4 million shares of Charter Class A common stock, respectively, for approximately $821 million and $2.6 billion, respectively. Since the beginning of its buyback program in September 2016 through March 31, 2023, Charter has purchased approximately 152.0 million shares of Class A common stock and Charter Holdings common units for approximately $69.4 billion, including purchases from Liberty Broadband and A/N discussed below.

In February 2021, Charter and Liberty Broadband entered into a letter agreement (the “LBB Letter Agreement”). The LBB Letter Agreement implements Liberty Broadband’s obligations under the Amended and Restated Stockholders Agreement among Charter, Liberty Broadband and A/N, dated as of May 23, 2015 (as amended, the “Stockholders Agreement”) to participate in share repurchases by Charter. Under the LBB Letter Agreement, Liberty Broadband will sell to Charter, generally on a monthly basis, a number of shares of Charter Class A common stock representing an amount sufficient for Liberty Broadband’s ownership of Charter to be reduced such that it does not exceed the ownership cap then applicable to Liberty Broadband under the Stockholders Agreement at a purchase price per share equal to the volume weighted average price per share paid by Charter for shares repurchased during such immediately preceding calendar month other than (i) purchases from A/N, (ii) purchases in privately negotiated transactions or (iii) purchases for the withholding of shares of Charter Class A common stock pursuant to equity compensation programs of Charter. Charter purchased from Liberty Broadband 0.1 million and 1.0 million shares of Charter Class A common stock for approximately $42 million and $602 million during the three months ended March 31, 2023 and 2022, respectively.

In December 2016, Charter and A/N entered into a letter agreement, as amended in December 2017 (the “A/N Letter Agreement”), that requires A/N to sell to Charter or to Charter Holdings, on a monthly basis, a number of shares of Charter Class A common stock or Charter Holdings common units that represents a pro rata participation by A/N and its affiliates in any repurchases of shares of Charter Class A common stock from persons other than A/N effected by Charter during the immediately preceding calendar month, at a purchase price equal to the average price paid by Charter for the shares repurchased from persons other than A/N during such immediately preceding calendar month. A/N and Charter both have the right to terminate or suspend the pro rata repurchase arrangement on a prospective basis. During the three months ended March 31, 2023 and 2022, Charter Holdings purchased from A/N 0.3 million and 0.7 million Charter Holdings common units for approximately $122 million and $416 million, respectively.

As of March 31, 2023, Charter had remaining board authority to purchase an additional $305 million of Charter’s Class A common stock and/or Charter Holdings common units, excluding purchases from Liberty Broadband. Although Charter expects to continue to buy back its common stock consistent with its leverage target range, Charter is not obligated to acquire any particular amount of common stock, and the timing of any purchases that may occur cannot be predicted and will largely depend on market conditions and other potential uses of capital. Purchases may include open market purchases, tender offers or negotiated transactions. To the extent such purchases occur, CCO Holdings and its subsidiaries are the primary source for funding such purchases through distributions to their parent companies.

As possible acquisitions, swaps or dispositions arise, we actively review them against our objectives including, among other considerations, improving the operational efficiency, geographic clustering of assets, product development or technology capabilities of our business and achieving appropriate return targets, and we may participate to the extent we believe these

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possibilities present attractive opportunities. However, there can be no assurance that we will actually complete any acquisitions, dispositions or system swaps, or that any such transactions will be material to our operations or results.

Free Cash Flow

Free cash flow decreased $1.1 billion during the three months ended March 31, 2023 compared to the corresponding prior period in 2022 due to the following (dollars in millions):

	Three months ended March 31, 2023 compared to three months ended March 31, 2022 Increase / (Decrease)
Changes in working capital, excluding change in accrued interest and taxes	$	(612)
Increase in capital expenditures	(607)
Increase in cash paid for interest, net	(206)
Increase in cash paid for taxes, net	12
Increase in Adjusted EBITDA	135
Other, net	212
	$	(1,066)

Financial Information about Guarantors, Issuers of Guaranteed Securities, Affiliates Whose Securities Collateralize a Registrant’s Securities and Consolidated Subsidiaries

Each of CCO Holdings, Charter Operating, Time Warner Cable, LLC and Time Warner Cable Enterprises LLC (collectively, the “Issuers”) and substantially all of Charter Operating’s direct and indirect subsidiaries (the “Obligor Subsidiaries” and together with the Issuers, collectively, the “Obligor Group” and each an “Obligor”) jointly, severally, fully and unconditionally guarantee the outstanding debt securities of the respective Issuers (other than the CCO Holdings unsecured notes) and Charter Operating’s credit facilities on a senior basis (collectively, the “Guaranteed and Secured Debt”). Such guarantees are pari passu in right of payment with all senior indebtedness of the guarantors and senior in right of payment to subordinated obligations of the guarantors. Each guarantee will be limited to the maximum amount that can be guaranteed by the relevant guarantor without rendering the relevant guarantee, as it relates to that guarantor, voidable or otherwise ineffective or limited under applicable law, and enforcement of each guarantee would be subject to certain generally available defenses. The Guaranteed and Secured Debt is structurally subordinated to the creditors (including trade creditors) and preference shareholders (if any) of Charter Operating’s non-guarantor subsidiaries.

The Guaranteed and Secured Debt and the subsidiary guarantees thereof are also secured by (i) a lien on substantially all of the assets of Charter Operating and the Obligor Subsidiaries, to the extent such lien can be perfected under the Uniform Commercial Code by the filing of a financing statement, and (ii) a pledge of substantially all of the equity interests of subsidiaries owned by Charter Operating or the Obligor Subsidiaries (the “Pledged Equity Interests”), as well as intercompany obligations owing to it by any of such entities ((i) and (ii) collectively, the “Collateral”). In addition, payments of a mortgage note, currently outstanding for approximately $305 million, incurred by a single-asset special purpose entity to finance construction of the first building of the new Charter headquarters in Stamford, Connecticut are guaranteed by the Obligor Group and rank equally with the liens on the Collateral securing the Guaranteed and Secured Debt. No assets of any of Charter Operating’s non-guarantor subsidiaries (including any capital stock owned by any such subsidiary) will constitute Collateral. The subsidiary guarantees are effectively senior to all unsecured debt or debt secured by junior liens of the subsidiary guarantors, in each case to the extent of the value of the collateral securing the guarantee obligations of the subsidiary guarantors. Upon the occurrence and during the continuance of an event of default under the Guaranteed and Secured Debt, subject to the terms of an intercreditor agreement, the security documents governing the Guaranteed and Secured Debt provide for (among other available remedies) the foreclosure upon and sale of the Collateral by the collateral agent(s) of the respective Guaranteed and Secured Debt and the distribution of the net proceeds of any such sale to the holders and/or the lenders of the Guaranteed and Secured Debt on a pro rata basis, subject to any prior liens on the Collateral. We believe there is no separate trading market for the Pledged Equity Interests.

Certain Charter Operating subsidiaries that are regulated entities are only designated as guarantor subsidiaries, and certain related assets (including the capital stock of such regulated entities) are only required to be pledged as Collateral, upon approval

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by regulators. The guaranteed obligations and collateral of an Obligor Subsidiary (including Pledged Equity Interests) may be released under certain circumstances permitted under the documentation governing the Guaranteed and Secured Debt, including if an Obligor Subsidiary no longer qualifies as a “Subsidiary” of Charter Operating under transactions not prohibited by the Charter Operating credit agreement.

See Note 8 to the consolidated financial statements contained in our 2022 Annual Report on Form 10-K for further details about the terms, conditions and other factors that may affect payments to holders and the collateral arrangements of the Guaranteed and Secured Debt.

Because the assets, liabilities and results of operations of the combined Obligor Group are not materially different than corresponding amounts presented in the consolidated financial statements of CCO Holdings, summarized financial information of the Obligor Group have been omitted pursuant to SEC Regulation S-X Rule 13-01, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered and S-X Rule 13-02, Affiliates Whose Securities Collateralize Securities Registered Or Being Registered.

Limitations on Distributions

Distributions by us and our subsidiaries to a parent company for payment of principal on parent company notes are restricted under CCO Holdings indentures governing CCO Holdings' indebtedness, unless there is no default under the applicable indenture, and unless CCO Holdings' leverage ratio test is met at the time of such distribution. As of March 31, 2023, there was no default under any of these indentures, and CCO Holdings met its leverage ratio test based on March 31, 2023 financial results. There can be no assurance that CCO Holdings will satisfy its leverage ratio test at the time of the contemplated distribution.

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

Historical Operating, Investing, and Financing Activities

Cash and Cash Equivalents. We held $292 million and $392 million in cash and cash equivalents as of March 31, 2023 and December 31, 2022, respectively.

Operating Activities. Net cash provided by operating activities decreased $254 million during the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to an increase in cash paid for interest and changes in working capital, partly offset by an increase in Adjusted EBITDA of $135 million.

Investing Activities. Net cash used in investing activities was $2.7 billion and $1.9 billion for the three months ended March 31, 2023 and 2022, respectively. The increase in cash used was primarily due to an increase in capital expenditures and changes in accrued expenses related to capital expenditures that increased by $205 million.

Financing Activities. Net cash used in financing activities increased $782 million during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily due to a decrease in the amount by which borrowings of long-term debt exceeded repayments, partly offset by a decrease in distributions to parent companies.

Capital Expenditures

We have significant ongoing capital expenditure requirements.  Capital expenditures were $2.5 billion and $1.9 billion for the three months ended March 31, 2023 and 2022, respectively.  The increase was primarily due to an increase in line extensions in connection with our subsidized rural construction initiative and continued residential and commercial network expansion. The increase in capital expenditures excluding line extensions was primarily driven by higher spend on network evolution, customer premise equipment and support capital. See the table below for more details.

We currently expect full year 2023 capital expenditures, excluding line extensions, to be between $6.5 billion and $6.8 billion. We expect 2023 line extensions capital expenditures to be approximately $4 billion. The actual amount of capital expenditures in 2023 will depend on a number of factors including, but not limited to, the pace of our network evolution and expansion initiatives, supply chain timing and growth rates in our residential and commercial businesses.

21

Our capital expenditures are funded primarily from cash flows from operating activities and borrowings on our credit facility. In addition, our accrued liabilities related to capital expenditures decreased by $195 million and increased by $10 million for the three months ended March 31, 2023 and 2022, respectively.

The following tables present our major capital expenditures categories in accordance with National Cable and Telecommunications Association (“NCTA”) disclosure guidelines for the three months ended March 31, 2023 and 2022. These disclosure guidelines are not required disclosures under GAAP, nor do they impact our accounting for capital expenditures under GAAP (dollars in millions):

	Three Months Ended March 31,
	2023		2022
Customer premise equipment (a)	$	537	$	469
Scalable infrastructure (b)	354		359
Upgrade/rebuild (c)	289		159
Support capital (d)	394		329
Capital expenditures, excluding line extensions	1,574		1,316
Subsidized rural construction line extensions	371		192
Other line extensions	519		349
Total line extensions (e)	890		541
Total capital expenditures	$	2,464	$	1,857
Of which:
Commercial services	$	367	$	365
Subsidized rural construction initiative (f)	$	391	$	201
Mobile	$	77	$	74

(a)Customer premise equipment includes equipment and devices located at the customer's premise used to deliver our Internet, video and voice services (e.g., modems, routers and set-top boxes), as well as installation costs.

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

(c)Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including our network evolution initiative which started in 2022.

(d)Support capital includes costs associated with the replacement or enhancement of non-network assets (e.g., back-office systems, non-network equipment, land and buildings, vehicles, tools and test equipment).

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

(f)The subsidized rural construction initiative subcategory includes projects for which we are receiving subsidies from federal, state and local governments (for which separate reporting was initiated in 2022), excluding customer premise equipment and installation.

Recently Issued Accounting Standards

See Note 20 to the Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of recently issued accounting standards. There have been no material changes from the recently issued accounting standards described in our Form 10-K.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes to the interest rate risk as previously disclosed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022. See Note 3 to the accompanying consolidated financial statements contained in “Item 1. Financial Statements” for a discussion of notes issued during the three months ended March 31, 2023.

22

Item 4.     Controls and Procedures.

As of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our design and operation of disclosure controls and procedures with respect to the information generated for use in this quarterly report. The evaluation was based upon reports and certifications provided by a number of executives. Based on, and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to provide reasonable assurances that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon the evaluation, we believe that our controls provide such reasonable assurances.

During the quarter ended March 31, 2023, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

23

PART II. OTHER INFORMATION

Item 1.     Legal Proceedings.

See Note 18 to the Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of legal proceedings. There have been no material changes from the legal proceedings described in our Form 10-K.

Item 1A.     Risk Factors.

Our Annual Report on Form 10-K for the year ended December 31, 2022 includes "Risk Factors" under Item 1A of Part I. There have been no material changes from the risk factors described in our Form 10-K.

Item 6.     Exhibits.

See Exhibit Index.

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, CCO Holdings, LLC and CCO Holdings Capital Corp. has duly caused this quarterly report to be signed on their behalf by the undersigned, thereunto duly authorized.

	CCO HOLDINGS, LLC
	Registrant
	By:	/s/ Kevin D. Howard
		Kevin D. Howard
Date: April 28, 2023		Executive Vice President, Chief Accounting Officer and Controller
	CCO HOLDINGS CAPITAL CORP.
	Registrant
	By:	/s/ Kevin D. Howard
		Kevin D. Howard
Date: April 28, 2023		Executive Vice President, Chief Accounting Officer and Controller

S-1

Exhibit Index

Exhibit	Description
4.1	Indenture, dated as of May 23, 2019, among CCO Holdings, LLC, CCO Holdings Capital Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by Charter Communications, Inc. on May 30, 2019).
4.2	Tenth Supplemental Indenture, dated as of February 13, 2023, among CCO Holdings, LLC, CCO Holdings Capital Corp. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by Charter Communications, Inc. on February 16, 2023).
4.3	Form of 7.375% Senior Notes due 2031 (included in Exhibit 4.2 hereto).
10.1	Exchange and Registration Rights Agreement, dated February 13, 2023, relating to the 7.375% Senior Notes due 2031, among CCO Holdings, LLC, CCO Holdings Capital Corp. and Morgan Stanley & Co. LLC, as representative of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Charter Communications, Inc. on February 16, 2023).
10.2	Amendment No. 3, dated as of February 10, 2023, to the Amended and Restated Credit Agreement, dated as of March 18, 1999, as amended and restated on April 26, 2019, as amended by Amendment No. 1 on October 24, 2019 and as further amended by Amendment No. 2 on May 26, 2022, by and among Charter Communications Operating, LLC, CCO Holdings, LLC, certain of Charter Communications Operating, LLC’s subsidiaries, the lenders party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Charter Communications, Inc. on February 16, 2023).
10.3	Amendment No. 4 to the Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Charter Communications, Inc. on March 29, 2023).
10.4	Form of Performance-Vesting Stock Option Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Charter Communications, Inc. on February 24, 2023).
10.5	Form of Performance-Vesting Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Charter Communications, Inc. on February 24, 2023).
10.6	Amendment to Amended and Restated Employment Agreement dated as of February 22, 2023 by and between Charter Communications Inc. and Christopher L. Winfrey (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by Charter Communications, Inc. on February 24, 2023).
10.7	Amendment to Employment Agreement dated as of February 22, 2023 by and between Charter Communications Inc. and Richard J. DiGeronimo (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by Charter Communications, Inc. on February 24, 2023).
22.1	Issuers and Guarantors of Guaranteed Securities and Affiliate Securities Pledged as Collateral.
31.1	Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the under the Securities Exchange Act of 1934.
31.2	Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) under the Securities Exchange Act of 1934.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
101	The following financial information from Charter Communications, Inc.’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023, filed with the Securities and Exchange Commission on April 28, 2023, formatted in iXBRL (inline eXtensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Changes in Member's Equity; (iv) the Consolidated Statements of Cash Flows; and (vi) the Notes to the Consolidated Financial Statements.
104	Cover Page, formatted in iXBRL and contained in Exhibit 101.

E-1

EX-22.1

Exhibit 22.1

Issuers and Guarantors of Guaranteed Securities and Affiliate Securities Pledged as Collateral

as of March 31, 2023

CCO Holdings, LLC, a Delaware limited liability company (the “Company”) and each of the CCOH Obligor Subsidiaries (as defined below), have fully and unconditionally guaranteed on a joint, several, full and unconditional basis each of the debt securities listed below, unless such subsidiary is an issuer of the listed debt security. Such guarantees are secured by substantially all of the assets of the CCOH Obligor Subsidiaries, including a pledge of the equity interests of substantially all of the subsidiaries owned by CCO and the other CCOH Obligor Subsidiaries (the “Pledged Equity Interests”).

Debt Securities Issued by Charter Communications Operating, LLC (“CCO”) and Charter Communications Operating Capital Corp. (“CCO Capital”), guaranteed by the Company and each of the CCOH Obligor Subsidiaries (as defined below, other than CCO and CCO Capital) and secured by the Pledged Equity Interests:

Senior floating rate notes due February 1, 2024

4.500% senior notes due February 1, 2024

4.908% senior notes due July 23, 2025

3.750% senior notes due February 15, 2028

4.200% senior notes due March 15, 2028

2.250% senior notes due January 15, 2029

5.050% senior notes due March 30, 2029

2.800% senior notes due April 1, 2031

2.300% senior notes due February 1, 2032

4.400% senior notes due April 1, 2033

6.384% senior notes due October 23, 2035

5.375% senior notes due April 1, 2038

3.500% senior notes due June 1, 2041

3.500% senior notes due March 1, 2042

6.484% senior notes due October 23, 2045

5.375% senior notes due May 1, 2047

5.750% senior notes due April 1, 2048

5.125% senior notes due July 1, 2049

4.800% senior notes due March 1, 2050

3.700% senior notes due April 1, 2051

3.900% senior notes due June 1, 2052

5.250% senior notes due April 1, 2053

6.834% senior notes due October 23, 2055

3.850% senior notes due April 1, 2061

4.400% senior notes due December 1, 2061

3.950% senior notes due June 30, 2062

5.500% senior notes due April 1, 2063

Debt Securities Issued by Time Warner Cable, LLC (“TWC”), guaranteed by the Company and each of the CCOH Obligor Subsidiaries (as defined below, other than TWC) and secured by the Pledged Equity Interests:

5.750% sterling senior notes due June 2, 2031

6.550% senior debentures due May 1, 2037

7.300% senior debentures due July 1, 2038

6.750% senior debentures due June 15, 2039

5.875% senior debentures due November 15, 2040

5.500% senior debentures due September 1, 2041

5.250% sterling senior notes due July 15, 2042

4.500% senior debentures due September 15, 2042

Debt Securities Issued by Time Warner Cable Enterprises LLC (“TWCE”), guaranteed by the Company and each of the CCOH Obligor Subsidiaries (as defined below, other than TWCE) and secured by the Pledged Equity Interests:

8.375% senior debentures due July 15, 2033

“CCOH Obligor Subsidiaries”:

Bresnan Broadband Holdings, LLC

CCO NR Holdings, LLC

Charter Advanced Services (MO), LLC

Charter Communications, LLC

Charter Communications VI, L.L.C.

Charter Distribution, LLC

Charter Leasing Holding Company, LLC

Charter Communications Operating, LLC

Charter Communications Operating Capital Corp.

Charter Procurement Leasing, LLC

DukeNet Communications, LLC

Marcus Cable Associates, L.L.C.

Spectrum Advanced Services, LLC

Spectrum Gulf Coast, LLC

Spectrum Mid-America, LLC

Spectrum Mobile Equipment, LLC

Spectrum Mobile, LLC

Spectrum New York Metro, LLC

Spectrum NLP, LLC

Spectrum Northeast, LLC

Spectrum Oceanic, LLC

Spectrum Originals Development, LLC

Spectrum Originals, LLC

Spectrum Pacific West, LLC

Spectrum Reach, LLC

Spectrum RSN, LLC

Spectrum Security, LLC

Spectrum Southeast, LLC

Spectrum Sunshine State, LLC

Spectrum TV Essentials, LLC

Spectrum Wireless Holdings, LLC

TC Technology LLC

Time Warner Cable Enterprises LLC

Time Warner Cable, LLC

TWC Administration LLC

TWC Communications, LLC

TWC SEE Holdco LLC

EX-31.1

Exhibit 31.1

I, Christopher L. Winfrey, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of CCO Holdings, LLC and CCO Holdings Capital Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 28, 2023

/s/ Christopher L. Winfrey

Christopher L. Winfrey

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Jessica M. Fischer, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of CCO Holdings, LLC and CCO Holdings Capital Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 28, 2023

/s/ Jessica M. Fischer

Jessica M. Fischer

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE

OFFICER REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, Christopher L. Winfrey, the President and Chief Executive Officer of CCO Holdings, LLC and CCO Holdings Capital Corp. (the "Company") in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2023 (the "Report") filed with the Securities and Exchange Commission:

•fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

•the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Christopher L. Winfrey

Christopher L. Winfrey

President and Chief Executive Officer

April 28, 2023

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL

OFFICER REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, Jessica M. Fischer, the Chief Financial Officer of CCO Holdings, LLC and CCO Holdings Capital Corp. (the "Company"), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2023 (the "Report") filed with the Securities and Exchange Commission:

•fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

•the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jessica M. Fischer

Jessica M. Fischer

Chief Financial Officer

(Principal Financial Officer)

April 28, 2023

XML

Document And Entity Information	3 Months Ended
	Mar. 31, 2023 shares
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-37789
Entity Registrant Name	CCO Holdings, LLC
Entity Central Index Key	0001271833
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-1067239
Entity Address, Address Line One	400 Washington Blvd.
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06902
City Area Code	203
Local Phone Number	905-7801
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	1
CCO Holdings Capital Corp.
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	333-112593-01
Entity Registrant Name	CCO Holdings Capital Corp.
Entity Central Index Key	0001271834
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-0257904
Entity Address, Address Line One	400 Washington Blvd.
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06902
City Area Code	203
Local Phone Number	905-7801
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	1

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 292	$ 392
Accounts receivable, less allowance for doubtful accounts of $211 and $219, respectively	2,707	2,869
Receivables from related party	7	0
Prepaid expenses and other current assets	629	402
Total current assets	3,635	3,663
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated depreciation of $36,506 and $36,035, respectively	35,717	35,147
Customer relationships, net of accumulated amortization of $15,777 and $15,478, respectively	2,479	2,772
Franchises	67,366	67,363
Goodwill	29,563	29,563
Total investment in cable properties, net	135,125	134,845
OTHER NONCURRENT ASSETS	4,291	4,259
Total assets	143,051	142,767
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	9,056	9,735
Payables to related party	0	11
Current portion of long-term debt	1,999	1,510
Total current liabilities	11,055	11,256
LONG-TERM DEBT	95,973	96,093
DEFERRED INCOME TAXES	54	54
OTHER LONG-TERM LIABILITIES	3,434	3,471
MEMBER’S EQUITY:
CCO Holdings member's equity	32,512	31,868
Noncontrolling interests	23	25
Total member’s equity	32,535	31,893
Total liabilities and member’s equity	$ 143,051	$ 142,767

XML

CONSOLIDATED BALANCE SHEET (PARENTHETICALS) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
CURRENT ASSETS:
Allowance for doubtful accounts	$ 211	$ 219
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, accumulated depreciation	36,506	36,035
Customer relationships, accumulated amortization	$ 15,777	$ 15,478

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
REVENUES	$ 13,653	$ 13,198
COSTS AND EXPENSES:
Operating costs and expenses (exclusive of items shown separately below)	8,539	8,158
Depreciation and amortization	2,199	2,286
Other operating expenses, net	11	3
Total costs and expenses	10,749	10,447
Income from operations	2,904	2,751
OTHER INCOME (EXPENSES):
Interest expense, net	(1,256)	(1,053)
Other income (expenses), net	(104)	24
Total other income (expenses), net	(1,360)	(1,029)
Income before income taxes	1,544	1,722
Income tax expense	(14)	(13)
Consolidated net income	$ 1,530	$ 1,709

XML

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY - USD ($) $ in Millions	Total	CCO Holdings Member’s Equity	Noncontrolling Interests
Balance at Dec. 31, 2021	$ 36,227	$ 36,203	$ 24
Rollforward of Consolidated Shareholders' Equity:
Consolidated net income	1,709	1,709	0
Stock compensation expense	147	147	0
Contributions from parent	81	81	0
Distributions to parent	(3,775)	(3,775)	0
Distributions to noncontrolling interest	(1)	0	(1)
Balance at Mar. 31, 2022	34,388	34,365	23
Balance at Dec. 31, 2022	31,893	31,868	25
Rollforward of Consolidated Shareholders' Equity:
Consolidated net income	1,530	1,530	0
Stock compensation expense	208	208	0
Distributions to parent	(1,094)	(1,094)	0
Distributions to noncontrolling interest	(2)	0	(2)
Balance at Mar. 31, 2023	$ 32,535	$ 32,512	$ 23

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$ 1,530	$ 1,709
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization	2,199	2,286
Stock compensation expense	208	147
Noncash interest income, net	(8)	(7)
Other, net	104	(24)
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable	162	56
Prepaid expenses and other assets	(332)	(169)
Accounts payable, accrued liabilities and other	(457)	(342)
Receivables from and payables to related party	(16)	(12)
Net cash flows from operating activities	3,390	3,644
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(2,464)	(1,857)
Change in accrued expenses related to capital expenditures	(195)	10
Other, net	(77)	(4)
Net cash flows from investing activities	(2,736)	(1,851)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt	7,104	6,713
Repayments of long-term debt	(6,740)	(2,954)
Payments for debt issuance costs	(18)	(37)
Repayments of loans payable - related parties, net	(3)	0
Distributions to parent	(1,094)	(3,775)
Contributions from parent	0	81
Distributions to noncontrolling interest	(2)	(1)
Other, net	(1)	1
Net cash flows from financing activities	(754)	28
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(100)	1,821
CASH AND CASH EQUIVALENTS, beginning of period	392	321
CASH AND CASH EQUIVALENTS, end of period	292	2,142
CASH PAID FOR INTEREST	1,182	975
CASH PAID FOR TAXES	$ 2	$ 2

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Organization and Basis of Presentation (Notes)

3 Months Ended

Mar. 31, 2023

Organization and Basis of Presentation [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

Organization

CCO Holdings, LLC (together with its subsidiaries, “CCO Holdings,” or the “Company”) is a leading broadband connectivity company and cable operator. Over an advanced communications 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 and sports programming to its customers through Spectrum Networks.

CCO Holdings is a holding company whose principal assets are the equity interests in its operating subsidiaries. CCO Holdings is a direct subsidiary of CCH I Holdings, LLC, which is an indirect subsidiary of Charter Communications, Inc. (“Charter”), Charter Communications Holdings, LLC (“Charter Holdings”) and Spectrum Management Holding Company, LLC (“Spectrum Management”). All of the outstanding capital stock of CCO Holdings Capital Corp. is owned by CCO Holdings. The consolidated financial statements include the accounts of CCO Holdings and all of its subsidiaries where the underlying operations reside. All significant intercompany accounts and transactions among consolidated entities have been eliminated. Charter, Charter Holdings and Spectrum Management have performed financing, cash management, treasury and other services for CCO Holdings on a centralized basis. Changes in member’s equity in the consolidated balance sheets related to these activities have been considered cash receipts (contributions) and payments (distributions) for purposes of the consolidated statements of cash flows and are reflected in financing activities.

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 and pension benefits. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform with the 2023 presentation.

Comprehensive income equaled consolidated net income for the three months ended March 31, 2023 and 2022.

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Accounts Payable and Accrued Liabilities (Notes)

3 Months Ended

Mar. 31, 2023

Accounts Payable and Accrued Liabilities [Abstract]

Accounts Payable and Accrued Liabilities

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following as of March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022
Accounts payable – trade	$	726	$	914
Deferred revenue	523		511
Accrued liabilities:
Programming costs	1,882		1,914
Labor	947		1,306
Capital expenditures	1,592		1,792
Interest	1,248		1,165
Taxes and regulatory fees	507		512
Operating lease liabilities	257		261
Other	1,374		1,360
	$	9,056	$	9,735

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Long-Term Debt (Notes)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

A summary of our debt as of March 31, 2023 and December 31, 2022 is as follows:

	March 31, 2023						December 31, 2022
	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Senior unsecured notes	$	27,250	$	27,159	$	23,638	$	26,650	$	26,567	$	22,426
Senior secured notes and debentures(a)	55,873		56,230		47,636		56,841		57,213		46,905
Credit facilities(b)	14,640		14,583		14,267		13,877		13,823		13,467
	$	97,763	$	97,972	$	85,541	$	97,368	$	97,603	$	82,798

(a)Includes the Company's £625 million fixed-rate British pound sterling denominated notes (the “Sterling Notes”) (remeasured at $771 million and $755 million as of March 31, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates) and the Company's £650 million aggregate principal amount of Sterling Notes (remeasured at $802 million and $786 million as of March 31, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates).

(b)The Company has availability under the Charter Communications Operating, LLC ("Charter Operating") credit facilities of approximately $3.3 billion as of March 31, 2023.

The estimated fair value of the Company’s senior unsecured and secured notes and debentures as of March 31, 2023 and December 31, 2022 is based on quoted market prices in active markets and is classified within Level 1 of the valuation hierarchy, while the estimated fair value of the Company’s credit facilities is based on quoted market prices in inactive markets and is classified within Level 2.

In February 2023, CCO Holdings and CCO Holdings Capital Corp. jointly issued $1.1 billion of 7.375% senior unsecured notes due March 2031 at par. The net proceeds were used for general corporate purposes, including repaying certain indebtedness, distributions to the Company's parent companies to fund buybacks of Charter Class A common stock and Charter Holdings common units and to pay related fees and expenses.

In February 2023, Charter Operating entered into an amendment to its credit agreement to replace London Interbank Offering Rate ("LIBOR") as the benchmark rate applicable to the Term B loans with Secured Overnight Financing Rate ("SOFR") and in March 2023, Charter Operating entered into another amendment to its credit agreement to incur a new Term B-3 loan with an aggregate principal amount of $750 million maturing in 2030 concurrently with the cancelation of certain of Charter

Operating's existing Term B-1 and B-2 loans, among other amendments. Pricing on the new Term B-3 loan is SOFR plus 2.25%. After giving effect to the amendments, the aggregate principal amount of Term B-1 loans is $2.3 billion with pricing unchanged at SOFR plus 1.75% and the aggregate principal amount of Term B-2 loans is $3.1 billion with pricing unchanged at SOFR plus 1.75%.

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Accounting for Derivative Instruments and Hedging Activities (Notes)

3 Months Ended

Mar. 31, 2023

Accounting for Derivative Instruments and Hedging Activities [Abstract]

Accounting for Derivative Instruments and Hedging Activities

Accounting for Derivative Instruments and Hedging Activities

Cross-currency derivative instruments are used to manage foreign exchange risk on the Sterling Notes by effectively converting £1.275 billion aggregate principal amount of fixed-rate British pound sterling denominated debt, including annual interest payments and the payment of principal at maturity, to fixed-rate U.S. dollar denominated debt. The fair value of the Company's cross-currency derivatives, which are classified within Level 2 of the valuation hierarchy, was $565 million and $570 million and is included in other long-term liabilities on its consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

The effect of financial instruments are recorded in other income (expenses), net in the consolidated statements of operations and consisted of the following.

	Three Months Ended March 31,
	2023		2022
Change in fair value of cross-currency derivative instruments	$	5	$	(36)
Foreign currency remeasurement of Sterling Notes to U.S. dollars	(32)		50
Gain (loss) on financial instruments, net	$	(27)	$	14

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Revenue (Notes)

3 Months Ended

Mar. 31, 2023

Revenue [Abstract]

Revenue

Revenues

The Company’s revenues by product line are as follows:

	Three Months Ended March 31,
	2023		2022
Internet	$	5,718	$	5,452
Video	4,254		4,346
Voice	373		391
Mobile service	497		387
Residential revenue	10,842		10,576
Small and medium business	1,091		1,070
Enterprise	682		661
Commercial revenue	1,773		1,731
Advertising sales	355		383
Other	683		508
	$	13,653	$	13,198

As of March 31, 2023 and December 31, 2022, accounts receivable, net on the consolidated balance sheets includes approximately $632 million and $577 million of current equipment installment plan receivables, respectively, and other noncurrent assets includes approximately $352 million and $261 million of noncurrent equipment installment plan receivables, respectively.

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Operating Costs and Expenses (Notes)

3 Months Ended

Mar. 31, 2023

Operating Costs and Expenses [Abstract]

Operating Costs and Expenses

Operating Costs and Expenses

Operating costs and expenses, exclusive of items shown separately in the consolidated statements of operations, consist of the following for the periods presented:

	Three Months Ended March 31,
	2023		2022
Programming	$	2,799	$	2,977
Other costs of revenue	1,328		1,108
Costs to service customers	2,095		1,959
Sales and marketing	946		880
Other expense	1,371		1,234
	$	8,539	$	8,158

Programming costs consist primarily of costs paid to programmers for basic, premium, video on demand and pay-per-view programming. Other costs of revenue include costs directly related to providing Internet, video, voice and mobile services including mobile device costs, payments to franchise and regulatory authorities, payments for sports, local and news content produced by the Company and direct costs associated with selling advertising. Also included in other costs of revenue are content acquisition costs for the Los Angeles Lakers’ basketball games and Los Angeles Dodgers’ baseball games, which are recorded as games are exhibited over the contract period. Costs to service customers include costs related to field operations, network operations and customer operations for the Company’s products, including mobile, sold to non-bulk residential and SMB customers including internal and third-party labor for the non-capitalizable portion of installations, service and repairs, maintenance, bad debt expense, billing and collection, occupancy and vehicle costs. Sales and marketing costs represent the costs of selling and marketing our Internet, video, voice and mobile services to current and potential non-bulk residential and SMB customers, including labor cost. Other expense includes indirect costs associated with the Company’s Spectrum Enterprise, Spectrum Reach and Spectrum Networks businesses, including sales and marketing and bad debt expenses as well as costs associated with selling to and servicing bulk properties. Other expense also includes corporate overhead and stock compensation expense, among others.

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Other Operating Expenses, Net (Notes)	3 Months Ended
	Mar. 31, 2023
Other Income and Expenses [Abstract]
Other Operating Expenses, Net	Other Operating Expenses, NetOther operating expenses, net of $11 million and $3 million for the three months ended March 31, 2023 and 2022, respectively, primarily includes net amounts of litigation settlements and employee termination costs.

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Other Income, Net (Notes)

3 Months Ended

Mar. 31, 2023

Other Income and Expenses [Abstract]

Other Income (Expenses), Net

Other Income (Expenses), Net

Other income (expenses), net consist of the following for the periods presented:

	Three Months Ended March 31,
	2023		2022
Gain (loss) on financial instruments, net (see Note 4)	$	(27)	$	14
Net periodic pension benefits	2		17
Loss on equity investments, net	(79)		(7)
	$	(104)	$	24

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Stock Compensation Plans (Notes)

3 Months Ended

Mar. 31, 2023

Stock Compensation Plans [Abstract]

Stock Compensation Plans

Stock Compensation PlansCharter’s stock incentive plans provide for grants of nonqualified stock options, incentive stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock, restricted stock units and restricted stock.  Directors, officers and other employees of the Company and its subsidiaries, as well as others performing consulting services for the Company, are eligible for grants under the stock incentive plans.

Charter granted the following equity awards for the periods presented.

	Three Months Ended March 31,
	2023	2022
Stock options	4,235,700	1,372,400
Restricted stock units	1,514,400	423,600

Stock options and restricted stock units generally cliff vest three years from the date of grant. Certain stock options and restricted stock units vest based on achievement of stock price hurdles. Stock options generally expire ten years from the grant date and restricted stock units have no voting rights. Restricted stock generally vests one year from the date of grant.

As of March 31, 2023, total unrecognized compensation remaining to be recognized in future periods totaled $643 million for stock options, $0.2 million for restricted stock and $701 million for restricted stock units and the weighted average period over which they are expected to be recognized is two years for stock options, one month for restricted stock and two years for restricted stock units.

The Company recorded stock compensation expense of $208 million and $147 million for the three months ended March 31, 2023 and 2022, respectively, which is included in operating costs and expenses.

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Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Accounts Payable and Accrued Liabilities [Abstract]

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following as of March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022
Accounts payable – trade	$	726	$	914
Deferred revenue	523		511
Accrued liabilities:
Programming costs	1,882		1,914
Labor	947		1,306
Capital expenditures	1,592		1,792
Interest	1,248		1,165
Taxes and regulatory fees	507		512
Operating lease liabilities	257		261
Other	1,374		1,360
	$	9,056	$	9,735

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Long-term Debt Summary

A summary of our debt as of March 31, 2023 and December 31, 2022 is as follows:

	March 31, 2023						December 31, 2022
	Principal Amount		Carrying Value		Fair Value		Principal Amount		Carrying Value		Fair Value
Senior unsecured notes	$	27,250	$	27,159	$	23,638	$	26,650	$	26,567	$	22,426
Senior secured notes and debentures(a)	55,873		56,230		47,636		56,841		57,213		46,905
Credit facilities(b)	14,640		14,583		14,267		13,877		13,823		13,467
	$	97,763	$	97,972	$	85,541	$	97,368	$	97,603	$	82,798

(a)Includes the Company's £625 million fixed-rate British pound sterling denominated notes (the “Sterling Notes”) (remeasured at $771 million and $755 million as of March 31, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates) and the Company's £650 million aggregate principal amount of Sterling Notes (remeasured at $802 million and $786 million as of March 31, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates).

(b)The Company has availability under the Charter Communications Operating, LLC ("Charter Operating") credit facilities of approximately $3.3 billion as of March 31, 2023.

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Accounting for Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2023

Accounting for Derivative Instruments and Hedging Activities [Abstract]

Income Statement Effects of Financial Instruments

The effect of financial instruments are recorded in other income (expenses), net in the consolidated statements of operations and consisted of the following.

	Three Months Ended March 31,
	2023		2022
Change in fair value of cross-currency derivative instruments	$	5	$	(36)
Foreign currency remeasurement of Sterling Notes to U.S. dollars	(32)		50
Gain (loss) on financial instruments, net	$	(27)	$	14

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Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue [Abstract]

Revenue

The Company’s revenues by product line are as follows:

	Three Months Ended March 31,
	2023		2022
Internet	$	5,718	$	5,452
Video	4,254		4,346
Voice	373		391
Mobile service	497		387
Residential revenue	10,842		10,576
Small and medium business	1,091		1,070
Enterprise	682		661
Commercial revenue	1,773		1,731
Advertising sales	355		383
Other	683		508
	$	13,653	$	13,198

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Operating Costs and Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Operating Costs and Expenses [Abstract]

Operating Costs and Expenses

Operating costs and expenses, exclusive of items shown separately in the consolidated statements of operations, consist of the following for the periods presented:

	Three Months Ended March 31,
	2023		2022
Programming	$	2,799	$	2,977
Other costs of revenue	1,328		1,108
Costs to service customers	2,095		1,959
Sales and marketing	946		880
Other expense	1,371		1,234
	$	8,539	$	8,158

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Other Income (Expenses), Net (Tables)

3 Months Ended

Mar. 31, 2023

Other Income and Expenses [Abstract]

Other Income (Expenses), Net

Other income (expenses), net consist of the following for the periods presented:

	Three Months Ended March 31,
	2023		2022
Gain (loss) on financial instruments, net (see Note 4)	$	(27)	$	14
Net periodic pension benefits	2		17
Loss on equity investments, net	(79)		(7)
	$	(104)	$	24

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Stock Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2023

Stock Compensation Plans [Abstract]

Equity Award Grants

Charter granted the following equity awards for the periods presented.

	Three Months Ended March 31,
	2023	2022
Stock options	4,235,700	1,372,400
Restricted stock units	1,514,400	423,600

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Organization and Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2023
Organization and Basis of Presentation [Abstract]
Number of reportable segments	1

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Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Accounts Payable and Accrued Liabilities [Abstract]
Accounts payable – trade	$ 726	$ 914
Deferred revenue	523	511
Accrued liabilities:
Programming costs	1,882	1,914
Labor	947	1,306
Capital expenditures	1,592	1,792
Interest	1,248	1,165
Taxes and regulatory fees	507	512
Operating lease liabilities	257	261
Other	1,374	1,360
Total accounts payable and accrued liabilities	$ 9,056	$ 9,735

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Long-Term Debt (Details) £ in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 31, 2023 GBP (£)	Dec. 31, 2022 USD ($)
Long-term Debt:
Principal Amount	$ 97,763		$ 97,368
Carrying Value	97,972		97,603
Fair Value	85,541		82,798
Senior unsecured notes
Long-term Debt:
Principal Amount	27,250		26,650
Carrying Value	27,159		26,567
Senior unsecured notes | Level 1
Long-term Debt:
Fair Value	23,638		22,426
Senior secured notes and debentures(a)
Long-term Debt:
Principal Amount	55,873		56,841
Carrying Value	56,230		57,213
Senior secured notes and debentures(a) | Level 1
Long-term Debt:
Fair Value	47,636		46,905
Credit facilities(b)
Long-term Debt:
Principal Amount	14,640		13,877
Carrying Value	14,583		13,823
Credit facilities(b) | Level 2
Long-term Debt:
Fair Value	14,267		13,467
CCO Holdings | 7.375% senior unsecured notes due March 1, 2031
Long-term Debt:
Principal Amount	$ 1,100
Stated interest rate (percentage)	7.375%	7.375%
Charter Operating
Long-term Debt:
Availability under credit facilities	$ 3,300
Charter Operating | Term Loan B-1
Long-term Debt:
Principal Amount	$ 2,300
SOFR spread (percentage)	1.75%
Charter Operating | Term Loan B-2
Long-term Debt:
Principal Amount	$ 3,100
SOFR spread (percentage)	1.75%
Charter Operating | Term Loan B-3
Long-term Debt:
Principal Amount	$ 750
SOFR spread (percentage)	2.25%
Time Warner Cable | 5.750% Sterling Senior Notes Due June 2, 2031
Long-term Debt:
Principal Amount	$ 771	£ 625	755
Time Warner Cable | 5.250% Sterling Senior Notes Due July 15, 2042
Long-term Debt:
Principal Amount	$ 802	£ 650	$ 786

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Accounting for Derivative Instruments and Hedging Activities (Details) £ in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2023 GBP (£)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Gain (Loss) On Financial Instruments, Net
Change in fair value of cross-currency derivative instruments	$ 5	$ (36)
Foreign currency remeasurement of Sterling Notes to U.S. dollars	(32)	50
Gain (loss) on financial instruments, net	$ (27)	$ 14
Cross Currency Derivatives
Derivatives:
Notional amount | £			£ 1,275
Level 2 | Cross Currency Derivatives
Derivatives:
Derivative Liability				$ 565	$ 570

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Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Product Information [Line Items]
REVENUES	$ 13,653	$ 13,198
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	2,707		$ 2,869
Other noncurrent assets	4,291		4,259
Equipment installment plan receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net	632		577
Other noncurrent assets	352		$ 261
Internet
Product Information [Line Items]
REVENUES	5,718	5,452
Video
Product Information [Line Items]
REVENUES	4,254	4,346
Voice
Product Information [Line Items]
REVENUES	373	391
Mobile service
Product Information [Line Items]
REVENUES	497	387
Residential revenue
Product Information [Line Items]
REVENUES	10,842	10,576
Small and medium business
Product Information [Line Items]
REVENUES	1,091	1,070
Enterprise
Product Information [Line Items]
REVENUES	682	661
Commercial revenue
Product Information [Line Items]
REVENUES	1,773	1,731
Advertising sales
Product Information [Line Items]
REVENUES	355	383
Other
Product Information [Line Items]
REVENUES	$ 683	$ 508

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Operating Costs and Expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating Costs and Expenses [Abstract]
Programming	$ 2,799	$ 2,977
Other costs of revenue	1,328	1,108
Costs to service customers	2,095	1,959
Sales and marketing	946	880
Other expense	1,371	1,234
Operating costs and expenses (exclusive of items shown separately in the consolidated statements of operations)	$ 8,539	$ 8,158

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Other Operating Expenses, Net (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Other Income and Expenses [Abstract]
Other operating expenses, net	$ 11	$ 3

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Other Income (Expenses), Net (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Other Income and Expenses [Abstract]
Gain (loss) on financial instruments, net (see Note 4)	$ (27)	$ 14
Net periodic pension benefits	2	17
Loss on equity investments, net	(79)	(7)
Other income (expenses), net	$ (104)	$ 24

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Stock Compensation Plans (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stock Compensation Plans:
Stock compensation expense	$ 208.0	$ 147.0
Stock options
Stock Compensation Plans:
Stock options granted in period (shares)	4,235,700	1,372,400
Award vesting period	3 years
Award expiration period	10 years
Unrecognized compensation cost	$ 643.0
Remaining period over which to recognize unrecognized compensation expense	2 years
Restricted stock
Stock Compensation Plans:
Award vesting period	1 year
Unrecognized compensation cost	$ 0.2
Remaining period over which to recognize unrecognized compensation expense	1 month
Restricted stock units
Stock Compensation Plans:
Awards other than stock options granted in period (shares)	1,514,400	423,600
Award vesting period	3 years
Unrecognized compensation cost	$ 701.0
Remaining period over which to recognize unrecognized compensation expense	2 years