Charter 2011 Annual Report Download - page 121

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011, 2010 AND 2009
(dollars in millions, except share or per share data or where indicated)
F- 37
21. Commitments and Contingencies
Commitments
The following table summarizes the Company’s payment obligations as of December 31, 2011 (Successor) for its contractual
obligations.
Contractual Obligations
Capital and Operating Lease Obligations (1)
Programming Minimum Commitments (2)
Other (3)
Total
Total
$ 100
223
386
$ 709
2012
$ 33
167
227
$ 427
2013
$ 25
56
62
$ 143
2014
$ 18
—
61
$ 79
2015
$ 10
—
35
$ 45
2016
$ 6
—
1
$ 7
Thereafter
$ 8
—
—
$ 8
(1) The Company leases certain facilities and equipment under noncancelable operating leases. Leases and rental costs charged
to expense for the years ended December 31, 2011 and 2010 (Successor), one month ended December 31, 2009 (Successor)
and eleven months ended November 30, 2009 (Predecessor), were $26 million, $26 million, $2 million and $25 million,
respectively.
(2) The 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 $1.9 billion, $1.8 billion, $146 million and $1.6 billion, for the years ended
December 31, 2011 and 2010 (Successor), one month ended December 31, 2009 (Successor), eleven months ended November
30, 2009 (Predecessor), respectively. Certain of the Company’s programming agreements are based on a flat fee per month
or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under the
Company’s programming contracts.
(3) “Other” represents other guaranteed minimum commitments, which consist primarily of commitments to the Company’s
billing services vendors.
The 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:
• The 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 years ended
December 31, 2011 and 2010 (Successor), one month ended December 31, 2009 (Successor) and eleven months ended
November 30, 2009 (Predecessor), was $49 million, $50 million, $4 million, and $43 million, respectively.
• The Company pays franchise fees under multi-year franchise agreements based on a percentage of revenues generated
from video service per year. The 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 $174 million, $178 million, $15 million and $161 million for the years ended December 31, 2011 and
2010 (Successor), one month ended December 31, 2009 (Successor) and eleven months ended November 30, 2009
(Predecessor), respectively.
• The Company also has $64 million in letters of credit, primarily to its various worker’s compensation, property and
casualty, and general liability carriers, as collateral for reimbursement of claims.
Litigation
On August 28, 2008, a lawsuit was filed against Charter and Charter Communications, LLC (“Charter LLC”) in the United States
District Court for the Western District of Wisconsin (entitled, Marc Goodell et al. v. Charter Communications, LLC and Charter