Exhibit 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed combined financial statements as of and for the three months ended March 31, 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 March 31, 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.
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 months ended March 31, 2026 contained in Charter’s Quarterly Report on Form 10-Q filed with the SEC on April 24, 2026, (ii) the unaudited consolidated financial statements of Cox Communications as of and for the three months ended March 31, 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 this Current Report on Form 8-K.
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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.
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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2026
(dollars in millions)
| Charter (Historical) | Cox Communications (Historical) | Pro Forma Adjustments | Pro Forma Combined | ||||||||||||||
| ASSETS | |||||||||||||||||
| CURRENT ASSETS: | |||||||||||||||||
| Cash and cash equivalents | $ | 517 | $ | 84 | $ | (154 | ) | 1a | $ | 447 | |||||||
| Accounts receivable, net | 3,510 | 650 | — | 4,160 | |||||||||||||
| Amounts due from Cox Enterprises, Inc. | — | 4,154 | (4,154 | ) | 1b | — | |||||||||||
| Prepaid expenses and other current assets | 933 | 355 | — | 1,288 | |||||||||||||
| Total current assets | 4,960 | 5,243 | (4,308 | ) | 5,895 | ||||||||||||
| INVESTMENT IN CABLE PROPERTIES: | |||||||||||||||||
| Property, plant and equipment, net | 47,198 | 12,534 | 3,966 | 1c | 63,698 | ||||||||||||
| Customer relationships, net | 324 | 485 | 3,115 | 1c | 3,924 | ||||||||||||
| Franchises | 67,471 | 10,275 | (3,800 | ) | 1c | 73,946 | |||||||||||
| Goodwill | 29,710 | 1,260 | (1,260 | ) | 1c | 29,710 | |||||||||||
| Total investment in cable properties, net | 144,703 | 24,554 | 2,021 | 171,278 | |||||||||||||
| OTHER NONCURRENT ASSETS | 4,981 | 991 | (351 | ) | 1d | 5,621 | |||||||||||
| Total assets | $ | 154,644 | $ | 30,788 | $ | (2,638 | ) | $ | 182,794 | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||
| CURRENT LIABILITIES: | |||||||||||||||||
| Accounts payable, accrued and other current liabilities | $ | 12,375 | $ | 1,804 | $ | — | $ | 14,179 | |||||||||
| Current portion of long-term debt | — | 1,042 | — | 1,042 | |||||||||||||
| Total current liabilities | 12,375 | 2,846 | — | 15,221 | |||||||||||||
| LONG-TERM DEBT | 94,414 | 11,464 | 2,780 | 1e | 108,658 | ||||||||||||
| EQUIPMENT INSTALLMENT PLAN FINANCING FACILITY | 1,596 | — | — | 1,596 | |||||||||||||
| DEFERRED INCOME TAXES | 20,049 | 4,545 | (4,896 | ) | 1f | 19,698 | |||||||||||
| OTHER LONG-TERM LIABILITIES | 5,140 | 454 | — | 5,594 | |||||||||||||
| SHAREHOLDERS’ EQUITY: | |||||||||||||||||
| Controlling interests | 16,385 | 11,479 | (14,456 | ) | 1g | 13,408 | |||||||||||
| Noncontrolling interests | 4,685 | — | 13,934 | 1g | 18,619 | ||||||||||||
| Total shareholders’ equity | 21,070 | 11,479 | (522 | ) | 32,027 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 154,644 | $ | 30,788 | $ | (2,638 | ) | $ | 182,794 | ||||||||
See accompanying “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”
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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2026
(dollars and weighted average shares outstanding in millions, except per share amounts)
| Charter (Historical) | Cox Communications (Historical) | Pro Forma Adjustments | Pro Forma Combined | ||||||||||||||
| REVENUES | $ | 13,597 | $ | 3,059 | $ | 13 | 2a | $ | 16,669 | ||||||||
| COSTS AND EXPENSES: | |||||||||||||||||
| Operating costs and expenses (exclusive of items shown separately below) | 8,163 | 1,740 | (52 | ) | 2b | 9,851 | |||||||||||
| Depreciation and amortization | 2,211 | 538 | 114 | 2c | 2,863 | ||||||||||||
| Other operating expenses, net | 15 | 46 | 2 | 2d | 63 | ||||||||||||
| 10,389 | 2,324 | 64 | 12,777 | ||||||||||||||
| Income from operations | 3,208 | 735 | (51 | ) | 3,892 | ||||||||||||
| OTHER INCOME (EXPENSES): | |||||||||||||||||
| Interest expense, net | (1,256 | ) | (111 | ) | (137 | ) | 2e | (1,504 | ) | ||||||||
| Other expenses, net | (124 | ) | 16 | (17 | ) | 2f | (125 | ) | |||||||||
| (1,380 | ) | (95 | ) | (154 | ) | (1,629 | ) | ||||||||||
| Income before income taxes | 1,828 | 640 | (205 | ) | 2,263 | ||||||||||||
| Income tax expense | (465 | ) | (138 | ) | 159 | 2g | (444 | ) | |||||||||
| Consolidated net income | 1,363 | 502 | (46 | ) | 1,819 | ||||||||||||
| Less: Net income attributable to noncontrolling interests | (200 | ) | — | (520 | ) | 2h | (720 | ) | |||||||||
| Net income attributable to Charter shareholders | $ | 1,163 | $ | 502 | $ | (566 | ) | $ | 1,099 | ||||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||
| Basic | $ | 9.27 | 2i | $ | 8.79 | ||||||||||||
| Diluted | $ | 9.17 | 2i | $ | 8.70 | ||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||
| Basic | 125 | 2i | 125 | ||||||||||||||
| Diluted | 127 | 2i | 127 | ||||||||||||||
See accompanying “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”
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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)
| Charter (Historical) | Cox Communications (Historical) | Pro Forma Adjustments | Pro Forma 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 | 153 | 2d | 761 | ||||||||||||
| 41,866 | 15,497 | 436 | 57,799 | ||||||||||||||
| Income (loss) from operations | 12,908 | (2,966 | ) | (382 | ) | 9,560 | |||||||||||
| OTHER INCOME (EXPENSES): | |||||||||||||||||
| Interest expense, net | (5,042 | ) | (424 | ) | (568 | ) | 2e | (6,034 | ) | ||||||||
| Other expenses, net | (408 | ) | (30 | ) | (30 | ) | 2f | (468 | ) | ||||||||
| (5,450 | ) | (454 | ) | (598 | ) | (6,502 | ) | ||||||||||
| Income (loss) before income taxes | 7,458 | (3,420 | ) | (980 | ) | 3,058 | |||||||||||
| Income tax expense | (1,692 | ) | 772 | 425 | 2g | (495 | ) | ||||||||||
| Consolidated net income (loss) | 5,766 | (2,648 | ) | (555 | ) | 2,563 | |||||||||||
| Less: Net income attributable to noncontrolling interests | (779 | ) | — | (388 | ) | 2h | (1,167 | ) | |||||||||
| Net income (loss) attributable to Charter shareholders | $ | 4,987 | $ | (2,648 | ) | $ | (943 | ) | $ | 1,396 | |||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||
| Basic | $ | 36.90 | 2i | $ | 10.34 | ||||||||||||
| Diluted | $ | 36.21 | 2i | $ | 10.15 | ||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||
| Basic | 135 | 2i | 135 | ||||||||||||||
| Diluted | 138 | 2i | 138 | ||||||||||||||
See accompanying “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”
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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 most recently completed month. The Charter Holdings convertible preferred units fair value estimate is based on an initial preferred instrument multiple above the $6.0 billion aggregate liquidation preference contemplating a 6.875% preferred cash dividend 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 March 31, 2026.
| (in millions) | ||||
| Current assets | $ | 1,105 | ||
| Property, plant and equipment | 16,500 | |||
| Customer relationships | 3,600 | |||
| Franchises | 6,475 | |||
| Other noncurrent assets | 640 | |||
| Current liabilities (includes current portion of long-term debt of $1.0 billion) | (2,846 | ) | ||
| Long-term debt | (10,122 | ) | ||
| Deferred income taxes | (594 | ) | ||
| Other long-term liabilities | (454 | ) | ||
| $ | 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.
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The following summarizes the pro forma balance sheet adjustments relating to the Cox Transactions:
| (a) | Pro forma adjustment of $154 million to cash and cash equivalents represents the use of cash to pay approximately $142 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 $16 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 most 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’ repayment of bond at maturity in June 2025 that they no longer intend to refinance before closing of the Cox Transactions. |
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 | 84 | |||
| Cox Enterprises cash contributed to reflect minimum operating cash | 16 | |||
| Charter cash and cash equivalents on-hand | 70 | |||
| $ | 4,320 | |||
| Uses: | ||||
| Cash portion of purchase price paid to Cox Enterprises | $ | 4,150 | ||
| Remaining transaction costs including advisor fees and other expenses | 142 | |||
| Debt issuance costs | 28 | |||
| $ | 4,320 | |||
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| (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 $594 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 $945 million 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 | $ | (11,479 | ) | |
| Payment of remaining transaction costs including advisor fees | (142 | ) | ||
| Relative ownership adjustment of Charter Holdings’ common unit equity balances, net of tax | (2,835 | ) | ||
| $ | (14,456 | ) | ||
| Noncontrolling Interests: | ||||
| Fair value of the Charter Holdings common units issued to Cox Enterprises | $ | 4,776 | ||
| Fair value of the Charter Holdings convertible preferred units issued to Cox Enterprises | 5,378 | |||
| Relative ownership adjustment of Charter Holdings’ common unit equity balances | 3,780 | |||
| $ | 13,934 | |||
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 $3.8 billion and a corresponding decrease to additional paid-in capital of $3.8 billion, net of a $945 million reduction in deferred income taxes, for Charter’s decrease in book basis in Charter Holdings.
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 $13 million and $54 million for the three months ended March 31, 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 $52 million and $222 million for the three months ended March 31, 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). |
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| (c) | Depreciation and amortization increased by $114 million and $505 million for the three months ended March 31, 2026 and year ended December 31, 2025, respectively, as follows. |
| Three Months Ended March 31, 2026 | Year Ended December 31, 2025 | ||||||||||||||||||||||
| (in millions) | Depreciation | Amortization | Total | Depreciation | Amortization | Total | |||||||||||||||||
| Cox Communications pro forma expense based on fair value | $ | 516 | $ | 136 | $ | 652 | $ | 2,063 | $ | 600 | $ | 2,663 | |||||||||||
| Cox Communications historical expense | (538 | ) | (2,158 | ) | |||||||||||||||||||
| $ | 114 | $ | 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 $85 million and $349 million for the three months ended March 31, 2026 and year ended December 31, 2025, respectively, while the effect of a one-year increase would result in a decrease of approximately $67 million and $275 million for the three months ended March 31, 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 $153 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 $15 million and $128 million are included in the historical income statement of Charter within other operating expenses, net for the three months ended March 31, 2026 and year ended December 31, 2025, respectively. Pro forma adjustments to other operating expenses, net for the three months ended March 31, 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). |
| (e) | Interest expense, net increased by $137 million and $568 million for the three months ended March 31, 2026 and year ended December 31, 2025, respectively, as follows. |
| (in millions) | Three
Months Ended March 31, 2026 | Year
Ended December 31, 2025 | ||||||
| Additional interest expense on new debt issued | $ | (68 | ) | $ | (270 | ) | ||
| Elimination of intercompany note interest income | (41 | ) | (188 | ) | ||||
| Amortization of discount as a result of adjusting assumed Cox Communications’ long-term debt to fair value | (29 | ) | (118 | ) | ||||
| Amortization of new debt issuance costs | (1 | ) | (2 | ) | ||||
| Elimination of amortization related to Cox Communications’ debt discounts and debt issuance costs | 2 | 10 | ||||||
| $ | (137 | ) | $ | (568 | ) | |||
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| (f) | Pro forma adjustment to increase other expenses, net by $17 million and $30 million for the three months ended March 31, 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 $159 million and $425 million for the three months ended March 31, 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 $520 million and $388 million for the three months ended March 31, 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. |
| (in millions) | Three
Months Ended March 31, 2026 | Year
Ended December 31, 2025 | ||||||
| Charter Holdings pro forma income before income taxes | $ | 2,263 | $ | 3,058 | ||||
| Charter Holdings 6.875% cash dividend to Cox Enterprises preferred unit holders | (103 | ) | (413 | ) | ||||
| Charter Holdings pro forma income before income taxes available for allocation to common unit holders | $ | 2,160 | $ | 2,645 | ||||
| Noncontrolling interest in Charter Holdings excluding preferred units based on pro forma common unit ownership of Charter Holdings (19.5% Cox Enterprises and 9.0% A/N) | 28.5 | % | 28.5 | % | ||||
| Noncontrolling interest expense - Charter Holdings common units | $ | 617 | $ | 754 | ||||
| Noncontrolling interest expense - Charter Holdings convertible preferred units | 103 | 413 | ||||||
| Eliminate historical noncontrolling interest expense recorded based on historical A/N common unit ownership of Charter Holdings | (200 | ) | (779 | ) | ||||
| $ | 520 | $ | 388 | |||||
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| (i) | The following table sets forth the computation of pro forma basic and diluted earnings per share for the three months ended March 31, 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 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. |
| (in millions, except per share data) | Three
Months Ended March 31, 2026 | Year
Ended December 31, 2025 | ||||||
| Numerator: | ||||||||
| Pro forma net income attributable to common stock | $ | 1,099 | $ | 1,396 | ||||
| Denominator: | ||||||||
| Pro forma Charter weighted average shares outstanding (basic) | 125 | 135 | ||||||
| Effect of dilutive securities: | ||||||||
| Assumed exercise or issuance of shares relating to stock plans | 2 | 3 | ||||||
| Pro forma weighted average common shares outstanding, diluted | 127 | 138 | ||||||
| Pro forma net income per share attributable to common stock: | ||||||||
| Basic | $ | 8.79 | $ | 10.34 | ||||
| Diluted | $ | 8.70 | $ | 10.15 | ||||
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