Charter details Cox deal impact with pro forma results
Charter Communications outlines the expected impact of its pending acquisition of Cox Communications’ businesses and provides Cox’s latest standalone results.
Rhea-AI Filing Summary
Charter Communications outlines the expected impact of its pending acquisition of Cox Communications’ businesses and provides Cox’s latest standalone results. Under a May 2025 Transaction Agreement, Charter will acquire Cox’s commercial fiber and managed IT/cloud subsidiaries and receive Cox’s residential cable business via contribution, while the combined entity assumes approximately $12.4 billion of Cox debt and finance leases and Cox Enterprises pays Charter $1.
The preliminary purchase price is about $14.3 billion, funded through roughly $4.2 billion of cash (including new debt) and equity in Charter Holdings common and convertible preferred units. Pro forma for the first half of 2026, the combined company would have had $33.2 billion in revenue and net income attributable to Charter shareholders of $2.2 billion, after higher depreciation, amortization and interest and increased noncontrolling interests. Cox’s own first-half 2026 revenue was $6.1 billion with net income of $874 million.
The materials also show that in March 2026 the U.S. Supreme Court reversed a prior adverse copyright verdict in the Sony Music matter and final judgment has been entered in Cox’s favor, concluding that case. Detailed unaudited pro forma condensed combined financial statements and Cox interim financials are provided as exhibits.
Positive
- Supreme Court win eliminates prior $1.0 billion copyright verdict, with final judgment entered in Cox’s favor in 2026, removing a major legacy legal overhang highlighted in earlier proceedings.
- The Cox acquisition is sized at a preliminary $14.3 billion with pro forma first-half 2026 combined revenue of $33.2 billion, illustrating substantial scale from adding Cox’s broadband and commercial fiber operations.
- Cox generated $874 million of net income on $6.1 billion of revenue in the first half of 2026, indicating a profitable asset base being combined with Charter.
Negative
- The combined entity will assume Cox’s approximately $12.4 billion in outstanding net debt and finance leases, increasing Charter’s leverage and interest expense burden.
- Pro forma for the Cox deal, net income attributable to Charter shareholders for the first half of 2026 falls to $2.2 billion from Charter’s standalone $2.5 billion, reflecting higher depreciation, amortization, interest and noncontrolling interest allocations.
Filing Explained
The transaction was still uncompleted on August 3; closing would reduce existing holders’ percentage ownership through exchangeable common and preferred interests.
As of
The pro forma assumes Cox Enterprises would hold
On the illustrative June 30, 2026 pro forma balance sheet, combined long-term debt is
These are not completed-transaction balances: Charter had not finished its valuation studies or final purchase-price allocation, and the filing says actual financial position may differ. The named resolution points are final valuation and purchase-price allocation, required stockholder and regulatory approvals, and closing.
8-K Event Classification
Key Figures
Key Terms
Transaction Agreement regulatory
unaudited pro forma condensed combined financial statements financial
tax receivables agreement financial
Multimedia over Coax Alliance technical
contributory copyright infringement regulatory
Offering Details
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What transaction is Charter Communications (CHTR) pursuing with Cox Enterprises?
What is the preliminary purchase price for the Cox businesses in the CHTR deal?
How would the Cox acquisition affect Charter’s pro forma results for first-half 2026?
What were Cox Communications’ standalone financial results in first-half 2026?
How does the Sony Music copyright litigation impact CHTR’s Cox acquisition?
How will noncontrolling interests change after the Cox transactions for CHTR?
AI-generated analysis. How Rhea-AI works. Not financial advice.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b- 2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
ITEM 8.01. OTHER EVENTS.
As previously disclosed, on May 16, 2025, Charter Communications, Inc., a Delaware corporation (“Charter”), entered into a Transaction Agreement (the “Transaction Agreement”) by and among Charter, Charter Communications Holdings, LLC, a Delaware limited liability company and subsidiary of Charter (“Charter Holdings”), and Cox Enterprises, Inc., a Delaware corporation (“Cox Enterprises”), pursuant to which (i) Cox Enterprises will sell and transfer to Charter 100% of the equity interests of certain subsidiaries of Cox Communications, Inc., a wholly owned subsidiary of Cox Enterprises (“Cox Communications”), that conduct Cox Communications’ commercial fiber and managed IT and cloud services businesses, (ii) Cox Enterprises will contribute the equity interests of Cox Communications (after its conversion into a limited liability company pursuant to a preclosing restructuring) and certain other assets (other than certain excluded assets) primarily related to Cox Communications’ residential cable business to Charter Holdings and (iii) Cox Enterprises will pay $1.00 to Charter (the transactions described in clauses (i)-(iii), collectively, the “Transactions”).
Charter is filing this Current Report on Form 8-K to provide the (i) unaudited interim condensed consolidated financial statements of Cox Communications as of and for the three and six months ended June 30, 2026, and (ii) certain pro forma financial information regarding the Transactions as of and for the six months ended June 30, 2026 and for the year ended December 31, 2025. The unaudited pro forma condensed combined financial statements as of and for the six months ended June 30, 2026 and for the year ended December 31, 2025 are intended to reflect the impact of the Transactions on the consolidated financial statements of Charter as if the Transactions had occurred as of June 30, 2026 for the unaudited pro forma condensed combined balance sheet and as of January 1, 2025 for the unaudited pro forma condensed combined statements of operations.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
| Exhibit Number |
Description | |
| 23.1 | Consent of Deloitte & Touche LLP. | |
| 99.1 | Unaudited interim condensed consolidated financial statements of Cox Communications, Inc. as of and for the three and six months ended June 30, 2026, and the accompanying notes thereto. | |
| 99.2 | Unaudited pro forma condensed combined financial statements of Charter Communications, Inc. as of and for the six months ended June 30, 2026 and for the year ended December 31, 2025, and the accompanying notes thereto. | |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |
Cautionary Note Regarding Forward-Looking Statements
This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, the proposed transaction between Charter and Cox Enterprises. Although we believe that our plans, intentions and expectations as 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: (i) the effect of the announcement of the proposed transaction on the ability of Charter and Cox Enterprises to operate their respective businesses and retain and hire key personnel and to maintain favorable business relationships; (ii) the timing of the proposed transaction; (iii) the ability to satisfy closing conditions to the completion of the proposed transaction (including stockholder and regulatory approvals); (iv) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (v) the ultimate outcome and results of integrating operations and application of Charter’s operating strategies to the acquired assets and the ultimate ability to realize synergies at the levels currently expected as well as potential dis-synergies; (vi) the impact of the proposed transaction on our stock price and future operating results, including due to transaction and integration costs, increased interest expense, business disruption, and diversion of management time and attention; (vii) the reduction in our current stockholders’ percentage ownership and voting interest as a result of the proposed transaction; (viii) the increase in our indebtedness as a result of the proposed transaction, which will increase interest expenses and may decrease our operating flexibility; (ix) litigation relating to the proposed transaction; (x) other risks related to the completion of the proposed transaction and actions related thereto; and (xi) the factors described under “Risk Factors” from time to time in Charter’s filings with the SEC. Many of the forward-looking statements contained in this communication may be identified by the use of forward-looking words such as “believe,” “future,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” “aim,” “on track,” “target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “initiatives,” “seek,” “would,” “could,” “continue,” “ongoing,” “upside,” “increases,” “grow,” “focused on” and “potential,” among others.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Charter assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, each of Charter Communications, Inc., CCO Holdings, LLC and CCO Holdings Capital Corp. has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
| CHARTER COMMUNICATIONS, INC., | ||
| Registrant | ||
| By: | /s/ Kevin D. Howard | |
| Name: | Kevin D. Howard | |
| Title: | Executive Vice President, Chief Accounting Officer and Controller | |
| Date: August 3, 2026 | ||
| CCO HOLDINGS, LLC, | ||
| Registrant | ||
| By: | /s/ Kevin D. Howard | |
| Name: | Kevin D. Howard | |
| Title: | Executive Vice President, Chief Accounting Officer and Controller | |
| Date: August 3, 2026 | ||
| CCO HOLDINGS CAPITAL CORP., | ||
| Registrant | ||
| By: | /s/ Kevin D. Howard | |
| Name: | Kevin D. Howard | |
| Title: | Executive Vice President, Chief Accounting Officer and Controller | |
| Date: August 3, 2026 | ||
Exhibit 99.1
COX COMMUNICATIONS, INC.
(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)
TABLE OF CONTENTS
| Page | |
| Condensed Consolidated Financial Statements as of June 30, 2026 and December 31, 2025 and for the three and six months ended June 30, 2026 and 2025: | |
| Condensed Consolidated Balance Sheets (Unaudited) | 1 |
| Condensed Consolidated Statements of Operations (Unaudited) | 2 |
| Condensed Consolidated Statements of Cash Flows (Unaudited) | 3 |
| Condensed Consolidated Statements of Changes in Equity (Unaudited) | 4 |
| Notes to Condensed Consolidated Financial Statements (Unaudited) | 5 |
COX COMMUNICATIONS, INC.
(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, | December 31, | |||||||
| (in millions) | 2026 | 2025 | ||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 79 | $ | 64 | ||||
| Accounts receivable — net of allowance of $58 and $38, respectively | 633 | 657 | ||||||
| Amounts due from Cox Enterprises, Inc. | 4,632 | 4,025 | ||||||
| Prepaid expenses and other current assets | 350 | 352 | ||||||
| Total current assets | 5,694 | 5,098 | ||||||
| Property and equipment — net | 12,504 | 12,603 | ||||||
| Goodwill | 1,260 | 1,260 | ||||||
| Intangible assets — net | 11,357 | 11,374 | ||||||
| Other noncurrent assets | 417 | 394 | ||||||
| TOTAL ASSETS | $ | 31,232 | $ | 30,729 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Accounts payable | $ | 518 | $ | 497 | ||||
| Accrued labor and benefits | 401 | 482 | ||||||
| Accrued programming costs | 161 | 180 | ||||||
| Accrued expenses and other current liabilities | 791 | 790 | ||||||
| Current portion of long-term debt | 1,038 | 1,038 | ||||||
| Total current liabilities | 2,909 | 2,987 | ||||||
| Long-term debt | 11,457 | 11,474 | ||||||
| Deferred income taxes | 4,542 | 4,446 | ||||||
| Other noncurrent liabilities | 466 | 873 | ||||||
| Total liabilities | 19,374 | 19,780 | ||||||
| EQUITY | ||||||||
| Common stock, $1.00 par value; 1,000 shares authorized and 100 shares issued and outstanding | — | — | ||||||
| Additional paid-in capital | 4,575 | 4,540 | ||||||
| Retained earnings | 7,283 | 6,409 | ||||||
| Total equity | 11,858 | 10,949 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 31,232 | $ | 30,729 | ||||
See notes to Condensed Consolidated Financial Statements.
1
COX COMMUNICATIONS, INC.
(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| REVENUES | $ | 3,008 | $ | 3,140 | $ | 6,067 | $ | 6,323 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Operating costs and expenses (a) | 1,821 | 1,880 | 3,561 | 3,802 | ||||||||||||
| Depreciation and amortization | 523 | 551 | 1,061 | 1,095 | ||||||||||||
| Other — net | 93 | 71 | 139 | 56 | ||||||||||||
| Total operating expenses | 2,437 | 2,502 | 4,761 | 4,953 | ||||||||||||
| OPERATING INCOME | 571 | 638 | 1,306 | 1,370 | ||||||||||||
| NON-OPERATING EXPENSES: | ||||||||||||||||
| Interest expense — net | (109 | ) | (111 | ) | (220 | ) | (219 | ) | ||||||||
| Investments expense — net | (3 | ) | (14 | ) | (2 | ) | (55 | ) | ||||||||
| Miscellaneous income — net | 16 | 7 | 31 | 14 | ||||||||||||
| Total non-operating expenses | (96 | ) | (118 | ) | (191 | ) | (260 | ) | ||||||||
| INCOME BEFORE INCOME TAXES | 475 | 520 | 1,115 | 1,110 | ||||||||||||
| INCOME TAX EXPENSE | (103 | ) | (105 | ) | (241 | ) | (234 | ) | ||||||||
| NET INCOME | $ | 372 | $ | 415 | $ | 874 | $ | 876 | ||||||||
(a) See Note 8 — Transactions with Affiliated Companies for impacts associated with related parties.
See notes to Condensed Consolidated Financial Statements.
2
COX COMMUNICATIONS, INC.
(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30, | ||||||||
| (in millions) | 2026 | 2025 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 874 | $ | 876 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,061 | 1,095 | ||||||
| Deferred income taxes | 4 | (24 | ) | |||||
| Investments expense — net | 2 | 55 | ||||||
| Provision for credit losses | 40 | 40 | ||||||
| Restructuring and other | 33 | (169 | ) | |||||
| Changes in certain assets and liabilities: | ||||||||
| Increase in accounts receivable | (16 | ) | (38 | ) | ||||
| Increase in prepaid expenses and other assets | (8 | ) | — | |||||
| Increase (decrease) in accounts payable | 20 | (32 | ) | |||||
| Decrease in accrued expenses and other liabilities | (418 | ) | (177 | ) | ||||
| Other — net | 16 | (22 | ) | |||||
| Net cash provided by operating activities | 1,608 | 1,604 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (963 | ) | (1,136 | ) | ||||
| (Increase) decrease in amounts due from Cox Enterprises, Inc. | (607 | ) | 366 | |||||
| Other — net | 4 | 30 | ||||||
| Net cash used in investing activities | (1,566 | ) | (740 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment of debt | (20 | ) | (867 | ) | ||||
| Other — net | (7 | ) | (11 | ) | ||||
| Net cash used in financing activities | (27 | ) | (878 | ) | ||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 15 | (14 | ) | |||||
| CASH AND CASH EQUIVALENTS — Beginning of period | 64 | 97 | ||||||
| CASH AND CASH EQUIVALENTS — End of period | $ | 79 | $ | 83 | ||||
See notes to Condensed Consolidated Financial Statements.
3
COX COMMUNICATIONS, INC.
(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
| (in millions) | Common Stock |
Additional Paid- In Capital |
Retained Earnings |
Total | ||||||||||||
| BALANCE — January 1, 2026 | $ | — | $ | 4,540 | $ | 6,409 | $ | 10,949 | ||||||||
| Net income | — | — | 502 | 502 | ||||||||||||
| Contribution to capital from Cox Enterprises, Inc. | — | 28 | — | 28 | ||||||||||||
| BALANCE — March 31, 2026 | — | 4,568 | 6,911 | 11,479 | ||||||||||||
| Net income | — | — | 372 | 372 | ||||||||||||
| Contribution to capital from Cox Enterprises, Inc. | — | 7 | — | 7 | ||||||||||||
| BALANCE — June 30, 2026 | $ | — | $ | 4,575 | $ | 7,283 | $ | 11,858 | ||||||||
| (in millions) | Common Stock |
Additional Paid- In Capital |
Retained Earnings |
Total | ||||||||||||
| BALANCE — January 1, 2025 | $ | — | $ | 4,429 | $ | 10,057 | $ | 14,486 | ||||||||
| Net income | — | — | 461 | 461 | ||||||||||||
| BALANCE — March 31, 2025 | — | 4,429 | 10,518 | 14,947 | ||||||||||||
| Net income | — | — | 415 | 415 | ||||||||||||
| BALANCE — June 30, 2025 | $ | — | $ | 4,429 | $ | 10,933 | $ | 15,362 | ||||||||
See notes to Condensed Consolidated Financial Statements.
4
COX COMMUNICATIONS, INC.
(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND OTHER ITEMS
Cox Communications, Inc. (together with its consolidated subsidiaries, "Cox" or "the Company"), a wholly-owned subsidiary of Cox Enterprises, Inc. ("CEI"), is committed to creating meaningful moments of human connection through technology. As the largest private broadband company in the United States, Cox operates fiber-powered networks in more than 30 states, providing connections and advanced managed IT and cloud services for homes and businesses. Cox Mobile, Cox’s mobile phone service, is available across markets nationwide. The commercial division of Cox, Cox Business, provides a broad commercial solutions portfolio, including advanced managed IT and cloud services and fiber-based network solutions that support connected environments, unique hospitality experiences and diverse applications.
Basis of Presentation
The accompanying unaudited interim Condensed Consolidated Financial Statements of Cox have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete consolidated financial statements. In the opinion of management, the unaudited interim Condensed Consolidated Financial Statements include all adjustments, of a normal recurring nature, necessary for a fair presentation of the condensed consolidated results of operations, financial position and cash flows for the interim periods presented. All intercompany transactions and account balances have been eliminated in consolidation. Cox has included the results of operations of acquired companies from the date of acquisition. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes therein as of and for the year ended December 31, 2025. Results of operations for interim periods are not necessarily indicative of results that might be expected for future interim periods or for the full year ending December 31, 2026.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Estimates are evaluated based on available information and experience, as well as other assumptions Cox believes reasonable under the circumstances. Actual results could differ from those estimates.
5
Revenue Recognition
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Residential | ||||||||||||||||
| Data | $ | 1,350 | $ | 1,438 | $ | 2,737 | $ | 2,916 | ||||||||
| Video | 563 | 610 | 1,150 | 1,230 | ||||||||||||
| Telephony | 41 | 50 | 81 | 103 | ||||||||||||
| Other (a) | 136 | 137 | 270 | 275 | ||||||||||||
| Total residential | 2,090 | 2,235 | 4,238 | 4,524 | ||||||||||||
| Commercial | 853 | 852 | 1,714 | 1,695 | ||||||||||||
| Advertising | 65 | 53 | 115 | 104 | ||||||||||||
| Total revenues | $ | 3,008 | $ | 3,140 | $ | 6,067 | $ | 6,323 | ||||||||
| (a) | Other residential revenues includes franchise, regulatory, and customer late fees, service protection fees, Cox Mobile and other miscellaneous revenues. |
Operating Costs and Expenses
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Programming costs | $ | 434 | $ | 472 | $ | 875 | $ | 975 | ||||||||
| Other costs of revenue | 285 | 282 | 557 | 566 | ||||||||||||
| Field and technology operations | 251 | 250 | 481 | 506 | ||||||||||||
| Customer operations | 53 | 53 | 103 | 105 | ||||||||||||
| Sales and marketing | 250 | 278 | 502 | 545 | ||||||||||||
| General and administrative | 548 | 545 | 1,043 | 1,105 | ||||||||||||
| Total operating costs and expenses | $ | 1,821 | $ | 1,880 | $ | 3,561 | $ | 3,802 | ||||||||
Subsequent Events
Cox has evaluated events that occurred subsequent to June 30, 2026 for potential recognition and disclosure. Any applicable subsequent events have been evaluated through July 31, 2026, the date of issuance of the unaudited Condensed Consolidated Financial Statements.
6
2. DIVESTITURE
Pending Disposition of Cox — In May 2025, Charter Communications, Inc. (“Charter”) and Charter Communications Holdings, LLC (“Charter Holdings”) entered into a transaction agreement with CEI. Pursuant to the transaction agreement, at the closing of the transactions, (i) CEI will sell and transfer to Charter 100% of the equity interests of certain subsidiaries of Cox that conduct Cox’s commercial fiber and managed IT and cloud services businesses, (ii) CEI will contribute the equity interests of Cox and certain other assets (other than certain excluded assets) primarily relating to Cox’s residential cable business to Charter Holdings, and (iii) CEI will pay $1.00 to Charter. The combined entity will also assume Cox’s approximately $12.4 billion in outstanding net debt and finance leases.
On July 31, 2025, Charter’s shareholders approved the transaction agreement.
3. SUPPLEMENTAL CASH FLOW INFORMATION
| Six Months Ended June 30, | ||||||||
| (in millions) | 2026 | 2025 | ||||||
| Significant noncash transactions: | ||||||||
| Contribution to capital from Cox Enterprises, Inc. | $ | 35 | $ | — | ||||
| Property and equipment acquired under finance leases and other financing arrangements | — | 153 | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | 300 | $ | 318 | ||||
| Cash paid for income taxes(a) | 237 | 262 | ||||||
| (a) | The amounts disclosed as income taxes paid include both cash tax payments made directly to taxing authorities and payments made by Cox to its parent in settlement of its share of consolidated income tax obligations. |
4. RESTRUCTURING
In 2024, Cox announced a new organizational structure, which allocated needed resources to growth areas of the business. As a result, certain restructuring initiatives were implemented, which included severance costs.
The following represents the changes in the balances of the restructuring-related liabilities, which are reflected within accrued labor and benefits in the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025.
| (in millions) | June 30, 2026 | December 31, 2025 | ||||||
| Balance at beginning of period | $ | 4 | $ | 180 | ||||
| Expense(a) | — | — | ||||||
| Payments | (2 | ) | (176 | ) | ||||
| Balance at end of period | $ | 2 | $ | 4 | ||||
| (a) | Restructuring-related charges were recorded to other — net on the Condensed Consolidated Statements of Operations. |
7
5. DEBT
| June 30, 2026 | December 31, 2025 | |||||||||||||||
| (in millions) | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
| Notes and debentures (a) | $ | 11,849 | $ | 10,424 | $ | 11,849 | $ | 10,631 | ||||||||
| Finance lease obligations (b)(c) | 717 | 737 | ||||||||||||||
| Less unamortized discounts, premiums and issuance costs | (71 | ) | (74 | ) | ||||||||||||
| Total debt | 12,495 | 12,512 | ||||||||||||||
| Less current maturities (b) | 1,038 | 1,038 | ||||||||||||||
| Total long-term debt | $ | 11,457 | $ | 11,474 | ||||||||||||
(a) Require semi-annual cash interest payments based on their issuance dates.
(b) Current portion of finance lease obligations totaled $38 million as of June 30, 2026 and December 31, 2025, respectively.
(c) Cox leases certain office facilities, cable transmission and distribution facilities and automobiles under finance leases.
Guarantee Agreements
Cox is a party to an amended and restated credit agreement among Cox and CEI, as borrowers, and JP Morgan Chase Bank, N.A., as administrative agent, and certain other lenders and agents (the “Credit Facility”). CEI designated Cox as a restricted subsidiary under the Credit Facility. At the same time, Cox provided an unconditional guarantee of CEI’s obligations under the Credit Facility and CEI also provided an unconditional guarantee of Cox's obligations under the Credit Facility, which will be automatically released upon the release of Cox's guarantee of CEI's obligations under the Credit Facility. Cox will also guarantee CEI’s obligations under CEI’s commercial paper program. As of June 30, 2026 and December 31, 2025, CEI had no outstanding obligations under the Credit Facility and $125 million and no outstanding commercial paper subject to Cox’s guarantee, respectively.
In addition, Cox and CEI provide unconditional cross-guarantees of the other’s obligations under each company’s respective outstanding notes (except for Cox's 6.53% debentures due 2028, of which no material amounts are outstanding). CEI and Cox may release their obligations under the cross-guarantee simultaneously with the other party’s release or in other customary circumstances. As of June 30, 2026 and December 31, 2025, CEI had $175 million of outstanding notes subject to Cox's guarantee.
6. COMMITMENTS AND CONTINGENCIES
At the time of divesting an ownership interest in an entity, Cox sometimes agrees to indemnify the buyer for certain liability risks. Cox believes that any liability to the Company that may arise as a result of such indemnification agreements will not have a material adverse effect on the company taken as a whole.
Legal Proceedings
Sony Music et al. — In July 2018, Sony Music Entertainment Inc., Warner Bros. Records Inc., Universal Music Corp. and several other music publishers and recording companies filed a copyright infringement lawsuit against Cox. The plaintiffs alleged that Cox’s handling of Digital Millennium Copyright Act notices resulted in willful copyright infringement with respect to thousands of songs. Plaintiffs sought monetary damages.
8
In December 2019, a jury returned a verdict of $1.0 billion against Cox, with a finding of contributory infringement, vicarious infringement and willfulness. Following various post-trial motions, Cox appealed to the United States Court of Appeals for the Fourth Circuit. In addition to the merits appeal, Cox filed two Rule 60 motions in the trial court seeking relief from the verdict; those Rule 60 motions were heard and denied by the trial court in March 2022. Cox appealed the Rule 60 rulings to the Fourth Circuit, which held the Rule 60 appeal in abeyance until after the merits appeal. In February 2024, the Fourth Circuit affirmed the jury's finding of willful contributory infringement but reversed the jury's finding of vicarious liability and vacated the $1.0 billion judgment against Cox. Both parties' petitions for a rehearing en banc were denied by the Fourth Circuit. Cox also filed motions in the Fourth Circuit seeking partial appellate costs and an update regarding the Rule 60 appeal. Briefing concluded in the Rule 60 appeal in September 2024. Cox filed an unopposed motion to release the appeal bond, which was granted in May 2024. Cox’s motion for costs on the judgment bond was denied in August 2024. The trial proceeding was stayed by the Fourth Circuit until the resolution of the Rule 60 appeal. In November 2024, in response to writs of certiorari filed by both parties, the United States Supreme Court called for the view of the United States Solicitor General. In May 2025, the United States Solicitor General submitted its brief amicus curiae recommending that Cox’s writ of certiorari be granted and Sony’s writ of certiorari be denied. In June 2025, the United States Supreme Court granted Cox’s writ of certiorari and denied Sony’s writ of certiorari. Cox’s opening brief was filed in August 2025. Oral argument was held in December 2025. In March 2026, the United States Supreme Court reversed the Fourth Circuit's judgment, holding that as a matter of law, Cox’s conduct did not meet the standard for contributory copyright infringement.
As a result of the Supreme Court’s decision, in May 2026, the Fourth Circuit issued judgment in Cox’s favor on the merits appeal. In June 2026, the Fourth Circuit dismissed as moot Rule 60(b) appeal and the district court entered final judgment in favor of Cox and against Plaintiffs. This matter is now concluded.
TQ Delta — In July 2015, TQ Delta filed an action against Cox alleging patent infringement of eight patents related to the Multimedia over Coax Alliance standard, parts of which are alleged to be implemented in Whole Home DVR. The plaintiff voluntarily dropped two patents in response to the court’s requirement that the number of claims be reduced. Inter Partes Reviews ("IPRs") were filed against the remaining six patents. The Patent Trial and Appeal Board invalidated four of the patents during the IPR proceeding, but two patents survived on appeal to the United States Court of Appeal for the Federal Circuit. The parties have engaged in expert discovery and are awaiting rulings on claim construction and summary judgment. Trial is scheduled for October 2027. The outcome of this matter cannot be predicted at this time.
Entropic — In February 2023, Entropic Communications filed two separate actions against Cox alleging patent infringement. The first case was brought with twelve patents and was related to the Multimedia over Coax Alliance standard. The second case was brought with ten patents with allegations related to the DOCSIS ("Data Over Cable Service Interface Speculation") and DOCSIS adjacent technologies. Through patent challenges brought both with the Court and the Patent Trial and Appeals Board ("PTAB"), sixteen patents were effectively invalidated. Entropic is in the process of appealing the rulings of invalidity issued by the U.S. Patent Office to the Federal Circuit. There has been no activity in these cases beyond Claim Construction hearings and no schedule has been set in either case. The outcome of this matter cannot be predicted at this time.
9
Other Patent Matters — Cox is a defendant or co-defendant in several lawsuits involving alleged infringement of various patents relating to various aspects of its businesses. In the event that a court ultimately determines that Cox infringes on any intellectual property rights, Cox may be subject to substantial damages and/or an injunction that could require Cox or its vendors to modify certain products and services Cox offers to its subscribers, as well as negotiate royalty or license agreements with respect to the patents at issue. While Cox intends to vigorously defend the actions, no assurance can be given that any adverse outcome would not be material to Cox's Condensed Consolidated Financial Statements. Cox cannot predict the outcome of any of these matters nor can it reasonably estimate a range of possible loss at this time.
Other Legal Proceedings — Cox and its subsidiaries are parties to various other legal proceedings that are ordinary and incidental to their businesses.
7. FAIR VALUE MEASUREMENTS
Cox measures certain financial assets and liabilities at fair value on a recurring basis and also measures certain nonfinancial assets at fair value on a nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability as defined in the below fair value hierarchy:
Level 1 — Observable inputs such as quoted prices in active markets;
Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3 — Unobservable inputs in which there is little or no market data, which require an entity to develop its own assumptions.
Recurring Fair Value Measurements
Cash Equivalents — Cox's cash equivalents are measured at fair value on a recurring basis and generally consist of money market funds, time deposits and commercial paper. The fair values of Cox's cash equivalents fall within Level 1 of the fair value hierarchy and are based on a market approach using quoted prices and other relevant information generated by market transactions involving identical or comparable assets.
Debt — Cox's notes and debentures as of June 30, 2026 and December 31, 2025 are based on inputs other than quoted prices in active markets, that are observable either directly or indirectly and are classified within Level 2.
Other Financial Instruments — The carrying amounts of the Cox’s accounts receivable, accounts payable and other current assets and liabilities approximate fair value due to their short-term maturities and/or nature of these instruments.
Non-Recurring Fair Value Measurements
Cox's nonfinancial assets (such as property and equipment, goodwill and intangible assets), equity method investments and nonmarketable equity securities are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. Inputs used in these fair value measurements are often unobservable and may require judgment, which could affect the ascribed fair values.
10
8. TRANSACTIONS WITH AFFILIATED COMPANIES
For all periods presented in the Condensed Consolidated Financial Statements, related party transactions and activities between Cox, CEI and other CEI subsidiaries may not have been consummated on terms equivalent to those that would prevail in an arm’s-length transaction where conditions of competitive, free-market dealing may exist.
Allocated Expenses from CEI
Allocated expenses as shown in the table below are directly calculated or based on CEI's estimate of services provided to Cox in relation to those provided to other CEI subsidiaries. Cox believes that these allocations were made on a reasonable basis. However, the allocations are not necessarily indicative of the level of expenses that might have been incurred had Cox contracted directly with third parties.
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Employee Benefit Plans | ||||||||||||||||
| Healthcare and other employee benefits | $ | 67 | $ | 63 | $ | 135 | $ | 127 | ||||||||
| Qualified and nonqualified pension (a) | 14 | 19 | 27 | 37 | ||||||||||||
| 401(k) Plan | 20 | 20 | 39 | 39 | ||||||||||||
| Postemployment and postretirement benefits (a) | 5 | 6 | 9 | 11 | ||||||||||||
| Long-term incentive compensation | 28 | 32 | 56 | 66 | ||||||||||||
| Other Allocated Expenses (b) | ||||||||||||||||
| Management services | 66 | 69 | 131 | 138 | ||||||||||||
| Occupancy-related services | 8 | 6 | 16 | 13 | ||||||||||||
| (a) | The service cost component related to Cox’s qualified and nonqualified pension plans and postretirement benefits is recorded to operating costs and expenses on the Condensed Consolidated Statements of Operations. The non-service cost component, which includes interest cost, expected return on plan assets, prior service cost amortization and actuarial loss amortization, is recorded to miscellaneous income — net on the Condensed Consolidated Statements of Operations. | |
| (b) | Cox receives certain management (e.g., legal, corporate secretarial, tax, cash management, treasury, internal audit, risk management, employee benefit administration and other support services) and occupancy-related (e.g., repairs and maintenance, utilities, insurance and property taxes) services from CEI. |
Amounts due from CEI
Cox receives day-to-day cash management services from CEI, with settlements of outstanding balances between Cox and CEI occurring periodically. The amounts due from CEI are due on demand and represent the net balance of the intercompany transactions. The interest rate is based on CEI's internal borrowing rate, generally determined from CEI's rates under the Credit Facility, which ranged from 3.72% to 3.78% during the six months ended June 30, 2026, and 4.42% to 4.43% during the six months ended June 30, 2025. The associated interest income was $43 million and $45 million for three months ended June 30, 2026 and 2025, respectively, and was $84 million and $90 million for the six months ended June 30, 2026 and 2025, respectively.
Other Related Party Transactions
There are various other related party activities between Cox and related parties that individually and in the aggregate, are not material to Cox's Condensed Consolidated Financial Statements.
******
11
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed combined financial statements as of and for the six months ended June 30, 2026 and for the year ended December 31, 2025 are intended to reflect the impact of the Cox Transactions on the consolidated financial statements of Charter Communications, Inc. (“Charter”), as if the Cox Transactions had occurred as of June 30, 2026 for the unaudited pro forma condensed combined balance sheet and as of January 1, 2025 for the unaudited pro forma condensed combined statements of operations. The accompanying unaudited pro forma financial statements present the pro forma financial position and results of operations of Charter based on the historical financial statements and accounting records of Charter and Cox Communications, Inc (“Cox Communications”) and the related pro forma transaction accounting adjustments as described in the accompanying notes. The transaction accounting adjustments are intended to reflect U.S. generally accepted accounting principles (“GAAP”) to illustrate the effects of the transactions on Charter’s historical financial statements.
The Transactions
On May 16, 2025, Charter, Charter Communications Holdings, LLC (“Charter Holdings”), and Cox Enterprises, Inc. (“Cox Enterprises”) entered into a Transaction Agreement (the “Transaction Agreement”) pursuant to which (i) Cox Enterprises will sell and transfer to Charter 100% of the equity interests of certain subsidiaries of Cox Communications that conduct Cox Communications’ commercial fiber and managed IT and cloud services businesses (the “Equity Sale”), (ii) Cox Enterprises will contribute the equity interests of Cox Communications and certain other assets (other than certain excluded assets) primarily related to Cox Communications’ residential cable business to Charter Holdings (the “Contribution”), and (iii) Cox Enterprises will pay $1.00 to Charter (collectively, the “Cox Transactions”). Under the Transaction Agreement, Charter and Cox Enterprises may designate one or more wholly owned subsidiaries to take actions with respect to Charter and Cox Enterprises, respectively.
Pursuant to the Transaction Agreement, at the closing of the Cox Transactions:
| · | in consideration of the Equity Sale, Charter will pay $3.5 billion in cash to Cox Enterprises; |
| · | in consideration of the Contribution, Charter Holdings will (i) pay to Cox Enterprises $650 million in cash and (ii) issue to Cox Enterprises convertible preferred units of Charter Holdings with an aggregate liquidation preference of $6.0 billion, which will pay a 6.875% dividend per annum, and approximately 33.6 million Charter Holdings common units. The Charter Holdings convertible preferred units will be convertible into Charter Holdings common units, with an initial conversion price of $477.41, subject to certain adjustments. The Charter Holdings common units will be exchangeable by the holder, in certain circumstances, for cash or, at the election of Charter, Charter Class A common stock on a one-for-one basis, subject to certain adjustments; and |
| · | in consideration of the $1.00 payment from Cox Enterprises to Charter, Charter will issue to Cox Enterprises one share of the newly created Charter Class C common stock. The Charter Class C common stock will be equivalent, economically, to the outstanding Charter Class A common stock and the Charter Class B common stock but will have a number of votes per share that reflect the voting power of the Charter Holdings common units and the Charter Holdings convertible preferred units held by Cox Enterprises on an as-converted, as-exchanged basis. |
The combined entity will assume Cox Communications’ approximately $12.4 billion in outstanding net debt and finance leases.
1
Basis of Presentation
The unaudited pro forma financial statements are based on (i) the unaudited consolidated financial statements of Charter as of and for the three and six months ended June 30, 2026 contained in Charter’s Quarterly Report on Form 10-Q filed with the SEC on July 24, 2026, (ii) the unaudited consolidated financial statements of Cox Communications as of and for the three and six months ended June 30, 2026 contained in this Current Report on Form 8-K, (iii) the audited consolidated financial statements of Charter as of and for the year ended December 31, 2025 contained in Charter’s Annual Report on Form 10-K filed with the SEC on January 30, 2026, and (iv) the audited consolidated financial statements of Cox Communications as of and for the year ended December 31, 2025 contained in Charter’s Current Report on Form 8-K filed with the SEC on July 23, 2026.
The Cox Transactions will be accounted for using the acquisition method of accounting with Charter as the accounting acquirer. As of the date of this current report, Charter has not completed the detailed valuation studies necessary to arrive at final estimates of the fair market value of the assets to be acquired and the liabilities to be assumed and the related allocations of purchase price, nor has it identified all adjustments necessary to conform Cox Communications to Charter’s accounting policies. As indicated in Note 1 to the unaudited pro forma financial statements, based on information currently available, Charter has made certain adjustments to the historical book values of the assets and liabilities of Cox Communications to reflect preliminary estimates of fair values necessary to prepare the unaudited pro forma financial statements. Actual results may differ from these unaudited pro forma financial statements once the Cox Transactions are completed which includes determining the final purchase price for Cox Communications, completing the valuation studies necessary to finalize the required purchase price allocations, and identifying any additional conforming accounting policy changes for Cox Communications. There can be no assurance that such finalization will not result in material changes.
The unaudited pro forma financial statements are provided for illustrative purposes only and are based on available information and assumptions that Charter believes are reasonable and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Charter would have been had the Cox Transactions occurred on the dates indicated, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. The actual financial position and results of operations will differ, perhaps significantly, from the pro forma amounts reflected herein due to a variety of factors, including access to additional information, changes in value not currently identified and changes in operating results following the date of the pro forma financial statements. The assumptions underlying the pro forma adjustments are described in greater detail in the accompanying notes to the unaudited pro forma condensed combined financial statements.
Items Not Adjusted in the Unaudited Pro Forma Financial Information
The unaudited pro forma financial statements do not reflect all reclassifications or adjustments to conform the Cox Communications financial statement presentation or accounting policies to those adopted by Charter. At this time, Charter is not aware of any intercompany transactions that would have a material impact on the unaudited pro forma financial statements that are not reflected in the pro forma adjustments. Further review may identify additional intercompany transactions, reclassifications or differences between the accounting policies of the companies that, when conformed, could have a material impact on the unaudited pro forma financial statements of the combined company.
The unaudited pro forma financial statements do not include any adjustment for liabilities or related costs that may result from integration activities, since management has not completed the process of making these assessments. Significant liabilities and related costs may ultimately be recorded for employee severance or relocation, costs of vacating some facilities and costs associated with other exit and integration activities. The unaudited pro forma statements of operations also do not include any revenue or expense synergies or dis-synergies resulting from the Cox Transactions.
In connection with the Cox Transactions, at the closing, Charter, Cox Enterprises and Advance/Newhouse Partnership (“A/N”) will enter into the amended tax receivables agreement, which will set forth the terms pursuant to which Charter will pay Cox Enterprises and A/N, as applicable, for tax benefits arising from Cox Enterprises’ or A/N’s potential future exchanges of their respective Charter Holdings common units and Charter Holdings convertible preferred units, as applicable, into cash or Charter Class A common stock pursuant to the amended exchange agreement. The amended tax receivables agreement will provide for a payment by Charter of 50% of the tax benefits when realized by Charter from the step-up in tax basis resulting from any such future exchanges. A/N is currently party to the existing tax receivables agreement with Charter, and such agreement will be amended and restated by the amended tax receivables agreement at the closing. Charter has not recorded a pro forma adjustment for the tax receivables agreement with Cox Enterprises as a contingent consideration obligation in the preliminary purchase price allocation as it is impractical to estimate its fair value since the tax benefit is dependent on uncertain future events that are outside Charter’s control. A future exchange is not based on a fixed and determinable date and the exchange is not certain to occur.
2
UNAUDITED PRO
FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2026
(dollars in millions)
| Cox | |||||||||||||||||
| Charter | Communications | Pro Forma | Pro Forma | ||||||||||||||
| (Historical) | (Historical) | Adjustments | Combined | ||||||||||||||
| ASSETS | |||||||||||||||||
| CURRENT ASSETS: | |||||||||||||||||
| Cash and cash equivalents | $ | 509 | $ | 79 | $ | (158 | ) | 1a | $ | 430 | |||||||
| Accounts receivable, net | 3,651 | 633 | — | 4,284 | |||||||||||||
| Amounts due from Cox Enterprises, Inc. | — | 4,632 | (4,632 | ) | 1b | — | |||||||||||
| Prepaid expenses and other current assets | 813 | 350 | — | 1,163 | |||||||||||||
| Total current assets | 4,973 | 5,694 | (4,790 | ) | 5,877 | ||||||||||||
| INVESTMENT IN CABLE PROPERTIES: | |||||||||||||||||
| Property, plant and equipment, net | 47,955 | 12,504 | 3,996 | 1c | 64,455 | ||||||||||||
| Customer relationships, net | 238 | 479 | 3,121 | 1c | 3,838 | ||||||||||||
| Franchises | 67,471 | 10,275 | (3,750 | ) | 1c | 73,996 | |||||||||||
| Goodwill | 29,710 | 1,260 | (1,260 | ) | 1c | 29,710 | |||||||||||
| Total investment in cable properties, net | 145,374 | 24,518 | 2,107 | 171,999 | |||||||||||||
| OTHER NONCURRENT ASSETS | 5,271 | 1,020 | (351 | ) | 1d | 5,940 | |||||||||||
| Total assets | $ | 155,618 | $ | 31,232 | $ | (3,034 | ) | $ | 183,816 | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||
| CURRENT LIABILITIES: | |||||||||||||||||
| Accounts payable, accrued and other current liabilities | $ | 12,779 | $ | 1,871 | $ | — | $ | 14,650 | |||||||||
| Current portion of long-term debt | 999 | 1,038 | — | 2,037 | |||||||||||||
| Total current liabilities | 13,778 | 2,909 | — | 16,687 | |||||||||||||
| LONG-TERM DEBT | 92,960 | 11,457 | 2,778 | 1e | 107,195 | ||||||||||||
| EQUIPMENT INSTALLMENT PLAN FINANCING FACILITY | 1,596 | — | — | 1,596 | |||||||||||||
| DEFERRED INCOME TAXES | 20,237 | 4,542 | (4,991 | ) | 1f | 19,788 | |||||||||||
| OTHER LONG-TERM LIABILITIES | 5,146 | 466 | — | 5,612 | |||||||||||||
| SHAREHOLDERS’ EQUITY: | |||||||||||||||||
| Controlling interests | 16,952 | 11,858 | (15,110 | ) | 1g | 13,700 | |||||||||||
| Noncontrolling interests | 4,949 | — | 14,289 | 1g | 19,238 | ||||||||||||
| Total shareholders’ equity | 21,901 | 11,858 | (821 | ) | 32,938 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 155,618 | $ | 31,232 | $ | (3,034 | ) | $ | 183,816 | ||||||||
See accompanying “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”
3
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2026
(dollars and weighted average shares outstanding in millions, except per share amounts)
| Cox | |||||||||||||||||
| Charter | Communications | Pro Forma | Pro Forma | ||||||||||||||
| (Historical) | (Historical) | Adjustments | Combined | ||||||||||||||
| REVENUES | $ | 27,123 | $ | 6,067 | $ | 25 | 2a | $ | 33,215 | ||||||||
| COSTS AND EXPENSES: | |||||||||||||||||
| Operating costs and expenses (exclusive of items shown separately below) | 16,378 | 3,561 | (106 | ) | 2b | 19,833 | |||||||||||
| Depreciation and amortization | 4,408 | 1,061 | 243 | 2c | 5,712 | ||||||||||||
| Other operating expenses, net | 66 | 139 | 5 | 2d | 210 | ||||||||||||
| 20,852 | 4,761 | 142 | 25,755 | ||||||||||||||
| Income from operations | 6,271 | 1,306 | (117 | ) | 7,460 | ||||||||||||
| OTHER INCOME (EXPENSES): | |||||||||||||||||
| Interest expense, net | (2,532 | ) | (220 | ) | (278 | ) | 2e | (3,030 | ) | ||||||||
| Other expenses, net | 88 | 29 | (32 | ) | 2f | 85 | |||||||||||
| (2,444 | ) | (191 | ) | (310 | ) | (2,945 | ) | ||||||||||
| Income before income taxes | 3,827 | 1,115 | (427 | ) | 4,515 | ||||||||||||
| Income tax expense | (940 | ) | (241 | ) | 327 | 2g | (854 | ) | |||||||||
| Consolidated net income | 2,887 | 874 | (100 | ) | 3,661 | ||||||||||||
| Less: Net income attributable to noncontrolling interests | (432 | ) | — | (1,031 | ) | 2h | (1,463 | ) | |||||||||
| Net income attributable to Charter shareholders | $ | 2,455 | $ | 874 | $ | (1,131 | ) | $ | 2,198 | ||||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||
| Basic | $ | 20.00 | 2i | $ | 17.87 | ||||||||||||
| Diluted | $ | 19.81 | 2i | $ | 17.59 | ||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||
| Basic | 123 | 2i | 123 | ||||||||||||||
| Diluted | 124 | 2i | 137 | ||||||||||||||
See accompanying “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”
4
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2025
(dollars and weighted average shares outstanding in millions, except per share amounts)
| Cox | |||||||||||||||||
| Charter | Communications | Pro Forma | Pro Forma | ||||||||||||||
| (Historical) | (Historical) | Adjustments | Combined | ||||||||||||||
| REVENUES | $ | 54,774 | $ | 12,531 | $ | 54 | 2a | $ | 67,359 | ||||||||
| COSTS AND EXPENSES: | |||||||||||||||||
| Operating costs and expenses (exclusive of items shown separately below) | 32,739 | 7,543 | (222 | ) | 2b | 40,060 | |||||||||||
| Depreciation and amortization | 8,711 | 2,158 | 505 | 2c | 11,374 | ||||||||||||
| Impairment of intangible assets | — | 5,604 | — | 5,604 | |||||||||||||
| Other operating expenses, net | 416 | 192 | 162 | 2d | 770 | ||||||||||||
| 41,866 | 15,497 | 445 | 57,808 | ||||||||||||||
| Income (loss) from operations | 12,908 | (2,966 | ) | (391 | ) | 9,551 | |||||||||||
| OTHER INCOME (EXPENSES): | |||||||||||||||||
| Interest expense, net | (5,042 | ) | (424 | ) | (573 | ) | 2e | (6,039 | ) | ||||||||
| Other expenses, net | (408 | ) | (30 | ) | (30 | ) | 2f | (468 | ) | ||||||||
| (5,450 | ) | (454 | ) | (603 | ) | (6,507 | ) | ||||||||||
| Income (loss) before income taxes | 7,458 | (3,420 | ) | (994 | ) | 3,044 | |||||||||||
| Income tax expense | (1,692 | ) | 772 | 432 | 2g | (488 | ) | ||||||||||
| Consolidated net income (loss) | 5,766 | (2,648 | ) | (562 | ) | 2,556 | |||||||||||
| Less: Net income attributable to noncontrolling interests | (779 | ) | — | (401 | ) | 2h | (1,180 | ) | |||||||||
| Net income (loss) attributable to Charter shareholders | $ | 4,987 | $ | (2,648 | ) | $ | (963 | ) | $ | 1,376 | |||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||
| Basic | $ | 36.90 | 2i | $ | 10.19 | ||||||||||||
| Diluted | $ | 36.21 | 2i | $ | 10.00 | ||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||
| Basic | 135 | 2i | 135 | ||||||||||||||
| Diluted | 138 | 2i | 138 | ||||||||||||||
See accompanying “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”
5
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1. Cox Transactions Pro Forma Balance Sheet Adjustments
For purposes of the unaudited pro forma financial statements, the preliminary purchase price is assumed to be approximately $14.3 billion based on preliminary fair value estimates for each component of consideration transferred to Cox Enterprises. The Charter Holdings common units which are exchangeable into Charter Class A common stock are fair valued based on a $142.21 closing price of Charter Class A common stock on June 30, 2026, representing the last business day of the recently completed month. The Charter Holdings convertible preferred units are fair valued based on a binominal lattice simulation model contemplating a 6.875% preferred cash dividend on the instrument’s $6.0 billion par value and estimated fair value of Charter Class A common stock upon conversion. The final purchase price will be different from the preliminary purchase price presented as the fair value of the equity portion of the Cox Transactions consideration will be based on the fair value of Charter Class A common stock at closing.
| (in millions, except price per share data) | ||||
| Charter Holdings common units issued to Cox Enterprises | 33.6 | |||
| Closing price as of June 30, 2026 | $ | 142.21 | ||
| Estimated fair value of Charter Holdings common units issued to Cox Enterprises | $ | 4,776 | ||
| Estimated fair value of Charter Holdings convertible preferred units issued to Cox Enterprises | 5,378 | |||
| Cash paid to Cox Enterprises | 4,150 | |||
| Total preliminary purchase price | $ | 14,304 | ||
The table below presents the allocation of the preliminary purchase price to the identifiable assets acquired and liabilities assumed at their respective estimated fair values as if the Cox Transactions had closed on June 30, 2026.
| (in millions) | ||||
| Current assets | $ | 1,083 | ||
| Property, plant and equipment | 16,500 | |||
| Customer relationships | 3,600 | |||
| Franchises | 6,525 | |||
| Other noncurrent assets | 669 | |||
| Current liabilities (includes current portion of long-term debt of $1.0 billion) | (2,909 | ) | ||
| Long-term debt | (10,113 | ) | ||
| Deferred income taxes | (585 | ) | ||
| Other long-term liabilities | (466 | ) | ||
| $ | 14,304 | |||
The preliminary estimates are based upon currently available information. As such, additional assets and liabilities may be identified and reflected in the final purchase price allocation.
Upon finalization of the fair value assessment, Charter anticipates the finalized fair values of the net assets acquired will differ from the preliminary assessment outlined above. Generally, changes to the initial estimates of the fair value of the assets acquired and liabilities assumed will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill. If upon completion of the valuations, the fair values are greater or less than the amounts included in the preliminary purchase price allocation above, such a change would not likely have a material impact on the financial position or results of operations of Charter.
6
The following summarizes the pro forma balance sheet adjustments relating to the Cox Transactions:
| (a) | Pro forma adjustment of $158 million to cash and cash equivalents represents the use of cash to pay approximately $151 million of remaining transaction costs not already reflected in the historical financial statements including advisor fees and other expenses directly related to the Cox Transactions, as well as $28 million use of cash to pay debt issuance costs, offset by $21 million source of cash from Cox Enterprises to reflect minimum operating cash of $100 million to be assumed at closing per the Transaction Agreement. Refer to (e) below for sources and uses of cash. |
| (b) | Represents the elimination of the intercompany note receivable from Cox Enterprises not assumed in the Cox Transactions. |
| (c) | For pro forma purposes, preliminary estimates are used for allocations of the purchase price to Cox Communications' property, plant and equipment; customer relationships; and franchises. As of the filing date, Charter has not completed the detailed valuation studies necessary to determine the fair value of Cox Communications' assets to be acquired and liabilities to be assumed, or the related allocations of purchase price. Accordingly, the allocation of purchase price to acquired tangible and intangible assets is based on preliminary fair value estimates and is subject to revision following management's final analysis, with assistance from third-party valuation advisors, upon completion of the Cox transactions. The estimated tangible and intangible asset values and their remaining useful lives may materially change based on information obtained during the acquisition process and circumstances occurring prior to closing. |
| (d) | Represents the write-down of the Cox Communications trade name intangible under the market participant assumption that it will not continue as a market-based intangible. The Spectrum trade name will be used to market or promote the products and services of the combined company across the Cox footprint whereas the Cox Communications trade name will become the name of the combined company within one year of closing the Cox Transactions. |
| (e) | Cox Communications’ debt assumed was adjusted to the most recent available estimated fair value using quoted market values as of June 30, 2026 representing the last business day of the recently completed month. This adjustment resulted in a decrease in long-term debt of approximately $1.3 billion. The fair value adjustment to long-term debt is a result of quoted market values of Cox Communications’ debt being lower than the face amount of the related debt as a result of market interest rates being higher than the stated interest rate of the debt. In acquisition accounting, this results in the recognition of a debt discount that is amortized as an increase to interest expense over the remaining life of the debt. In addition, long-term debt was also adjusted to reflect $4.15 billion new debt raised, less debt issuance costs, to fund the preliminary purchase price of the Cox Transactions. This includes an additional $150 million for Cox Communications’ bond repayment at maturity in June 2025 that is no longer intended to be refinanced before closing of the Cox Transactions. |
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The following table presents pro forma cash sources and uses as a result of the Cox Transactions.
| (in millions) | ||||
| Sources: | ||||
| Proceeds from issuance of long-term debt | $ | 4,150 | ||
| Cox Communications cash and cash equivalents assumed | 79 | |||
| Cox Enterprises cash contributed to reflect minimum operating cash | 21 | |||
| Charter cash and cash equivalents on-hand | 79 | |||
| $ | 4,329 | |||
| Uses: | ||||
| Cash portion of purchase price paid to Cox Enterprises | $ | 4,150 | ||
| Remaining transaction costs including advisor fees and other expenses | 151 | |||
| Debt issuance costs | 28 | |||
| $ | 4,329 | |||
| (f) | For pro forma purposes, deferred taxes are presented dependent on the anticipated tax treatment for the Contribution and the Equity Sale components of the Cox Transactions. The Contribution is treated as a nontaxable partnership contribution and no Charter deferred taxes are assumed to be recorded in purchase accounting as the excess book basis of net assets contributed is associated with the noncontrolling interest partner, Cox Enterprises, and not the controlling interest partner, Charter. The Equity Sale is treated as a taxable stock acquisition and the tax attributes of the Cox Communications subsidiaries acquired are assumed to carry over to Charter and net deferred tax liabilities of $585 million are estimated to be recorded in purchase accounting reflecting historical temporary difference of these subsidiaries contemplating additional book step-up and applying an estimated tax rate of 25%. Lastly, on the relative ownership adjustment of Charter Holdings, a $1.0 billion reduction in deferred tax liabilities is estimated for the carrying value adjustment to Charter’s common units held in Charter Holdings applying an estimated tax rate of 25%. Refer to (h) below on relative ownership adjustment to shareholders’ equity. |
| (g) | Pro forma adjustments to controlling interests and noncontrolling interests in shareholders’ equity are reflected as follows. |
| (in millions) | ||||
| Controlling Interests: | ||||
| Elimination of Cox Communications’ historical equity | $ | (11,858 | ) | |
| Payment of remaining transaction costs including advisor fees | (151 | ) | ||
| Relative ownership adjustment of Charter Holdings’ common unit equity balances, net of tax | (3,101 | ) | ||
| $ | (15,110 | ) | ||
| Noncontrolling Interests: | ||||
| Estimated fair value of Charter Holdings common units issued to Cox Enterprises | $ | 4,776 | ||
| Estimated fair value of Charter Holdings convertible preferred units issued to Cox Enterprises | 5,378 | |||
| Relative ownership adjustment of Charter Holdings’ common unit equity balances | 4,135 | |||
| $ | 14,289 | |||
The Charter Holdings common units issued to Cox Enterprises as a portion of the consideration for the Contribution initially are measured at their fair value of $4.8 billion in accordance with acquisition accounting. However, upon new partner entry to Charter Holdings, the carrying amounts of the common units of the controlling interest (Charter) and noncontrolling interests (Cox Enterprises and A/N) are adjusted to reflect their relative effective common ownership interest in Charter Holdings. Relative ownership adjustment results in an increase to noncontrolling interests of approximately $4.1 billion and a corresponding decrease to additional paid-in capital of $4.1 billion, net of a $1.0 billion reduction in deferred income taxes, for Charter’s decrease in book basis in Charter Holdings.
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Note 2. Cox Transactions Pro Forma Statement of Operations Adjustments
The following summarizes the pro forma statement of operations adjustments relating to the Cox Transactions.
| (a) | Proforma adjustments to revenues of $25 million and $54 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, represent reclassifications of customer revenues treated as contra-expense in Cox Communications historical financials in order to conform to Charter’s financial statement presentation including i) cash collected from customers to recover collection costs reclassed from operating costs and expenses, ii) cash collected from customers for unreturned equipment fees reclassed from other operating expenses, net, and iii) real estate sublease income reclassed from other expenses, net. |
| (b) | Pro forma adjustments to operating costs and expenses of $106 million and $222 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, represents costs related to excluded parent company obligations and intercompany cost allocations from Cox Enterprises that are to be terminated by Cox Communications at the closing in connection with the Transaction Agreement. Following the closing, these costs will not be incurred by Charter. Pro forma adjustments to operating costs and expenses also includes the reclassification of customer revenues treated as contra-expense in Cox Communications historical financials in order to conform to Charter’s financial statement presentation. See Note 2(a). |
| (c) | Depreciation and amortization increased by $243 million and $505 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, as follows. |
| (in millions) | Six Months Ended June 30, 2026 | Year Ended December 31, 2025 | ||||||||||||||||||||||
| Depreciation | Amortization | Total | Depreciation | Amortization | Total | |||||||||||||||||||
| Cox Communications pro forma expense based on fair value | $ | 1,031 | $ | 273 | $ | 1,304 | $ | 2,063 | $ | 600 | $ | 2,663 | ||||||||||||
| Cox Communications historical expense | (1,061 | ) | (2,158 | ) | ||||||||||||||||||||
| $ | 243 | $ | 505 | |||||||||||||||||||||
The increase was estimated using a preliminary average remaining useful life of 8 years for property, plant and equipment and 11 years for customer relationships. Property, plant and equipment are depreciated using a straight-line depreciation method. Customer relationships are amortized using an accelerated method (sum of the years’ digits) to reflect the period over which the relationships are expected to generate cash flows. Following the acquisition, Cox Communications’ pro forma customer relationships of $3.6 billion would result in amortization expense under the accelerated method of $600 million for year 1, $545 million for year 2, $491 million for year 3, $436 million for year 4, $382 million for year 5 and $1.1 billion thereafter. The effect of a one-year decrease in the weighted average useful lives of property, plant and equipment and customer relationships would be an increase to depreciation and amortization expense of approximately $169 million and $349 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, while the effect of a one-year increase would result in a decrease of approximately $133 million and $275 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively. The pro forma adjustments are based on current estimates and may not reflect actual depreciation and amortization once the purchase price allocation is finalized and final determination of remaining useful lives are made.
| (d) | Pro forma adjustment to increase other operating expenses, net by $162 million for the year ended December 31, 2025 primarily represents the payment of remaining transaction costs not already reflected in the historical financial statements including advisor fees and other expenses directly related to the Cox Transactions. Transaction costs of $23 million and $128 million are included in the historical income statement of Charter within other operating expenses, net for the six months ended June 30, 2026 and year ended December 31, 2025, respectively. Pro forma adjustments to other operating expenses, net for the six months ended June 30, 2026 and year ended December 31, 2025 also includes the reclassification of customer revenues treated as contra-expense in Cox Communications historical financials in order to conform to Charter’s financial statement presentation. See Note 2(a). |
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| (e) | Interest expense, net increased by $278 million and $573 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, as follows. |
| Six Months Ended | Year Ended | |||||||
| (in millions) | June 30, 2026 | December 31, 2025 | ||||||
| Additional interest expense on new debt issued | $ | (138 | ) | $ | (275 | ) | ||
| Elimination of intercompany note interest income | (84 | ) | (188 | ) | ||||
| Amortization of discount as a result of adjusting assumed Cox Communications’ long-term debt to fair value | (59 | ) | (118 | ) | ||||
| Amortization of new debt issuance costs | (1 | ) | (2 | ) | ||||
| Elimination of amortization related to Cox Communications’ debt discounts and debt issuance costs | 4 | 10 | ||||||
| $ | (278 | ) | $ | (573 | ) | |||
| (f) | Pro forma adjustment to increase other expenses, net by $32 million and $30 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, primarily represents the elimination of the Cox Enterprises allocated non-service component of pension benefit. Following the closing, these pension benefits will not be incurred by Charter. Pro forma adjustments to other expenses, net also includes the reclassification of customer revenues treated as contra-expense in Cox Communications historical financials in order to conform to Charter’s financial statement presentation. See Note 2(a). |
| (g) | The pro forma adjustment to income tax expense of $327 million and $432 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, was determined by removing Cox Communications’ income tax expense and applying an estimated Charter tax rate of 25% to pro forma income before taxes allocated to Charter after the allocation of profits to the noncontrolling interest holders. |
| (h) | Net income attributable to noncontrolling interest increased by $1.0 billion and $401 million for the six months ended June 30, 2026 and year ended December 31, 2025, respectively, as shown in the following table. All ownership amounts are calculated using whole numbers; minor differences may exist due to rounding. |
| Six Months Ended | Year Ended | |||||||
| (in millions) | June 30, 2026 | December 31, 2025 | ||||||
| Charter Holdings pro forma income before income taxes | $ | 4,515 | $ | 3,044 | ||||
| Charter Holdings 6.875% cash dividend to Cox Enterprises preferred unit holders | (207 | ) | (413 | ) | ||||
| Charter Holdings pro forma income before income taxes available for allocation to common unit holders | $ | 4,308 | $ | 2,631 | ||||
| Noncontrolling interest in Charter Holdings excluding preferred units based on pro forma common unit ownership of Charter Holdings (20.0% Cox Enterprises and 9.2% A/N) | 29.2 | % | 29.2 | % | ||||
| Noncontrolling interest expense - Charter Holdings common units | $ | 1,256 | $ | 767 | ||||
| Noncontrolling interest expense - Charter Holdings convertible preferred units | 207 | 413 | ||||||
| Eliminate historical noncontrolling interest expense recorded based on historical A/N common unit ownership of Charter Holdings | (432 | ) | (779 | ) | ||||
| $ | 1,031 | $ | 401 | |||||
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| (i) | The following table sets forth the computation of pro forma basic and diluted earnings per share for the six months ended June 30, 2026 and year ended December 31, 2025. Not included in the computation of pro forma diluted earnings per share because the effect would be anti-dilutive are the 33.6 million Charter Holdings common units for the six months ended June 30, 2026 and year ended December 31, 2025 and the 12.6 billion equivalent common units for the Charter Holdings convertible preferred units ($6.0 billion par value divided by $477.41 initial conversion price) issued to Cox Enterprises on an if-converted, if-exchanged basis for the year ended December 31, 2025. |
| Six Months Ended | Year Ended | |||||||
| (in millions, except per share data) | June 30, 2026 | December 31, 2025 | ||||||
| Numerator: | ||||||||
| Pro forma net income attributable to common stock | $ | 2,198 | $ | 1,376 | ||||
| Effect of dilutive securities: | ||||||||
| Charter Holdings convertible preferred units | 207 | — | ||||||
| Pro forma net income attributable to common stock after assumed conversions | $ | 2,405 | $ | 1,376 | ||||
| Denominator: | ||||||||
| Pro forma Charter weighted average shares outstanding, basic | 123 | 135 | ||||||
| Effect of dilutive securities: | ||||||||
| Assumed exercise or issuance of shares relating to stock plans | 1 | 3 | ||||||
| Weighted average Charter Holdings convertible preferred units | 13 | — | ||||||
| Pro forma weighted average common shares outstanding, diluted | 137 | 138 | ||||||
| Pro forma net income per share attributable to common stock: | ||||||||
| Basic | $ | 17.87 | $ | 10.19 | ||||
| Diluted | $ | 17.59 | $ | 10.00 | ||||
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