EX-99.2 4 tm2523679d3_ex99-2.htm EXHIBIT 99.2

 

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, 2025 and for the year ended December 31, 2024 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, 2025 for the unaudited pro forma condensed combined balance sheet and as of January 1, 2024 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 $500 million in cash and (ii) issue to Cox Enterprises Charter Holdings convertible preferred units 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 and six months ended June 30, 2025 contained in Charter’s Quarterly Report on Form 10-Q filed with the SEC on July 25, 2025, (ii) the unaudited consolidated financial statements of Cox Communications as of and for the three and six months ended June 30, 2025 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, 2024 contained in Charter’s Annual Report on Form 10-K filed with the SEC on January 31, 2025, and (iv) the audited consolidated financial statements of Cox Communications as of and for the year ended December 31, 2024 contained in Charter’s definitive proxy statement with respect to the Cox Transactions, filed by Charter on July 2, 2025.

 

1

 

 

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, 2025

(dollars in millions)

 

   Charter
(Historical)		   Cox
Communications
(Historical)		   Pro Forma
Adjustments		     Pro Forma
Combined		 
ASSETS                      
CURRENT ASSETS:                      
Cash and cash equivalents  $606   $83   $(224) 1a  $465 
Accounts receivable, net   3,549    601    —      4,150 
Amounts due from Cox Enterprises, Inc.   —    3,907    (3,907) 1b   — 
Prepaid expenses and other current assets   657    346    —      1,003 
Total current assets   4,812    4,937    (4,131)     5,618 
                       
INVESTMENT IN CABLE PROPERTIES:                      
Property, plant and equipment, net   44,187    12,440    1,560  1c   58,187 
Customer relationships, net   672    502    2,998 1c   4,172 
Franchises   67,468    15,879    — 1c   83,347 
Goodwill   29,674    1,260    (1,260) 1c   29,674 
Total investment in cable properties, net   142,001    30,081    3,298      175,380 
                       
OTHER NONCURRENT ASSETS   4,776    997    (351) 1d   5,422 
                       
Total assets  $151,589   $36,015   $(1,184)    $186,420 
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
CURRENT LIABILITIES:                      
Accounts payable, accrued and other current liabilities  $12,007   $1,857   $—     $13,864 
Current portion of long-term debt   2,549    37    —      2,586 
Total current liabilities   14,556    1,894    —      16,450 
                       
LONG-TERM DEBT   91,863    12,484    2,793  1e   107,140 
EQUIPMENT INSTALLMENT PLAN FINANCING FACILITY   1,306    —    —      1,306 
DEFERRED INCOME TAXES   18,757    5,440    (4,606) 1f   19,591 
OTHER LONG-TERM LIABILITIES   4,739    835    (387) 1g   5,187 
                       
SHAREHOLDERS’ EQUITY:                      
Controlling interests   16,209    15,362    (15,410) 1h   16,161 
Noncontrolling interests   4,159    —    16,426  1h   20,585 
Total shareholders’ equity   20,368    15,362    1,016      36,746 
                       
Total liabilities and shareholders’ equity  $151,589   $36,015   $(1,184)    $186,420 

 

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, 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  $27,501   $6,323   $—     $33,824 
                       
COSTS AND EXPENSES:                      
Operating costs and expenses (exclusive of items shown separately below)   16,424    3,802    (130)2a    20,096 
Depreciation and amortization   4,357    1,095    45 2b    5,497 
Other operating expenses, net   204    56    —      260 
    20,985    4,953    (85)     25,853 
Income from operations   6,516    1,370    85      7,971 
                       
OTHER INCOME (EXPENSES):                      
Interest expense, net   (2,504)   (219)   (251)2d    (2,974)
Other expenses, net   (249)   (41)   8 2e    (282)
    (2,753)   (260)   (243)     (3,256)
                       
Income before income taxes   3,763    1,110    (158)     4,715 
Income tax expense   (859)   (234)   251 2f    (842)
Consolidated net income   2,904    876    93      3,873 
Less: Net income attributable to noncontrolling interests   (386)   —    (1,019)2g    (1,405)
Net income attributable to Charter shareholders  $2,518   $876   $(926)    $2,468 
                       
EARNINGS PER COMMON SHARE:                      
Basic  $18.00           2h   $17.63 
Diluted  $17.59           2h   $17.24 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:                      
Basic   140           2h    140 
Diluted   143           2h    143 

 

See accompanying “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”

 

4

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2024

(dollars and weighted average shares outstanding in millions, except per share amounts)

 

    Charter (Historical)     Cox Communications (Historical)     Pro Forma Adjustments       Pro Forma
Combined		  
REVENUES   $ 55,085     $ 13,073     $ —       $ 68,158  
                                   
COSTS AND EXPENSES:                                  
Operating costs and expenses (exclusive of items shown separately below)     33,167       8,134       (279 ) 2a     41,022  
Depreciation and amortization     8,673       2,183       150   2b     11,006  
Other operating expenses, net     127       206       214   2c     547  
      41,967       10,523       85         52,575  
Income from operations     13,118       2,550       (85 )       15,583  
                                   
OTHER INCOME (EXPENSES):                                  
Interest expense, net     (5,229 )     (373 )     (529 ) 2d     (6,131)  
Other expenses, net     (387 )     (2 )     26   2e     (363)  
      (5,616 )     (375 )     (503 )       (6,494)  
                                   
Income before income taxes     7,502       2,175       (588 )       9,089  
Income tax expense     (1,649 )     (450 )     540   2f     (1,559)  
Consolidated net income     5,853       1,725       (48 )       7,530  
Less: Net income attributable to noncontrolling interests     (770 )     —       (1,948 ) 2g     (2,718)  
Net income attributable to Charter shareholders   $ 5,083     $ 1,725     $ (1,996 )     $ 4,812  
                                   
EARNINGS PER COMMON SHARE:                                  
Basic   $ 35.53                   2h   $ 33.64  
Diluted   $ 34.97                   2h   $ 33.10  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:                                  
Basic     143                   2h     143  
Diluted     145                   2h     145  

 

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 $20.6 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 $269.36 closing price of Charter Class A common stock on July 31, 2025, 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 July 31, 2025  $269.36 
Estimated fair value of Charter Holdings common units issued to Cox Enterprises  $9,047 
Estimated fair value of Charter Holdings convertible preferred units issued to Cox Enterprises   7,600 
Cash paid to Cox Enterprises   4,000 
Total preliminary purchase price  $20,647 

 

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, 2025.

 

(in millions)    
Current assets  $1,047 
Property, plant and equipment   14,000 
Customer relationships   3,500 
Franchises   15,879 
Other noncurrent assets   646 
Current liabilities   (1,894)
Long-term debt   (11,304)
Deferred income taxes   (779)
Other long-term liabilities   (448)
   $20,647 

 

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 $224 million to cash and cash equivalents represents $17 million source of cash from Cox Enterprises to reflect minimum operating cash of $100 million to be assumed at closing per the Transaction Agreement, offset by the use of cash to pay approximately $214 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 $27 million use of cash to pay debt issuance costs. 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 the purchase price allocations to Cox Communications’ property, plant and equipment; customer relationships and franchises. As of the date of this proxy statement, Charter has not completed the detailed valuation studies necessary to arrive at the required estimates of the fair value of Cox Communications’ assets to be acquired and liabilities to be assumed and the related allocations of purchase price. Therefore, the allocation of the purchase price to acquired intangible assets is based on preliminary fair value estimates and is subject to final management analysis, with the assistance of third-party valuation advisors, following the completion of the Cox Transactions. The estimated intangible asset values and their remaining useful lives could be affected by a variety of factors that may become known to Charter only upon access to additional information and/or changes in these factors that may occur 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 July 31, 2025. This adjustment resulted in a decrease in long-term debt of approximately $1.2 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. The quoted market value of a debt instrument is lower than the face amount of the debt when the market interest rates are 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 $4.0 billion new debt raised to fund the preliminary purchase price 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  $4,000 
Cox Communications cash and cash equivalents assumed   83 
Cox Enterprises cash contributed to reflect minimum operating cash   17 
Charter cash and cash equivalents on-hand   141 
   $4,241 
Uses:     
Cash portion of purchase price paid to Cox Enterprises  $4,000 
Remaining transaction costs including advisor fees and other expenses   214 
Debt issuance costs   27 
   $4,241 

 

7

 

 

(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 non-taxable 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 $779 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, $55 million in deferred tax liabilities are 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)Represents the elimination of an executive supplemental deferred compensation plan liability not assumed in the Cox Transactions.

 

(h)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  $(15,362)
Payment of remaining transaction costs including advisor fees   (214)
Relative ownership adjustment of Charter Holdings’ common unit equity balances, net of tax   166 
   $(15,410)
      
Noncontrolling Interests:     
Fair value of the Charter Holdings common units issued to Cox Enterprises  $9,047 
Fair value of the Charter Holdings convertible preferred units issued to Cox Enterprises   7,600 
Relative ownership adjustment of Charter Holdings’ common unit equity balances   (221)
   $16,426 

 

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 $9.0 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 a decrease to noncontrolling interests of approximately $221 million and a corresponding increase to additional paid-in capital of $221 million, net of $55 million of deferred income taxes, for Charter’s increase 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)Pro forma adjustments to operating costs and expenses of $130 million and $279 million for the six months ended June 30, 2025 and year ended December 31, 2024, 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.

 

(b)Depreciation and amortization increased by $45 million and $150 million for the six months ended June 30, 2025 and year ended December 31, 2024, respectively, as follows.

 

8

 

 

  Six Months Ended June 30, 2025   Year Ended December 31, 2024 
(in millions)   Depreciation   Amortization   Total   Depreciation   Amortization   Total 
Cox Communications pro forma expense based on fair value  $875   $265   $1,140   $1,750   $583   $2,333 
Cox Communications historical expense             (1,095)             (2,183)
             $45             $150 

 

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 $3.5 billion would result in amortization expense under the accelerated method of $583 million for year 1, $530 million for year 2, $477 million for year 3, $424 million for year 4, $371 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 $146 million and $303 million for the six months ended June 30, 2025 and year ended December 31, 2024, respectively, while the effect of a one-year increase would result in a decrease of approximately $116 million and $239 million for the six months ended June 30, 2025 and year ended December 31, 2024, 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.

 

(c)Pro forma adjustment to increase other operating expenses, net by $214 million for the year ended December 31, 2024 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 $42 million are included in the historical income statement of Charter within other operating expenses, net for the six months ended June 30, 2025.

 

(d)Interest expense, net increased by $251 million and $529 million for the six months ended June 30, 2025 and year ended December 31, 2024, respectively, as follows.

 

(in millions)  Six Months Ended
June 30, 2025		   Year Ended
December 31, 2024		 
Additional interest expense on new debt issued  $(120)  $(239)
Elimination of intercompany note interest income   (90)   (209)
Amortization of discount as a result of adjusting assumed Cox Communications’ long-term debt to fair value   (45)   (91)
Amortization of new debt issuance costs   (1)   (2)
Elimination of amortization related to Cox Communications’ debt discounts and debt issuance costs   5    12 
   $(251)  $(529)

 

(e)Pro forma adjustment to reduce other expenses, net by $8 million and $26 million for the six months ended June 30, 2025 and year ended December 31, 2024, respectively, primarily represents the elimination of the Cox Enterprises allocated non-service cost component of pension expense. Following the closing, these pension costs will not be incurred by Charter.

 

(f)The pro forma adjustment to income tax expense of $251 million and $540 million for the six months ended June 30, 2025 and year ended December 31, 2024, 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.

 

(g)Net income attributable to noncontrolling interest increased by $1.0 billion and $1.9 billion for the six months ended June 30, 2025 and year ended December 31, 2024, respectively, as shown in the following table. All ownership amounts are calculated using whole numbers; minor differences may exist due to rounding.

 

9

 

 

(in millions)  Six Months Ended
June 30, 2025		   Year Ended
December 31, 2024		 
Charter Holdings pro forma income before income taxes  $4,715   $9,089 
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  $4,508   $8,676 
Noncontrolling interest in Charter Holdings excluding preferred units based on pro forma common unit ownership of Charter Holdings (18.1% Cox Enterprises and 8.5% A/N)   26.6%   26.6%
Noncontrolling interest expense - Charter Holdings common units  $1,198   $2,305 
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   (386)   (770)
   $1,019   $1,948 

 

(h)The following table sets forth the computation of pro forma basic and diluted earnings per share for the six months ended June 30, 2025 and year ended December 31, 2024. 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)  Six Months Ended
June 30, 2025		   Year Ended
December 31, 2024		 
Numerator:          
Pro forma net income attributable to common stock  $2,468   $4,812 
           
Denominator:          
Pro forma Charter weighted average shares outstanding (basic)   140    143 
Effect of dilutive securities:          
Assumed exercise or issuance of shares relating to stock plans   3    2 
Pro forma weighted average common shares outstanding, diluted   143    145 
           
Pro forma net income per share attributable to common stock:          
Basic  $17.63   $33.64 
Diluted  $17.24   $33.10 

 

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