This annual report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”), regarding, among other things, our plans, strategies and prospects, both business and financial including, without limitation, the forward-looking statements set forth in Part I. Item 1. under the heading “Business” and in Part II. Item 7. under the heading "Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations"Operations” in this annual report. Although we believe that our plans, intentions and expectations 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 in Part I. Item 1A. under the heading "Risk Factors"“Risk Factors” and in Part II. Item 7. under the heading, "Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report. Many of the forward-looking statements contained in this annual report may be identified by the use of forward-lookingforward‑looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," "aim," "on“believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” “aim,” “on track," "target," "opportunity"” “target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “initiatives,” “seek,” “would,” “could,” “continue,” “ongoing,” “upside,” “increases” and "potential,"“potential,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this annual report are set forth in this annual report and in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:

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 annual report.

We and our parent company have a significant amount of debt and may (subject to applicable restrictions in our debt instruments) incur additional debt in the future. As of December 31, 2009,2016, our total principal amount of debt was approximately $11.7$60.0 billion. On a consolidated basis, we and our parent company’s total principal

Our significant amount of debt was approximately $13.5 billion as of December 31, 2009.could have consequences, such as:

If current debt amounts increase, our business results are lower than expected, or credit rating agencies downgrade our debt limiting our access to investment grade markets, the related risks that we now face will intensify.

Our credit facilities and the indentures governing our and our parent company’s debt contain a number of significant covenants that could adversely affect our ability to operate our business, our and our parent companies’ liquidity, and our results of operations. These covenants restrict, among other things, our and our parent company’ssubsidiaries’ ability to:

Additionally, the Charter Operating credit facilities require Charter Operating to comply with a maximum total leverage covenant and a maximum first lien leverage covenant. The breach of any covenants or obligations in our indentures or credit facilities, not otherwise waived or amended, could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing our long-term indebtedness. In addition, the secured lenders under our notes and the Charter Operating credit facilities the holders of the Charter Operating senior second-lien notes, and the secured lenders under the CCO Holdings credit facility could foreclose on their collateral, which includes equity interests in our subsidiaries, and exercise other rights of secured creditors.  Any default under those credit facilities or the indentures governing our debt could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our notes and credit facilities, and could force us to seek the protection of the bankruptcy laws.  

In the event of bankruptcy, liquidation, or dissolution of one or more of our subsidiaries, that subsidiary'ssubsidiary’s assets would first be applied to satisfy its own obligations, and following such payments, such subsidiary may not have sufficient assets remaining to make payments to its parent company as an equity holder or otherwise. In that event:event, the lenders under Charter Operating’s credit facilities and notes and under the TWC, LLC and TWCE notes and any other indebtedness of our subsidiaries whose interests are secured by substantially all of our operating assets, and all holders of other debt of Charter Operating TWC, LLC and TWCE will have the right to be paid in full before us from any of our subsidiaries’ assets.

We and our parent companies may not have the ability to raise the funds necessary to fulfill our and our parent company’s obligations under our and its notes and our credit facilities following a change of control. Under the indentures governing our and our parent company’sthe CCO Holdings’ notes, upon the occurrence of specified change of control events, the applicable notedebt issuer is required to offer to repurchase all of its outstanding notes. However, we and our parent company may not have sufficient access to funds at the time of the change of control event to make the required repurchase of the applicable notes, and all of the notes issuers areCharter Operating is limited in theirits ability to make distributions or other payments to their respective parent companyany debt issuer to fund any required repurchase. In addition, a change of con trolcontrol under the Charter Operating credit facilities would result in a default under those credit facilities.facilities, which would trigger a default under the indentures governing the CCO Holdings’ notes, the Charter Operating notes and the TWC, LLC and TWCE notes. Because such credit facilities and our subsidiary’s notes are obligations of our subsidiary,Charter Operating and its subsidiaries, the credit facilities and our subsidiary’s notes would have to be repaid by our subsidiary before theirCharter Operating’s assets could be available to their parent companiesCCO Holdings to repurchase their notes. Any failure to make or complete a change of control offer would place the applicable note issuer or borrowerCCO Holdings in default under its notes. The failure ofOur or our subsidiaries failure to make a change of control offer or repay the amounts accelerated under their or our notes and credit facilities would place them or us in default.default under such agreements.

The industry in which we operate is highly competitive and has become more so in recent years. In some instances, we compete against companies with fewer regulatory burdens, better access to financing, greater personnel resources, greater resources for marketing, greater and more favorable brand name recognition, and long-established relationships with regulatory authorities and customers. Increasing consolidation in the cable industry and the repeal of certain ownership rules have provided additional benefits to certain of our competitors, either through access to financing, resources, or efficiencies of scale.

In order to attract new customers, from time to time we make promotional offers, including offers of temporarily reduced price or free service.  These promotional programs result in significant advertising, programming and operating expenses, and alsoOur services may requirenot allow us to make capital expenditurescompete effectively. Competition may reduce our expected growth of future cash flows which may contribute to acquirefuture impairments of our franchises and install customer premise equipment.  Customers who subscribegoodwill and our ability to our services as a result of these offerings may not remain customers followingmeet cash flow requirements, including debt service requirements. For additional information regarding the end of the promotional period.  A failure to retain customers could have a material adverse effect on our business.competition we face, see “Business —Competition” and “—Regulation and Legislation.”

We are exposed to risks associated with the economic conditions of our current and potential customers, the potential financial instability of our customers many of whom have been adversely affected by theand their financial ability to purchase our products. If there were a general economic downturn.  Dramatic declines in the housing market over the past year, including falling home prices and increasing foreclosures, together with significant increases in unemployment, have severely affected consumer confidence and causeddownturn, we may experience increased delinquencies or cancellations by our customers or lead to unfavorable changes in the mix of products purchased.  The generalpurchased, including an increase in the number of homes that replace their video service with Internet-delivered and/or over-air content, which would negatively impact our ability to attract customers, increase rates and maintain or increase revenue. In addition, providing video services is an established and highly penetrated business. Our ability to gain new video subscribers is dependent to a large extent on growth in occupied housing in our service areas, which is influenced by both national and local economic downturn hasconditions. Weak economic conditions may also affectedhave a negative impact on our advertising sales, as companies seek to reduce expenditures and conserve cash.revenue. These events have adversely affected us in the past, and may continue to adversely affect our cash flow, results of operations and financial condition.condition if a downturn were to occur.

In addition, we are susceptible to risks associated with the potential financial instability of the vendors and third parties on which we rely to provide products and services or to which we outsource certain functions. The same economic conditions that may affect our customers, as well as volatility and disruption in the capital and credit markets, also could adversely affect vendors and third parties and lead to significant increases in prices, reduction in output or the bankruptcy of our vendors or third parties upon which we rely. Any interruption in the services provided by our vendors or by third parties could adversely affect our cash flow, results of operation and financial condition.

ProgrammingVideo programming has been, and is expected to continue to be, our largest operating expense item. In recent years, the cable industry has experienced a rapid escalation in the cost of programming. We expect programming costs to continue to increase and at a higher rate than in 2009, because of a variety of factors including amounts paid for broadcast station retransmission consent, annual increases imposed by programmers and additionalcarriage of incremental programming, including high definitionnew services and OnDemand programming, being provided to customers.VOD programming. The inability to fully pass these programming cost increases on to our customers has had, and is expected in the future to have, an adverse impact on our cash flow and operating margins associated with the video product. We have programming contracts that have expired and others that will expire at

Increased demands by owners of some broadcast stations for carriage of other services or payments to those broadcasters for retransmission consent are likely to further increase our programming costs. Federal law allows commercial television broadcast stations to make an election between “must-carry” rights and an alternative “retransmission-consent” regime. When a station opts for the latter, cable operatorsretransmission consent regime, we are not allowed to carry the station’s signal without the station’s permission. In some cases, we carry stations under short-term arrangements while we attempt to negotiate new long-term retransmission agreements. If negotiations with these programmers prove unsuccessful, they could require us to cease carrying their signals, possibly for an indefinite period. Any loss of stations could make our video service less attractive to customers, which could result in less subscription and advertising revenue. In retransmission-consent negotiations, broadcasters often condition consent with respect to one station on carriage of one or more other stations or programming services in which they or their affiliates have an interest. Carriage of these other services, as well as increased fees for retransmission rights, may increase our programming expenses and diminish the amount of capacity we have available to introduce new services, which could have an adverse effect on our business and financial results.

We operate in a highly competitive, consumer-driven and rapidly changing environment. Our businesssuccess is, characterized by rapid technological changeto a large extent, dependent on our ability to acquire, develop, adopt, upgrade and the introductionexploit new and existing technologies to address consumers’ changing demands and distinguish our services from those of new products and services, some of which are bandwidth-intensive.our competitors. We may not be able to accurately predict technological trends or the success of new products and services. If we choose technologies or equipment that are less effective, cost-efficient or attractive to customers than those chosen by our competitors, if we offer services that fail to appeal to consumers, are not available at competitive prices or that do not function as expected, or we are not able to fund the capital expenditures necessary to keep pace with technological developments, or anticipate the demandour competitive position could deteriorate, and our business and financial results could suffer.

The ability of some of our customers forcompetitors to introduce new technologies, products and services requiring newmore quickly than we do may adversely affect our competitive position. Furthermore, advances in technology, decreases in the cost of existing technologies or bandwidth.changes in competitors’ product and service offerings may require us in the future to make additional research and development expenditures or to offer at no additional charge or at a lower price certain products and services that we currently offer to customers separately or at a premium. In addition, the uncertainty of our ability, and the costs, to obtain intellectual property rights from third parties could impact our ability to respond to technological advances in a timely and effective manner.

The implementation of our network-based user interface, Spectrum Guide may ultimately be unsuccessful or more expensive than anticipated. Our inability to maintain and expand our upgraded systems and provide advanced services such as a state of the art user interface in a timely manner, or to anticipate the demands of the marketplace, could materially adversely affect our ability to attract and retain customers. Consequently, our growth, financial condition and results of operations could suffer materially.

We depend on a limited number of third party service providers, suppliers and licensors to supply some of the services, hardware, software and operational support necessary to provide some of our services.  We obtain these materials from a limited number of vendors, some of which do not have a long operating history or which may not be able to continue to supply the equipment and services we desire. Some of our hardware, software and operational support vendors, and service providers represent our sole source of supply or have, either through contract or as a result of intellectual property rights, a position of some exclusivity. If any of these parties breaches or terminates its agreement with us or otherwise fails to perform its obligations in a timely manner, demand exceeds these vendors’ capacity, or if these vendorsthey experience operating or financial difficulties, they significantly increase the amount we pay for necessary products or services, or they cease production of any necessary product due to lack of demand, profitability or a change in ownership or are otherwise unable to provide the equipment or services we need in a timely manner, at our specifications and at reasonable prices, our ability to provide some services might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might delay our ability to serve our customers. These events could materially and adversely affect our ability to retain and attract customers, and haveIn addition, the existence of only a material negative impact on our operations, business, financial results and financial condition.  A limited number of vendors of key technologies can lead to less product innovation and higher costs. For these reasons,These events could materially and adversely affect our ability to retain and attract customers and our operations, business, financial results and financial condition.

Our cable systems have historically been restricted to using one of two proprietary conditional access security systems, which we generally endeavorbelieve has limited the number of manufacturers producing set-top boxes for such systems. As an alternative, we developed a new conditional access security system which can be downloaded into set-top boxes with features we specify that could be provided by a variety of manufacturers. We refer to our specified set-top box as our Worldbox. Additionally, we are developing technology to allow our two current proprietary conditional access security systems to be software downloadable into our Worldbox. In order to realize the broadest benefits of our Worldbox technology, we must now complete the support for the downloadable proprietary conditional access security systems within the Worldbox. We cannot provide assurances that this implementation will ultimately be successful or completed in the expected timeframe or at the expected budget.

We rely on patent, copyright, trademark and trade secret laws and licenses and other agreements with our employees, customers, suppliers and other parties to establish alternative vendors for materialsand maintain our intellectual property rights in technology and the products and services used in our operations. Also, because of the rapid pace of technological change, we consider critical, butboth develop our own technologies, products and services and rely on technologies developed or licensed by third parties. However, any of our intellectual property rights could be challenged or invalidated, or such intellectual property rights may not be sufficient to permit us to take advantage of current industry trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product or service offerings or other competitive harm. We may not be able to establishobtain or continue to obtain licenses from these relationshipsthird parties on reasonable terms, if at all. In addition, claims of intellectual property infringement could require us to enter into royalty or licensing agreements on unfavorable terms, incur substantial monetary liability or be ableenjoined preliminarily or permanently from further use of the intellectual property in question, which could require us to obtain required materials on favorable terms.

Our high-speed Internet customers utilizeNetwork and information systems technologies are critical to our network to access the Internet and, as a consequence, we or they may become victim to common malicious and abusive Internetoperating activities, both for our internal uses, such as peer-to-peer file sharing, unsolicited mass advertising (i.e., “spam”)network management and supplying services to our customers, including customer service operations and programming delivery. Network or information system shutdowns or other service disruptions caused by events such as computer hacking, dissemination of computer viruses, worms and other destructive or disruptive software.  These activitiessoftware, “cyber attacks,” process breakdowns, denial of service attacks and other malicious activity pose increasing risks. Both unsuccessful and successful “cyber attacks” on companies have continued to increase in frequency, scope and potential harm in recent years. While we develop and maintain systems seeking to prevent systems-related events and security breaches from occurring, the development and maintenance of these systems is costly and requires

Any of these events, if directed at, or experienced by, us or technologies upon which we depend, could have adverse consequences on our network, our customers and our customers,business, including degradation of service, service disruption, excessive call volume to call centers, and damage to our or our customers'customers’ equipment and data. Significant incidentsLarge expenditures may be necessary to repair or replace damaged property, networks or information systems or to protect them from similar events in the future. Moreover, the amount and scope of insurance that we maintain against losses resulting from any such events or security breaches may not be sufficient to cover our losses or otherwise adequately compensate us for any disruptions to our business that may result. Any such significant service disruption could leadresult in damage to our reputation and credibility, customer dissatisfaction and ultimately a loss of customers or revenue, in addition to increased costs to service our customers and protect our network.revenue. Any significant loss of high-speed Internet customers or revenue, or significant increase in costs of serving those customers, could adversely affect our growth, financial condition and results of operations.

As of December 31, 2009, Charter had approximately $6.3$11.2 billion of federal tax net operating losses,loss carryforwards resulting in a gross deferred tax asset of approximately $2.2$3.9 billion expiring in the years 2014 through 2028.as of December 31, 2016. These losses resulted from the operations of Charter HoldcoCommunications Holdings Company, LLC ("Charter Holdco") and its subsidiaries.subsidiaries and from loss carryforwards received as a result of the TWC Transaction. Federal tax net operating loss carryforwards expire in the years 2018 through 2035. In addition, as of December 31, 2009, Charter had state tax net operating losses,loss carryforwards resulting in a gross deferred tax asset (net of federal tax benefit) of approximately $209$304 million generally expiring in years 2010 through 2028.  Due to uncertainties in projected future taxable income, valuation allowances have been established against the gross deferred tax assets for book accounting purposes, except for deferred benefits available to offset certain deferred tax liabilities.  Suchas of December 31, 2016. State tax net operating losses can accu mulate and be used to offset our future taxable income.  The consummation ofloss carryforwards generally expire in the Plan generated anyears 2017 through 2035.

In the past, Charter has experienced “ownership change”changes” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an “ownership change” occurs whenever the percentage of the stock of a corporation owned, directly or indirectly, by “5-percent stockholders” (within the meaning of Section 382 of the Code) increases by more than 50 percentage points over the lowest percentage of the stock of such corporation owned, directly or indirectly, by such “5-percent stockholders” at any time over the preceding three years. As a result, Charter is subject to an annual limitation on the use of its net operating losses.  Further, Charter’s net operating loss carryforwards have been reduced bywhich existed at November 30, 2009 for the amount offirst “ownership change,” those that existed at May 1, 2013 for the cancellation of debt income resulting fromsecond “ownership change,” and those created at May 18, 2016 for the Plan that was allocable to Charter.third “ownership change.” The limitation on Charter’sCharter's ability to use its net operating losses,loss carryforwards, in conjunction with the net operating loss carryforward expiration provisions, could reduce Charter’sCharter's ability to use a portion of its net operating lossesloss carryforwards to offset future taxable income, which could result in Charter being required to make material cash tax payments. Charter’sCharter's ability to make such income tax payments, if any, will depend at such time on Charter’sits liquidity

or Charter& #8217;sits ability to raise additional capital, and/or on receipt of payments or distributions from Charter Holdco and its subsidiaries, including us.

If Charter were to experience a secondadditional ownership changechanges in the future Charter’s(as a result of purchases and sales of stock by its “5-percent stockholders,” new issuances or redemptions of our stock, certain acquisitions of its stock and issuances, redemptions, sales or other dispositions or acquisitions of interests in its “5-percent stockholders”), Charter's ability to use its net operating lossesloss carryforwards could become subject to further limitations.  In accordance

As part of Legacy TWC’s separation from Time Warner Inc. (“Time Warner”) in March 2009 (the “Separation”), Time Warner received a private letter ruling from the IRS and Time Warner and TWC received opinions of tax counsel confirming that the transactions undertaken in connection with the Plan, Charter’sSeparation, including the transfer by a subsidiary of Time Warner of its 12.43% non-voting common stock isinterest in TW NY to TWC in exchange for 80 million newly issued shares of Legacy TWC’s Class A common stock, Legacy TWC’s payment of a special cash dividend to holders of Legacy TWC’s outstanding Class A and Class B common stock, the conversion of each share of Legacy TWC’s outstanding Class A and Class B common stock into one share of Legacy TWC common stock, and the pro-rata dividend of all shares of Legacy TWC common stock held by Time Warner to holders of record of Time Warner’s common stock (the “Distribution” and, together with all of the transactions, the “Separation Transactions”), should generally qualify as tax-free to Time Warner and its stockholders for U.S. federal income tax purposes. The ruling and opinions rely on certain facts, assumptions, representations and undertakings from Time Warner and Legacy TWC regarding the past and future conduct of the companies’ businesses and other matters. If any of these facts, assumptions, representations or undertakings are incorrect or not otherwise satisfied, Time Warner and its stockholders may not be able to rely on the ruling or the opinions and could be subject to certain transfer restrictions contained in our amendedsignificant tax liabilities. Notwithstanding the private letter ruling and restated certificateopinions, the IRS could determine on audit that the Separation Transactions should be treated as taxable transactions if it determines that any of incorporation.  These restrictions, which are designed to minimize the likelihood of an ownership change occurring and thereby preserve Charter’s ability to utilize its net operating losses,these facts, assumptions, representations or undertakings are not currently operative but could become operativecorrect or have been violated, or for other reasons, including as a result of significant changes in the futurestock ownership of Time Warner or Legacy TWC after the Distribution.

Under the tax sharing agreement among Time Warner and Legacy TWC, Legacy TWC generally would be required to indemnify Time Warner against its taxes resulting from the failure of any of the Separation Transactions to qualify as tax-free as a result of (i) certain actions or failures to act by Legacy TWC or (ii) the failure of certain representations made by Legacy TWC to be true. In addition, even if certain events occur andLegacy TWC bears no contractual responsibility for taxes related to a failure of the restrictions are imposed by Charter’s boardSeparation Transactions to qualify for their intended tax treatment, Treasury regulation section 1.1502-6 imposes on Legacy TWC several liability for all Time Warner federal income tax obligations relating to the period during which Legacy TWC was a member of directors.  However, there can be no assurance that Charter’s boardthe Time Warner federal consolidated tax group, including the date of directors would choosethe Separation Transactions. Similar provisions may apply under foreign, state or local law. Absent Legacy TWC causing the Separation Transactions to impose these restrictions or that s uch restrictions, if imposed, would prevent an ownership changenot qualify as tax-free, Time Warner has indemnified Legacy TWC against such several liability arising from occurring.a failure of the Separation Transactions to qualify for their intended tax treatment.

Our operational results during the recent prolonged economic downturn and our bankruptcy have depended, and our future results will depend, upon the retention and continued performance of our management team. Our former President and Chief Executive Officer, Neil Smit, resigned effective February 28, 2010 and our Chief Operating Officer, Michael J. Lovett, assumed the additional title of Interim President and Chief Executive Officer at that time.  Our parent companies’ ability to retain and hire new key employees for management positions could be impacted adversely by the competitive environment for management talent in the telecommunicationsbroadband communications industry. The loss of the services of key members of management and the inability to hireor delay in hiring new key employees could adversely affect our ability to manage our business and our future operational and financial results.

Liberty Broadband currently owns a significant amount of Charter Class A common stock and is entitled to certain governance rights with respect to Charter and us. A/N currently owns Charter Class A common stock and a significant amount of membership interests in our parent company, Charter Holdings, that are convertible into our Charter Class A common stock and is entitled to certain governance rights with respect to Charter. Members of the Charter board of directors include directors who are also officers and directors of Liberty Broadband and directors who are current or former officers and directors of A/N. Dr. John Malone is the Chairman of Liberty Broadband, and Mr. Greg Maffei is the president and chief executive officer of Liberty Broadband. Steven Miron is the Chief Executive Officer of A/N and Michael Newhouse is an officer or director of several of A/N’s affiliates. As of December 31, 2009, Mr. Allen2016, Liberty Broadband beneficially held approximately approximately 19% of Charter’s Class A common stock (including shares owned by Liberty Interactive over which Liberty Broadband holds an irrevocable voting proxy) and A/N beneficially held approximately 40%approximately 13% of Charter’s Class A common stock, in each case assuming the conversion of the membership interests held by A/N. Pursuant to the stockholders agreement between Liberty Broadband, A/N and Charter, Liberty Broadband currently has the right to designate up to three directors as nominees for Charter’s board of directors and A/N currently has the right to designate up to two directors as nominees for Charter’s board of directors with one designated director to be appointed to each of the audit committee, the nominating and corporate governance committee, the compensation and benefits committee and the Finance Committee, in each case provided that each maintains certain specified voting or equity ownership thresholds and each nominee meets certain applicable requirements or qualifications.

In connection with the TWC Transaction, Liberty Broadband and Liberty Interactive entered into a proxy and right of first refusal agreement, pursuant to which Liberty Interactive granted Liberty Broadband an irrevocable proxy to vote all Charter Class A common stock owned beneficially or of record by Liberty Interactive, with certain exceptions. In addition, at the closing of the Bright House Transaction, A/N and Liberty Broadband entered into a proxy agreement pursuant to which A/N granted to Liberty Broadband a 5-year irrevocable proxy (which we refer to as the “A/N proxy”) to vote, subject to certain exceptions, that number of shares of New Charter Class A common stock and New Charter Class B common stock, in each case held by A/N (such shares are referred to as the “proxy shares”), that will result in Liberty Broadband having voting power in Charter equal to 25.01% of the outstanding voting power of Charter, provided, that the voting power of the capital stockproxy shares is capped at 7.0% of Charter, and he has the right to elect fouroutstanding voting power of Charter’s eleven board members.  Mr. Allen thus has the ability to influence fundamental corporate transactions requiring equity holder approval, including, but not limitedCharter. Therefore, giving effect to the election of Charter’s directors, approval of merger transactions involving CharterLiberty Interactive proxy and the saleA/N proxy and the voting cap contained in the stockholders agreement, Liberty Broadband has 25.01% of all or substantially allthe outstanding voting power in Charter. The stockholders agreement and Charter’s amended and restated certificate of Charter’s assets.  Charter’s other principal stockholders have appointed membersincorporation fixes the size of the board at 13 directors. Liberty Broadband and A/N are required to Charter’s boardvote (subject to the applicable voting cap) their respective shares of directors in accordance with the Plan, including Messrs. Zinterhofer and Glatt, who are employees of Apollo Management, L.P., and Mr. Karsh, who was appointed by Oaktree Opportunities Investments, L.P. and is the president of Oaktree Capital Management, L.P.  Funds affiliated with AP Charter Holdings, L.P. beneficially hold approximately 31% of the Class A common stock ofand Charter representing approximately 20%Class B common stock for the director nominees nominated by the nominating and corporate governance committee of the vote.  Oaktree Opportunities Investments, L.P.board of directors, including the respective designees of Liberty Broadband and certain affiliated funds beneficially hold approximately 18%A/N, and against any other nominees, except that, with respect to the unaffiliated directors, Liberty Broadband and A/N must instead vote in the same proportion as the voting securities are voted by stockholders other than A/N and Liberty Broadband or any group which includes any of them are voted, if doing so would cause a different outcome with respect to the Class A common stockunaffiliated directors. As a result of their rights under the stockholders agreement and their significant equity and voting stakes in Charter, representing approximately 11%Liberty Broadband and/or A/N, who may have interests different from those of the vote. Funds advised by Franklin Advisers, Inc. beneficially hold approximately 19% of the Class A common stock of Charter representing approximately 12% of the vote.  Charter’s principalother stockholders, maywill be able to exercise substantial influence over allcertain matters requiring stockholder approval,relating to the governance of Charter and us, including the election of directors and approval of significant corporate action,actions, such as mergers and other business combination transactions should these stockholders retain a significant ownership interest in us.transactions.

Regulation of the cable industry has increased cable operators'operators’ operational and administrative expenses and limited their revenues. Cable operators are subject to among other things:various laws and regulations including those covering the following:

Additionally, many aspectsLegislators and regulators at all levels of government frequently consider changing, and sometimes do change, existing statutes, rules, regulations, or interpretations thereof, or prescribe new ones. Any future legislative, judicial, regulatory or administrative actions may increase our costs or impose additional restrictions on our businesses. For example, with respect to our retail broadband Internet access service, the FCC has (1) reclassified the service as a Title II service, (2) applied certain existing Title II provisions and associated regulations to it, (3) forborne from applying a range of other existing Title II provisions and associated regulations, but to varying degrees indicated that this forbearance may be only temporary, and (4) issued new rules expanding disclosure requirements and prohibiting blocking, throttling, paid prioritization, and unreasonable interference with the ability of end users and edge providers to reach each other. The order also subjected broadband providers’ Internet traffic exchange rates and practices to potential FCC oversight for the first time and created a mechanism for third parties to file complaints regarding these matters. These FCC actions were upheld on appeal in June 2016, although additional appeals remain pending.

There are also ongoing efforts to amend or expand the federal, state, and local regulation of some of the services offered over our cable systems, which may compound the regulatory risks we already face,face. For example, the FCC recently issued a proposal to impose new regulations on our point to point transport service as well as other commercial data services (“business data services”). As a result, the FCC may price regulate business data services as common carriage services and proposalsimpose additional restrictions on contracting terms. The FCC also has considered adopting new navigation device rules, pursuant to Section 629 of the Communications Act, which directs the FCC to assure the availability of navigation devices (such as set-top boxes) from third party providers. In 2016, the FCC proposed burdensome new rules that mightwould have required us to make it easierdisaggregated “information flows” available to set-top boxes and apps supplied by third parties. That proposal has not been adopted, but various parties may continue to advocate alternative regulatory approaches to reduce consumer dependency on traditional operator provided set-top boxes. The FCC also is considering the appropriate regulatory framework for our employees to unionize.  Certain states and localities areVoIP service, including whether that service should be regulated under Title II.

Congress is considering new cable and telecommunications taxeslegislation that could increase costs on the company, including (1) the adoption of new data security and cybersecurity legislation that could result in additional network and information security requirements for our business, (2) a change in corporate tax laws that could eliminate some of our current deductions, and (3) broadband subsidies to rural areas that could result in subsidized overbuilding of our more rural facilities.

It remains uncertain what rule changes, if any, will ultimately be adopted by Congress and the FCC and what operating expenses.or financial impact any such rules might have on us, including on our programming agreements, customer privacy and the user experience. In addition, the FCC’s Enforcement Bureau has been actively investigating certain industry practices of various companies and imposing forfeitures for alleged regulatory violations.

Our cable systems generally operate pursuant to franchises, permits, and similar authorizations issued by a state or local governmental authority controlling the public rights-of-way. Many franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises are terminable if the franchisee fails to comply with significant provisions set forth in the franchise agreement governing system operations. Franchises are generally granted for fixed terms and must be periodically renewed. Franchising authorities may resist granting a renewal if either past performance or the prospective operating proposal is considered inadequate. Franchise authorities often demand concessio nsconcessions or other commitments as a condition to renewal. In some instances, local franchises have not been renewed at expiration, and we have operated and are operating under either temporary operating agreements or without a franchise while negotiating renewal terms with the local franchising authorities.

Our cable system franchises are non-exclusive. Consequently, local and state franchising authorities can grant additional franchises to competitors in the same geographic area or operate their own cable systems. In some cases, local government entities and municipal utilities may legally compete with us without obtaining a franchise fromon more favorable terms. Potential competitors (like Google) have recently pursued and obtained local franchises that are more favorable than the local franchising authority.  In addition, certain telephone companies are seeking authority to operate in communities without first obtaining a localincumbent operator’s franchise.  As a result, competing operators may build systems in areas in which we hold franchises.

In a series of recent rulemakings, theThe FCC has adopted new rules that streamline entry for new competitors (particularly those affiliated with telephone companies) and reduce franchising burdens for these new entrants. At the same time, a substantial number of states recently have adopted new franchising laws.  Again, these new laws, were principally designed to streamline entry for new competitors, and they often provide advantages for these new entrants that are not immediately available to existing operators.  As

Broadband delivery of video content is not necessarily subject to the same franchising obligations applicable to our traditional cable systems. The FCC administers a resultprogram that collects Universal Service Fund contributions from telecommunications service providers and uses them to subsidize the provision of these new franchising lawstelecommunications services in high-cost areas and regulations, we have seen an increaseto low-income consumers and the provision of Internet and telecommunications services to schools, libraries and certain health care providers. A variety of regulatory changes may lead the FCC to expand the collection of Universal Service Fund contributions to encompass Internet service providers. The FCC already has begun to redirect the expenditure of some Universal Service Fund subsidies to broadband deployment in the number of competitive cable franchises or operating certificates being issued, and we anticipateways that trend to continue.could assist competitors.

In addition to the franchise agreement, cable authorities in some jurisdictions have adopted cable regulatory ordinances that further regulate the operation of cable systems. This additional regulation increases the cost of operating our business. Local franchising authorities may impose new and more restrictive requirements. Local franchising authorities who are certified to regulate rates in the communities where they operate generally have the power to reduce rates and order refunds on the rates charged for basic service and equipment.

Currently, rate regulation of cable systems is strictly limited to the basic service tier and associated equipment and installation activities.activities, and the FCC recently revised its rules, in response to changed market conditions, to make it more difficult for local franchising authorities to assert rate regulation authority. However, the FCC and Congress continue to be concerned that cable rate increases are exceeding inflation. It is possible that either the FCC or Congress will further restrict the ability of cable system operators to implement rate increases.increases for our video services or even for our Internet and voice services. Should this occur, it would impede our ability to raise our rates. If we are unable to raise our rates in response to increasing costs, our lossesfinancial results would increase.be adversely impacted.

There has been legislative and regulatory interest in requiring companies that own multiple cable networks to make each of them available on a standalone, rather than a bundled basis to cable operators, and in requiring cable operators to offer historically combinedbundled programming services on an á la carte basis.  It is possible thatbasis to consumers. While any new marketing restrictionsregulation or legislation designed to enable cable operators to purchase programming on a standalone basis could be adopted in the future. Such restrictionsbeneficial to us, any regulation or legislation that limits how we sell programming could adversely affect our operations.business.

Cable operators also face significant regulation of their video channel carriage. We can be required to devote substantial capacity to the carriage of programming that we might not carry voluntarily, including certain local broadcast signals; local public, educational and governmentgovernmental access (“PEG”) programming; and unaffiliated, commercial leased access programming (required channel capacity for use by persons unaffiliated with the cable operator who desire to distribute programming over a cable system). The FCC adopted a plan in 2007 addressing the cable industry’s broadcast carriage obligations once the broadcast industry migration from analog to digital transmission is completed, which occurred in June 2009.  Under the FCC’s plan, most cable systems are required to offer both an analog and digital version of local broadcast signals for three years after the June 12, 2009 digital transition date.  This burden could increas e further if we are required to carry multiple programming streams included within a single digital broadcast transmission (multicast carriage) or if our broadcast carriage obligations are otherwise expanded.  The FCC also adopted newrevised commercial leased access rules which would dramatically reduce the rate we can charge for leasing this capacity and dramatically increase our associated administrative burdens.  Theseburdens, but these remain stayed while under appeal. Legislation has been introduced in Congress in the past that, if adopted, could impact our carriage of broadcast signals by eliminating the cable industry’s compulsory copyright license. The FCC also continues to consider changes to the rules affecting the relationship between programmers (including broadcasters) and multichannel video distributors, including potential loosening of media ownership rules. Future regulatory changes could disrupt existing programming commitments, interfere with our preferred use of limited channel capacity, increase our programming costs, and limit our ability to offer services that would maximize our revenue potential. It is possible that other legal restraints will be adopted limiting our discretion over programming decisions.

We offer voice communications services over our broadband network and continue to develop and deployusing VoIP services. The FCC has ruled that competitive telephone companies that support VoIP services, such as those we offer our customers, are entitled to interconnect with incumbent

providers of traditional telecommunications services, which ensures that our VoIP services can compete in the market. The scope of these interconnection rights are being reviewed in a current FCC proceeding, which may affect our ability to compete in the provision of voice services or result in additional costs. The FCC has also declared that certain VoIP services are not subject to traditional state public utility regulation. The full extent of the FCC preemption of state and local regulation of VoIP services is not yet clear. Expanding our offering of these services may require usclear, and at least one state (Minnesota) has asserted jurisdiction over the company’s VoIP services. We have filed a legal challenge to obtain certain authorizations, includingthat jurisdictional assertion, which is now pending before a federal and state licenses.  We may not be able to obtain such authorizationsdistrict court in a timely manner, or conditions could be imposed upon such licenses or authorizations that may not be favorable to us.  The FCC has extended certain traditional telecommunications requirements, such as E911, Universal Service fund collection, CALEA, Customer Proprietary Network Information and telephone relay requirements to many VoIP providers such as us.Minnesota. Telecommunications companies generally are subject to other significant regulation which could also be extended to VoIP providers. The FCC has already extended certain traditional telecommunications carrier requirements to many VoIP providers such as us. If additional telecommunications regulations are applied to our VoIP service, it could cause us to incur additional costs.

None.

Our principal physical assets consist of cable distribution plant and equipment, including signal receiving, encoding and decoding devices, headend reception facilities, distribution systems, and customer premise equipment for each of our cable systems.

Our cable plant and related equipment are generally attached to utility poles under pole rental agreements with local public utilities and telephone companies, and in certain locations are buried in underground ducts or trenches. We own or lease real property for signal reception sites, and own most of our service vehicles.

Our subsidiaries generally lease space for business offices throughout our operating divisions.offices. Our headend and tower locations are located on owned or leased parcels of land, and we generally own the towers on which our equipment is located. Charter Holdco owns the land and buildingWe lease space for our principal executive office.corporate headquarters in Stamford, Connecticut.

The physical components of our cable systems require maintenance as well as periodic upgrades to support the new services and products we introduce. See “Item 1. Business – Our Network Technology.” We believe that our properties are generally in good operating condition and are suitable for our business operations.

None.

 

For information regarding securities issued under Charter’sCharter's equity compensation plans, see Note 1815 to our accompanying consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data.”

Reference is made to “Part I. Item 1A. Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” which describe important factors that could cause actual results to differ from expectations and non-historical information contained herein. In addition, the following discussion should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto of CCO Holdings, LLC and subsidiaries included in “Item“Part II. Item 8. Financial Statements and Supplementary Data.”

Approximately 88%90%, 91% and 86%90% of our revenues for the years ended December 31, 20092016, 2015 and 2008,2014, respectively, are attributable to monthly subscription fees charged to customers for our video, high-speed Internet, telephone,voice and commercial services provided by our cable systems. Generally, these customer subscriptions may be discontinued by the customer at any time.time subject to a fee for certain commercial customers. The remaining 12%10%, 9% and 14%10% of revenue for fiscal years 20092016, 2015 and 2008,2014, respectively, is derived primarily from advertising revenues, franchise and other regulatory fee revenues (which are collected by us but then

paid to local franchising authorities), pay-per-view and OnDemandVOD programming, installation, processing fees or reconnection fees charged to customers to commence or reinstate service, and commissions related to the sale of merchandise by home shopping services.

We believe thatincurred the weakened economic conditionsfollowing transition costs in connection with the United States, including a continued downturn in the housing market over the past year and increases in unemployment, and continued competition have adversely affected consumer demand for our services, especially premium services, and have contributed to an increase in the number of homes that replace their traditional telephone service with wireless service thereby impacting the growth of our telephone business and also had a negative impact on our advertising revenue.  These conditions have affected our net customer additions and revenue growth during 2009.  If these conditions do not improve, we believe the growth of our business and results of operations will be further adversely affected which may contribute to future impairments of our franchises and goodwill.Transactions (in millions).

Certain of our accounting policies require our management to make difficult, subjective and/or complex judgments. Management has discussed these policies with the Audit Committee of Charter’s board of directors, and the Audit Committee has reviewed the following disclosure. We consider the following policies to be the most critical in understanding the estimates, assumptions and judgments that are involved in preparing our financial statements, and the uncertainties that could affect our results of operations, financial condition and cash flows:

In addition, there are other items within our financial statements that require estimates or judgment that are not deemed critical, such as the allowance for doubtful accounts and valuations of our derivativefinancial instruments, if any, but changes in estimates or judgment in these other items could also have a material impact on our financial statements.

We make judgments regarding the installation and construction activities to be capitalized. We capitalize direct labor and overhead using standards developed from actual costs and applicable operational data. We calculate standards annually (or more frequently if circumstances dictate) for items such as the labor rates, overhead rates, and the actual amount of time required to perform a capitalizable activity. For example, the standard amounts of time required to perform capitalizable activities are based on studies of the time required to perform such activities. Overhead rates are established based on an analysis of the nature of costs incurred in support of capitalizable activities, and a determination of the portion of costs that is directly attributable to capitalizable activities. The impact of changes that resulted from these studies were not material in the periods presented.

Labor costs directly associated with capital projects are capitalized. Capitalizable activities performed in connection with customer installations include such activities as:

Judgment is required to determine the extent to which overhead costs incurred result from specific capital activities, and therefore should be capitalized. The primary costs that are included in the determination of the overhead rate are (i) employee benefits and payroll taxes associated with capitalized direct labor, (ii) direct variable costs associated with capitalizable activities, consisting primarily of installation and construction vehicle costs, (iii) the cost of support personnel, such as care personnel and dispatchers, who directly assist with capitalizable installation activities, and (iv) indirect costs directly attributable to capitalizable activities.

Valuation and impairment of property, plant and equipment. Impairment.  We evaluate the recoverability of our property, plant and equipment upon the occurrence of events or changes in circumstances indicating that the carrying amount of an asset may not be recoverable. Such events or changes in circumstances could include such factors as the impairment of our indefinite-lifeindefinite life franchises, changes in technological advances, fluctuations in the fair value of such assets, adverse changes in relationships with local franchise authorities, adverse changes in market conditions, or a deterioration of current or expected future operating results. A long-lived asset is deemed impaired when the carrying amount of the asset exceeds the projected undiscounted future cash flows associated with the asset. No impairments of long-lived assets to be held and used were recorded in the years ended December 31, 2009, 20082016, 2015 and 2007.  However, approximately $56 million of impairment on assets held for sale were recorded for the year ended December 31, 2007.2014.