Charter 2010 Annual Report Download - page 121

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F- F-PB
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010, 2009, AND 2008
(dollars in millions, except share or per share data or where indicated)
exchanged after which Charter Holdco became 100% owned by Charter. Further, Mr. Allen transferred his preferred equity interest in CC
VIII to Charter. As of December 31, 2010, Mr. Allen held all 2,241,299 shares of Class B common stock of Charter. Pursuant to the terms
of the Certificate of Incorporation of Charter, on January 18, 2011, the Disinterested Members of the Board of Directors of Charter caused a
conversion of the shares of Class B common stock into shares of Class A common stock on a one-for-one basis. As a result of such conversion,
Mr. Allen no longer has the right to appoint four directors and the Class B directors became Class A directors. On January 18, 2011, directors
William L. McGrath and Christopher M. Temple, both former Class B directors, resigned from Charter’s board of directors. Edgar Lee and
Stan Parker were appointed to fill the vacant positions.
 
Commitments
e following table summarizes the Company’s payment obligations as of December 31, 2010 for its contractual obligations.
Total 2011 2012 2013 2014 2015 ereafter
Contractual Obligations
Capital and Operating Lease Obligations (1) $ 89 $ 23 $ 20 $ 16 $ 13 $ 7 $ 10
Programming Minimum Commitments(2) 267 103 108 56 -- -- --
Other (3) 290 235 7 3 1 44 --
Total $ 646 $ 361 $ 135 $ 75 $ 14 $ 51 $ 10
(1) e Company leases certain facilities and equipment under noncancelable operating leases. Leases and rental costs charged to expense for the
year ended December 31, 2010 (Successor), one month ended December 31, 2009 (Successor), eleven months ended November 30, 2009
(Predecessor) and year ended December 31, 2008 (Predecessor), were $24 million, $2 million, $23 million and $24 million, respectively.
(2) e Company pays programming fees under multi-year contracts ranging from three to ten years, typically based on a flat fee per customer, which
may be fixed for the term, or may in some cases escalate over the term. Programming costs included in the accompanying statement of operations
were $1.8 billion, $146 million, $1.6 billion and $1.6 billion, for the year ended December 31, 2010 (Successor), one month ended December
31, 2009 (Successor), eleven months ended November 30, 2009 (Predecessor) and year ended December 31, 2008 (Predecessor), respectively.
Certain of the Company’s programming agreements are based on a flat fee per month or have guaranteed minimum payments. e table sets
forth the aggregate guaranteed minimum commitments under the Company’s programming contracts.
(3) “Other” represents other guaranteed minimum commitments, which consist primarily of commitments to the Company’s billing services vendors.
e following items are not included in the contractual obligation table due to various factors discussed below. However, the Company incurs these
costs as part of its operations:
e Company rents utility poles used in its operations. Generally, pole rentals are cancelable on short notice, but the Company
anticipates that such rentals will recur. Rent expense incurred for pole rental attachments for the year ended December 31, 2010
(Successor), one month ended December 31, 2009 (Successor), eleven months ended November 30, 2009 (Predecessor) and year ended
December 31, 2008 (Predecessor), was $50 million, $4 million, $43 million and $47 million, respectively.
e Company pays franchise fees under multi-year franchise agreements based on a percentage of revenues generated from video service
per year. e Company also pays other franchise related costs, such as public education grants, under multi-year agreements. Franchise
fees and other franchise-related costs included in the accompanying statement of operations were $178 million, $15 million, $161
million and $179 million for the year ended December 31, 2010 (Successor), one month ended December 31, 2009 (Successor), eleven
months ended November 30, 2009 (Predecessor) and year ended December 31, 2008 (Predecessor), respectively.
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