Charter 2012 Annual Report Download - page 100

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2012, 2011 AND 2010
(dollars in millions, except share or per share data or where indicated)
F- 25
13. Operating Costs and Expenses
Operating costs and expenses consist of the following for the years presented:
Year Ended December 31,
2012 2011 2010
Programming $ 1,979 $ 1,872 $ 1,815
Franchise, regulatory and connectivity 369 359 367
Costs to service customers 1,363 1,268 1,262
Marketing 422 387 396
Other 727 678 646
$ 4,860 $ 4,564 $ 4,486
Programming costs consist primarily of costs paid to programmers for basic, premium, digital, OnDemand, and pay-per-view
programming. Franchise, regulatory and connectivity costs represent payments to franchise and regulatory authorities and costs
directly related to providing Internet and telephone services. Costs to service customers include costs related to field operations,
network operations and customer care including labor, reconnects, maintenance, billing, occupancy and vehicle costs. Marketing
costs represents the costs of marketing to our current and potential commercial and residential customers including labor costs.
Other includes bad debt and collections expense, corporate overhead, commercial and advertising sales expenses, property tax
and insurance and stock compensation expense, among others.
14. Other Operating Expenses, Net
Other operating expenses, net consist of the following for the years presented:
Year Ended December 31,
2012 2011 2010
(Gain)/loss on sale of assets, net $ (5) $ (4) $ 9
Special charges, net 20 11 16
$ 15 $ 7 $ 25
(Gain)/loss on sale of assets, net
(Gain)/loss on sale of assets represents the gain or loss recognized on the sales of fixed assets and cable systems.
Special charges, net
Special charges, net for the years ended December 31, 2012, 2011 and 2010 primarily includes severance charges as well as net
amounts of litigation settlements.
15. Stock Compensation Plans
Charter’s 2009 Stock Incentive Plan provides 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 2009 Stock Incentive Plan. The 2009 Stock Incentive Plan
allows for the issuance of up to 8 million shares of Charter Class A common stock (or units convertible into Charter Class A
common stock).