Charter Holdings convertible preferred units

  
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)(dollars in millions, except per share amounts and where indicated)  
Stock options and restricted stock units generally cliff vest three years from the date of grant. 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, 2022, total unrecognized compensation remaining to be recognized in future periods totaled $380 million for stock options, $0.2 million for restricted stock and $378 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 $147 million and $134 million for the three months ended March 31, 2022 and 2021, respectively, which is included in operating costs and expenses.   
12.    Earnings Per Share  
Basic earnings per common share is computed by dividing net income attributable to Charter shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share considers the impact of potentially dilutive securities using the treasury stock and if-converted methods and is based on the weighted average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options, restricted stock, restricted stock units, equity awards with market conditions and Charter Holdings convertible preferred units and common units. Charter Holdings common units of 21 million and 15 million for the three months ended March 31, 2022 and 2021, respectively, were not included in the computation of diluted earnings per share as their effect would have been antidilutive. The following is the computation of diluted earnings per common share for the three months ended March 31, 2022 and 2021.  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Three Months Ended March 31, |
|  |  |  |  |  | 2022 |  | 2021 |
| Numerator: |  |  |  |  |  |  |  |
| Net income attributable to Charter shareholders |  |  |  |  | $ | 1,203  |  |  | $ | 807  |  |
| Effect of dilutive securities: |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
| Charter Holdings convertible preferred units  |  |  |  |  | —  |  |  | 38  |  |
| Net income attributable to Charter shareholders after assumed conversions |  |  |  |  | $ | 1,203  |  |  | $ | 845  |  |
|  |  |  |  |  |  |  |  |
| Denominator: |  |  |  |  |  |  |  |
| Weighted average common shares outstanding, basic |  |  |  |  | 170,688,127  |  |  | 191,404,527  |  |
| Effect of dilutive securities: |  |  |  |  |  |  |  |
| Assumed exercise or issuance of shares relating to stock plans |  |  |  |  | 3,812,345  |  |  | 5,134,509  |  |
|  |  |  |  |  |  |  |  |
| Weighted average Charter Holdings convertible preferred units  |  |  |  |  | —  |  |  | 9,333,500  |  |
| Weighted average common shares outstanding, diluted |  |  |  |  | 174,500,472  |  |  | 205,872,536  |  |
|  |  |  |  |  |  |  |  |
| Basic earnings per common share attributable to Charter shareholders |  |  |  |  | $ | 7.05  |  |  | $ | 4.22  |  |
| Diluted earnings per common share attributable to Charter shareholders |  |  |  |  | $ | 6.90  |  |  | $ | 4.11  |  |

  
13.     Contingencies   
Sprint filed a patent suit against Charter and Bright House Networks, LLC ("Bright House") on December 2, 2017 in the United States District Court for the District of Delaware. The Company brought a patent suit against Sprint (TC Tech, LLC v. Sprint) in the United States District Court for the District of Delaware implicating Sprint's LTE technology and a similar suit against T-Mobile in the United States District Court for the Western District of Texas.   
Sprint filed a subsequent patent suit against Charter on May 17, 2018. On February 18, 2020, Sprint filed a lawsuit against Charter, Bright House and Time Warner Cable Inc. in the United States District Court for the District of Kansas alleging that Charter misappropriated trade secrets from Sprint years ago through employees hired by Bright House. Charter, T-Mobile and   
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