CHTR 10-K & 10-Q changes, risk factors and insider trading

The industry in which we operate is highly competitive and has become more so in recent years. In some instances, we compete against companies with fewer regulatory burdens, better access to better financing and greater and more favorable brand name recognition. Increasing consolidation in the telecommunications and content industries have provided additional benefits to certain of our competitors, either through access to financing, resources, or efficiencies of scale including the ability to launch new products and services.

Our Internet service faces competition from other companies’ FTTH, cell phone home Internet service, Internet delivered via satellite and DSL services. Various operators offer wireless Internet services delivered over networks which they continue to enhance to deliver faster speeds and also continue to expand 5G mobile services.services as they seek to offer converged connectivity services similar to ours. Our mobile and voice services compete with wireless and wireline phone providers, as well as other forms of communication, such as text, instant messaging, social networking services, video conferencing and email. Competition from these companies, including intensive marketing efforts with aggressive pricing, may have an adverse impact on our ability to attract and retain customers.

Our video service faces competition from a number of sources, including DBS services, and companies that deliver linear network programming, movies and television shows on demand and other video content over broadband Internet connections to televisions, computers, tablets and mobile devices often with password sharing among multiple users and security that makes content susceptible to piracy. Newer products and services, particularly alternative methods for the distribution, sale and viewing of content may continue to be developed, further increasing the number of competitorscompetition that we face.

A failure to effectively anticipate or adapt to new technologies (including those that use artificial intelligence (“AI”)) and changes in customer expectations and behavior could significantly adversely affect our competitive position with respect to the leisure time and discretionary spending of our customers and, as a result, affect our business and results of operations. Competition may also reduce our expected growth of future cash flows which may contribute to future impairments of our franchises and goodwill and our ability to meet cash flow requirements, including debt service requirements. For additional information regarding the competition we face, see “Item 1. Business - Competition” and “Item 1. Business - Regulation and Legislation.”

Our network and information systems are also vulnerable to damage or interruption from power outages, telecommunications failures, accidents, natural disasters (including extreme weather arising from short-term or any long-term changes in weather patterns), terrorist attacks and similar events. Our system redundancy may be ineffective or inadequate, and our disaster recovery planning may not be sufficient for all eventualities.

We process, store, and transmit large amounts of data, including the personal information of our customers. Ongoing increases in the potential for misuse of personal information, the public’s awareness of the importance of safeguarding personal information, and the volume of legislation that has been adopted or is being considered regarding the protection, privacy and security of personal information have resulted in increases to our information-related risks. We could be exposed to significant costs if such risks were to materialize, and such events could damage our reputation, credibility and business and have a negative impact on our revenue. We could be subject to regulatory actions and claims made by consumers in private litigations involving privacy issues related to consumer data collection and use practices. We also could be required to expend significant capital and other resources to remedy any such security breach.

•tariffs areor imposedcomponent thatsupply conditions impact vendors’ ability to perform their obligations or significantly increase the amount we pay;

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

Programming costs are one of our largest expense items. Our programming costs have historically increased in excess of customary inflationary and cost-of-living type increases. While decreases in video customers combined with a change in the mix of customers choosing lower cost packages have offset total programming cost increases, we expect contractual programming rates per service subscriber to continue to increase in excess of customary inflationary and cost-of-living type increases as a result of annual increases pursuant to our programming contracts and contract renewals with programmers. Although we pass along amounts paid for local broadcast station retransmission consent to the majority of our video customers, the inability to fully pass programming cost increases on to our video customers has had, and is expected in the future to have, an adverse impact on our cash flow and operating margins associated with the video product. In order to mitigate impacts to our operating margins due to increasing programming rates, we continue to review our pricing and programming packaging strategies. Further, some programmers have begun to simulcast and/or move popular programming to programmer streaming applications which has created a competitive alternative to our video subscription at lower price points that could, in turn, result in customer losses. We have sought to obtainobtained and will continue to seek to obtain access to many of these programmer streaming applications, where applicable, as we renew agreements, so that we may continue to include these in our customers’ video subscriptions and/or sell to broadband customers for a share of revenue.

We are exposed to risks associated with the economic conditions of our current and potential customers, the potential financial instability of our customers and their financial ability to purchase our products. If there were a prolonged general economic downturn, we may experience increased cancellations or non-payment by our customers or unfavorable changes in the mix of products purchased. This may include an increase in the number of homes that replace their video service with Internet-delivered or over-air content, as well as an increase in the number of Internet and voice customers substituting mobile data and voice products for wireline services, which would negatively impact our ability to attract customers, increase rates and maintain or increase revenue. In addition, our ability to gain new customers is dependent to some extent on growth in occupied housing in our service areas, which is influenced by both national and local economic conditions. Weak economic conditions may also have a negative impact on our advertising revenue. These events have adversely affected us in the past, and may adversely affect our cash flow, results of operations and financial condition ifin a downturnfuture were to continue.downturn.

Our operational results have depended, and our future results will depend, upon the retention and continued performance of our management team. Our ability to hire and retain key employees for management positions could be impacted adversely by the competitive environment for management talent in the broadband communications and technology industries. The loss of the services of key members of management and the inability to hire or delay in hiring new key employees could adversely affect our ability to manage our business and our future operational and financial results.

We have a significant amount of debt and expect to incur significant additional debt, including secured debt, in the future, as well as additional debt in connection with the Cox Transactions and Liberty Broadband Combination, which could adversely affect our financial condition and our ability to react to changes in our business.

We have a significant amount of debtdebt, with total principal amount of approximately $94.6 billion and a leverage ratio of 4.15 times Adjusted EBITDA as of December 31, 2025. We expect to (subject to applicable restrictions in our debt instruments) incur additional debt in the future as Charter maintainsplans to maintain leverage near the midpoint of its stated objective of 4.0 to 4.5 times Adjusted EBITDA target leverage range (net debt divided by the last twelve months Adjusted EBITDA). in the period leading up to the Closing. As part of Decemberthe 31,Cox 2024,Transactions, ourCharter totalwill principalfund the $4.0 billion of cash consideration using debt and will assume Cox Communications' approximately $12.6 billion of net debt and finance leases. Charter plans to adjust its long-term target leverage range after Closing to 3.5 to 3.75 times Adjusted EBITDA but will still have a significant amount of debt was approximately $93.8 billion and Charter's leverage ratio was 4.13 times Adjusted EBITDA.debt.

In addition, it is possible that we may needexpect to incur additional indebtedness in the future, including to refinance and/or in connection with the assumption of indebtedness of Cox Communications and/or its subsidiaries after the completion of the Cox Transactions as well as Liberty Broadband and/or its subsidiaries after the completion of the merger.Liberty Broadband Combination. To the extent our current debt amounts increase more than expected, our operating results are lower than expected, or credit rating agencies downgrade our debt thereby increasing our costs of borrowing and potentially limiting our access to investment grade markets, or significant market disruptions occur, the related risks that we now face will intensify.

Liberty Broadband currently owns a significant amount of Charter Class A common stock and is entitled to certain governance rights with respect to Charter. A/N currently owns Charter Class A common stock and a significant amount of membership interests in our subsidiary, Charter Holdings, which are convertible into Charter Class A common stock, and is entitled to certain governance rights with respect to Charter. Members of Charter’sthe Board of Directors of Charter include a director who is a formeran officer andof Liberty Broadband, a director who is a director of Liberty Broadband and directors who are current or former officers and directors of A/N. Mr. GregMarty MaffeiPatterson is the former President and Chief Executive Officer of Liberty Broadband and Mr. J. David Wargo is a director of Liberty Broadband. Mr. Steven Miron is the Chief Executive Officer of A/N and Mr. Michael Newhouse is co-president of the parent of A/N and its affiliates. As of December 31, 2024,2025, Liberty Broadband beneficially held approximately 28.58%29.22% of Charter’s voting stock and A/N beneficially held approximately 12.40%13.12% of Charter’s voting stock. Pursuant to the Second Amended and Restated Stockholders Agreement among Charter, Liberty Broadband and A/N, dated as of May 23, 2015 (the “Existing Stockholders Agreement”), as amended by Amendment No. 1 to the Second Amended and Restated Stockholders Agreement and the Letter Agreement, dated as of November 12, 2024 (the “Stockholders and Letter Agreement Amendment”), Liberty Broadband currently has the right to designate up to three directors as nominees for Charter’sthe Board of Directors of Charter and A/N currently has the right to designate up to two directors as nominees for Charter’sthe Board of Directors.Directors of Charter. Each of A/N and Liberty Broadband is entitled to nominate at least one director to each of the committees of Charter’sthe Board of Directors,Directors of Charter, subject to applicable stock exchange listing rules and certain specified voting or equity ownership thresholds for each of A/N and Liberty Broadband, and provided that the Nominating and Corporate Governance Committee and the Compensation and Benefits Committee each have at least a majority of directors independentthat fromwere not designated by either A/N,N or Liberty Broadband and Charter (referred to as the “unaffiliated directors” in the Existing Stockholders Agreement).

The Existing Stockholders Agreement and Charter’s amended and restated certificate of incorporation fixesfix the size of the board at 13 directors. Liberty Broadband and A/N are required to vote (subject to the applicable voting cap) their respective shares of Charter Class A common stock and Charter Class B common stock for the director nominees nominated by the Nominating and Corporate Governance Committee, including the respective designees of Liberty Broadband and A/N, and against any other nominees, except that, with respect to the unaffiliated directors, Liberty Broadband and A/N must instead vote in the same proportion as the voting securities are voted by stockholders other than A/N and Liberty Broadband or any group which includes any of them are voted, if doing so would cause a different outcome with respect to the unaffiliated directors. As a result of their rights under the Existing Stockholders Agreement and their significant equity and voting stakes in Charter, Liberty Broadband and/or A/N, who may have interests different from those of other stockholders, will be able to exercise substantial influence over certain matters relating to the governance of Charter, including the approval of significant corporate actions, such as mergers and other business combination transactions.

The services we offer are subject to numerous laws and regulations that can increase operational and administrative expenses and reduce revenues, includingincluding, but not limited to, those covering the following:

•the provision of high-speed Internet service, including regulating the price for low-income customers, network management, broadband label,labeling, broadband availability reporting, digital discrimination and transparency rules;

•the fees that must be included in our advertised prices and bills, and the means by which our customers can cancel servicesbills;

•the provisioning, marketing and billing of cable, telephoneInternet, mobile and Internetvoice equipment;

There are ongoing efforts to amend or expand the federal, state and local regulation of some of the services offered over our cable systems, particularly our retail broadband Internet access service. Potential legislative and regulatory changes could adversely impact our business by increasing our costs and competition and limiting our ability to offer services in a manner that would maximize our revenue potential. These changes have in the past, and could in the future, include, but are not limited to, for example, the reclassification of Internet services as regulated telecommunications services or other utility-style regulation of Internet services; restrictions on how we manage our Internet access services and networks; the adoption of new customer service or service quality requirements for our Internet access services; the adoption of new privacy restrictions on our collection, use and disclosure of certain customer or employee information; new data security and cybersecurity mandates that could result in additional network and information security and cyber incident reporting requirements for our business; new restraints on our discretion over programming decisions; new rules governing broadcast ownership that would result in higher rates for broadcast content; new restrictions on the rates we charge to consumers for one or more of the services or equipment options we offer, including our ability to offer promotions; changes to the cable industry’s compulsory copyright to retransmit broadcast signals; new requirements to assure the availability of navigation devices from third-party providers; new Universal Service Fund contribution obligations on our Internet service revenues that would add to the cost of that service; increases in government-administered broadband subsidies to rural areas that could result in subsidized overbuilding of our facilities; changes to the FCC’s administration of spectrum; and changes in the regulatory framework for VoIP telephone service, including the scope of regulatory obligations associated with our VoIP telephone service and our ability to interconnect our VoIP telephone service with incumbent providers of traditional telecommunications service.

In 2024,September one2025, federalfollowing the Supreme Court of Appeals decision foundthat multiple constitutional violations inupheld the FCC’s system for funding and administering its Universal Service programs.programs, Twoa othernew Courtspetition offor Appealsreview hadwas upheldfiled in the FCC’sFifth rules.Circuit Thechallenging Supremetwo Court has agreed to hear the FCC’s appealsubsections of the adversestatute decision.governing the Universal Service Fund. We cannot predict the outcome of this case or any related actions of the Congress and the FCC, which could adversely affect our receipt of universal service funds, including but not limited to FCC RDOF grants to expand our network, FCC E-rate funds to serve schools and libraries and FCC Rural Health Care funds to serve eligible health care providers.

Our current and past participation in state and federal programs that subsidize network construction in high-cost areas and service to schools or low-income consumers, and the provision of services to government agencies or entities, creates the risk of claims of our failure to adequately comply with the regulatory requirements of those programs or contracts. The FCC,FCC and various state and federal agencies and attorney generals,generals may subject those programs, or other industry practices, to audits and investigations, which could result in enforcement actions, litigation, fines, settlements or reputational harm, and/or operational and financial conditions being placed on us, any of which could adversely affect our results of operations and financial condition.

If any laws or regulations are enacted that would expand the regulation of our services, they could affect our operations and require significant expenditures. We cannot predict future developments in these areas, and any changes to the regulatory framework for our Internet, video,mobile, mobilevideo or VoIPvoice services could have a negative impact on our business and results of operations.

It remains uncertain what rule changes, if any, will ultimately be adopted by Congress, the FCC, the FTC and/or state legislatures,legislatures or state regulatory agencies, and what operating or financial impact any such rules might have on us, including on the operation of our broadband networks, customer privacy and the user experience.

We offer services and operate cable systems in locations throughout the United States and, as a result, we are subject to the tax laws and regulations of federal, state and local governments. From time to time, legislative and administrative bodies change laws and regulations that change our effective tax rate or tax payments. Many of the provisions enacted under the 2017 Tax Cuts and Jobs Act are set to expire at the end of 2025. The Administration and Congress are actively considering various policy choices which may have the impact of changing, possibly materially, how Charter is taxed in comparison to how we are taxed today and potentially in comparison to our competitors. Certain states and localities have imposed or are considering imposing new or additional taxes or fees on our services or changing the methodologies or base on which certain fees and taxes are computed. Potential changes include additional taxes or fees on our services which could impact our customers, changes to income tax sourcing rules and other changes to general business taxes, central/unit-level assessment of property taxes and other matters that could increase our income, franchise, sales, use and/or property tax liabilities. In addition, federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations. ThereFrom time to time authorities challenge our tax positions and there can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge.

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

We cannot assure you that we will be able to comply with all significant provisions of our franchise agreements and certain of our franchisors have from time to time alleged that we have not complied with these agreements. Additionally, although historically we have renewed our franchises without incurring significant costs, we cannot assure youguarantee that we will be able to renew, or to renew as favorably, our franchises in the future. A termination of or a sustained failure to renew a franchise in one or more service areas could adversely affect our business in the affected geographic area.

Our customer commitments focus on reliable connectivity, transparency, exceptional service and always improving. By continually improving our product set and offering consumers the opportunity to save money by switching to our services, we believe we can continue to penetrate our expanding footprint and sell additional products to our existing customers. We see operational benefits from the targeted investments we made in employee wages and benefits to build employee skill sets and tenure, as well as the continued investments in digitization of our customer service platforms, all with the goal of improving the customer experience, reducing transactions and driving customer growth and retention.

Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, other income (expenseexpenses), net and other operating (income) expenses, net, such as special chargescharges, merger and acquisition costs and (gain) loss on sale or retirement of assets. See “—Use of Adjusted EBITDA and Free Cash Flow” for further information on Adjusted EBITDA and free cash flow.

Approximately 90%89% of our revenues for each of the years ended December 31, 20242025 and 20232024 are attributable to monthly subscription fees charged to customers for our Internet, mobile, video, mobile, voice and commercial services as well as regional sports and news channels. Generally, these customer subscriptions may be discontinued by the customer at any time subject to a fee for certain commercial customers. The remaining 10%11% of our revenue is derived primarily from advertising revenues, franchise and other regulatory fee revenues (which are collected by us but then paid to local authorities), sales of mobile and video devices, processing fees or reconnection fees charged to customers to commence or reinstate service, installation, VOD and pay-per-view programming, and commissions related to the sale of merchandise by home shopping services.

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

We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and expected benefits of utilizing loss carryforwards, including indefinite lived carryovers such as the Section 163(j) interest limitation. Valuation allowances are established when management determines that it is more likely than not that some portion or the entire deferred tax asset will not be realized. In evaluating the need for a valuation allowance, management takes into accountconsiders various factors, including the expected level of future taxable income, available tax planning strategies and reversals of existing taxable temporary differences. The impact on deferred taxes of changes in tax rates and tax law, if any, applied to the years during which temporary differences are expected to be settled, are reflected in the consolidated financial statements in the period of enactment. In determining our tax provision for financial reporting purposes, we establish a reserve for uncertain tax positions unless such positions are determined to be “more likely than not” of being sustained upon examination, based on their technical merits. There is considerable judgment involved in making such a determination. We recognize interest and penalties accrued on uncertain income tax positions as part of the income tax provision. See Note 1617 to the accompanying consolidated financial statements contained in “Part II. Item 8. Financial Statements and Supplementary Data” for additional discussion.

A discussion of changes in our results of operations during the year ended December 31, 20232024 compared to the year ended December 31, 20222023 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023,2024, filed with the SEC on FebruaryJanuary 2,31, 2024,2025, which is available free of charge on the SEC's website at www.sec.gov and on Charter's investor relations website at ir.charter.com.

Revenues. Total revenues grewdecreased $478$311 million or 0.9%0.6% during the year ended December 31, 20242025 as compared to 20232024 primarily due to growthlower incustomers, mobilehigher lines,seamless averageentertainment revenue per customerallocation and lower advertising sales, partly offset by lowermobile customers.line growth and higher average revenue per customer.

The increase related to rate and product mix was primarily due to promotional rate step-ups andstep-ups, rate adjustments, partlyand offseta byfavorable retentionchange offersin extendedbundled torevenue customers that previously received an ACP subsidy.allocation. Residential Internet customers decreased by 510,000393,000 in 20242025 compared to 2023.2024.

Residential video customers decreased by 1,176,000255,000 in 20242025 compared to 2023.2024. The increasedecrease related to rate and product mix was primarily due to promotional rate step-ups, video rate adjustments that pass-through programming rate increases and $63 million of customer credits related to the temporary loss of Disney programming in 2023, partly offset by a higher mix of lower priced video packages within our video customer base and costsmore requiredunfavorable bundled revenue allocation, partly offset by accountingpromotional principlesrate tostep-ups beand video rate adjustments that pass-through programming rate increases. Seamless entertainment allocation represents costs allocated to seamlessprogrammer entertainmentstreaming applications and netted within video revenue. The growth is due to more seamless entertainment applications and higher activations.

The increasedecrease in SMBsmall business revenues is attributable to the following (dollars in millions):

SMBSmall business customers decreased by 7,00013,000 in 20242025 compared to 2023.2024.

EnterpriseMid-market & large business revenues increased $113$91 million during the year ended December 31, 20242025 as compared to the corresponding period in 20232024 primarily due to an increase in Internet PSUs. EnterpriseMid-market & large business PSUs increased by 16,00017,000 in 20242025 compared to 2023.2024.

Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors, as well as local cable and advertising on regional sports and news channels. Advertising sales revenues increaseddecreased $229$312 million during the year ended December 31, 20242025 as compared to the corresponding period in 20232024 primarily due to ana increasedecrease in political ad revenue and advanced advertising partly offset by lower local and national ad revenue.

Programming costs were approximately $9.7$8.8 billion and $10.6$9.7 billion for the years ended December 31, 20242025 and 2023,2024, representing 29%27% and 32%29% of total operating costs and expenses, respectively. Programming costs consist primarily of costs paid to programmers for basic, premium, video on demand, and pay-per-view programming. Programming costs decreased as a result of fewer video customers and a higher mix of lower cost video packages within our video customer base and fewer video customers as well as costs required by accounting principles to be allocated to seamless entertainment applications and netted within video revenue, partly offset by contractual rate adjustments, including renewals and increases in amounts paid for retransmission consent as well as a $61 million benefit related to the temporary loss of Disney programming during 2023.consent.

Property taxMarketing and insuranceresidential expensesales increased $192 million during the year ended December 31, 20242025 compared to the corresponding priorperiod periodin 2024 primarily asdue to a result of an adjustmentchange in 2023sales relatedmix to favorablehigher developmentcost onsales prior year workers' compensation claims.channels.

IncomeTransition taxexpenses expense.represent Weincremental recognizedcosts incomeincurred taxto expenseprepare for the integration of $1.6 billion for both the yearsCox endedTransactions’ December 31, 2024operations and 2023.to Forbring moresystems information,and seeprocesses into a uniform operating structure. See Note 163 to the accompanying consolidated financial statements contained in “Part II. Item 8. Financial Statements and Supplementary Data.” for more information.

Net income attributable to noncontrolling interest. Net income attributable to noncontrolling interest for financial reporting purposes represents A/N’s portion of Charter Holdings’ net income based on its effective common unit ownership interest. For more information, see Note 1115 to the accompanying consolidated financial statements contained in “Part II. Item 8. Financial Statements and Supplementary Data.”

Management and Charter’sthe Board of Directors of Charter use Adjusted EBITDA and free cash flow to assess our performance and our ability to service our debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under our credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the SEC). For the purpose of calculating compliance with leverage covenants, we use Adjusted EBITDA, as presented, excluding certain expenses paid by our operating subsidiaries to other Charter entities. Our debt covenants refer to these expenses as management fees, which fees were in the amount of $1.5$1.4 billion and $1.4$1.5 billion for the years ended December 31, 20242025 and 2023,2024, respectively.

We have significant amounts of debt and require significant cash to fund principal and interest payments on our debt. The principal amount of our debt as of December 31, 20242025 was $93.8$94.6 billion, consisting of $10.3$11.9 billion of credit facility debt, $56.2$55.4 billion of investment grade senior secured notes and $27.3 billion of high-yield senior unsecured notes. Our split credit rating allows us to access both the investment grade debt and the high yield debt markets. In June 2024,Additionally, our bankruptcy remote special purpose vehicle enteredis intothe borrower of a senior secured revolving credit facility to finance the purchase of equipment installment plan receivables with a number of financial institutions (the “EIP Financing Facility”). As of December 31, 2024,2025, the carrying value of the EIP Financing Facility was $1.1$1.4 billion. For more information on the EIP Financing Facility, see Note 910 to the accompanying consolidated financial statements contained in “Part II. Item 8. Financial Statements and Supplementary Data.”

We continue to evaluate the deployment of our cash on hand and anticipated future free cash flow, including investing in our business growth and other strategic opportunities, including expanding the capacity of our network, the expansion of our network through our rural broadband construction initiative, the build-out and deployment of our CBRS spectrum, and mergers and acquisitions as well as stock repurchases and dividends. Charter's targetleverage leverageratio of net debt to the last twelve months Adjusted EBITDA remainswas at4.15 4times as of December 31, 2025. Charter plans to maintain a leverage ratio, pro forma for the closing of the Liberty Broadband Combination near the midpoint of its stated range of 4.0 to 4.5 times Adjusted EBITDA,EBITDA in the period leading up to the Closing, and up to 3.5 times Adjusted EBITDA at the Charter Operating first lien level. Charter'sCharter plans to adjust its long-term target leverage ratiorange wasafter 4.13the Closing to 3.5 to 3.75 times Adjusted EBITDA as of December 31, 2024.EBITDA. As Adjusted EBITDA grows, we expect to increase the total amount of our indebtedness to maintain leverage within Charter's target leverage range. Excluding purchases from Liberty Broadband discussed below, during the years ended December 31, 2024 and 2023, Charter purchased in the public market approximately 2.7 million and 6.9 million shares, respectively, of Charter Class A common stock for approximately $822 million and $2.7 billion, respectively. Since the beginning of its buyback program in September 2016 through the year ended December 31, 2024, Charter has purchased in the public market approximately 162.6 million shares of Class A common stock and Charter Holdings common units for approximately $73.4 billion, including purchases from Liberty Broadband and A/N discussed below.

The competitive environment continued to challenge our Internet customer growth in the firstsecond quarter of 2026 withand awe losslost of 120,000172,000 Internet customers. Mobile lines grew by 368,000406,000 while video and voice customer losses improved versus the prior year period asdriven by improvements to our product offerings with customers findfinding value in bundling our seamless connectivity and entertainment products. Our core strategy is to deliver great products, at a great value, while continuously improving service. We remain focused on improving customer results through the power of our advanced fiber-powered network and cutting-edge connectivity products and services, and our simplified pricing and packaging strategy that better utilizes our seamless connectivity and entertainment products to offer lower promotional and persistent bundled pricing to drive growth. Our Internet and mobile product bundles provide a differentiated connectivity experience by bringing together Spectrum Internet, Advanced WiFi and Unlimited Spectrum Mobile to offer consumers fast, reliable and secure online connections on their favorite devices at home and on the go in high-value packages. We have completed deals with major programmers to deliver better flexibility and greater value to our customers by including seamless entertainment applications with certain of our Spectrum TV packages at no additional cost. We offer the sale of these seamless entertainment applications to customers on an à la carte basis, and through our digital storefront, the Spectrum App Store, customers can easily activate, upgrade, buy and manage their streaming applications in one place. We also continue to develop other elements of our video product and are deploying Xumo stream boxes to new video customers.

We currently offer Spectrum Internet products with speeds up to 1 Gbps across our entire footprint and multi-gigabit data speeds in a portion of our footprint. Our network evolution initiative remains on track to deliver symmetrical and multi-gigabit speeds across our entire footprint with convergence everywhere we operate. We spent $427$391 million and $818 million on our subsidized rural construction initiative during the three and six months ended MarchJune 31,30, 20262026, respectively, and activated approximately 89,000127,000 and 216,000 subsidized rural passings.passings, respectively.

Total revenues decreased $138$240 million and $378 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025 primarily due to a higher seamless entertainment allocation,allocation and fewer customer relationships, partly offset by growthmobile inline connectivity revenue.growth. Adjusted EBITDA decreased $244 million and income$370 million during the three and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025 primarily due to lower revenue and higher transition expenses incurred as we prepare to integrate Cox Communications. Income from operations werewas also negativelyfurther impacted by one-timea favorable adjustments of $75 milliondecrease in themerger firstand quarteracquisition of 2025.costs.

The following table summarizes our customer statistics for connectivity, Internet, mobile, video and voice as of MarchJune 31,30, 2026 and 2025 (in thousands except per customer data and footnotes).

(a)We calculate the aging of customer accounts based on the monthly billing cycle for each account in accordance with our collection policies. On that basis, as of MarchJune 31,30, 2026 and 2025, customers include approximately 87,60084,000 and 92,20099,400 customers, respectively, whose accounts were over 60 days past due, approximately 7,80010,100 and 10,70011,600 customers, respectively, whose accounts were over 90 days past due and approximately 13,60013,400 and 17,00018,900 customers, respectively, whose accounts were over 120 days past due.

Revenues. Total revenues decreased $138$240 million and $378 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025. The decrease was primarily due to a higher seamless entertainment allocation,allocation and lower customer relationships, partly offset by growthmobile inline connectivity revenue.growth.

Residential mobile lines increased by approximately 1.71.6 million mobile lines from MarchJune 31,30, 2025 to MarchJune 31,30, 2026. The decrease related to rate was primarily due to less favorable bundled revenue allocation, partly offset by rate adjustments.

Seamless entertainment allocation represents costs allocated to programmer streaming applications and netted within video revenue. The increase in seamless entertainment allocation is due to growth in seamless entertainment applications and higher activations. The decrease related to rate and product mix was primarily due to a higher mix of lower priced video packages within our video customer base and more unfavorable bundled revenue allocation, partly offset by promotional rate step-ups and video rate adjustments that pass-through programming rate increases. Residential video customers decreased by 139,00077,000 from MarchJune 31,30, 2025 to MarchJune 31,30, 2026.

Residential wireline voice customers decreased by 707,000667,000 customers from MarchJune 31,30, 2025 to MarchJune 31,30, 2026.

Small business customers decreased by 15,00018,000 from MarchJune 31,30, 2025 to MarchJune 31,30, 2026.

Mid-market & large business revenues increased $15$21 million and $36 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025 primarily due to an increase in Internet PSUs. Mid-market & large business PSUs increased 16,00014,000 from MarchJune 31,30, 2025 to MarchJune 31,30, 2026.

Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors, as well as local cable and advertising on regional sports and news channels. Advertising sales revenues increased $18$45 million and $63 million during the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the corresponding periodperiods in 2025 primarily due to an increase in political and streaming advertising revenue, partly offset by a decrease in linear advertising revenue.

Other revenues consist of revenue from mobile and video device sales, processing fees, regional sports and news channels (excluding intercompany charges or advertising sales on those channels), subsidy revenue, home shopping, wire maintenance fees and other miscellaneous revenues. Other revenues increased $113$59 million and $172 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025 primarily due to higher mobile device sales.sales, partly offset by a one-time $45 million benefit in the prior year period.

Programming costs were approximately $2.1$2.0 billion and $2.3 billion for the three months ended MarchJune 31,30, 2026 and 2025, representing 26%25% and 27% of total operating costs and expenses, respectively, and $4.1 billion and $4.6 billion for the six months ended June 30, 2026 and 2025, representing 25% and 28% of total operating costs and expenses, respectively. Programming costs consist primarily of costs paid to programmers for basic, premium, video on demand, and pay-per-view programming. Programming costs decreased as a result of a $171$184 million and $355 million increase in costs allocated to seamless entertainment applications and netted within video revenue during the three and six months ended June 30, 2026, respectively, compared to the corresponding periods in 2025 as well as a higher mix of lower cost video packages within our video customer base and fewer video customers, partly offset by contractual rate adjustments, including renewals and increases in amounts paid for retransmission consent.

Other costs of revenue increased $181$186 million and $367 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025 primarily due to higher mobile device sales and mobile service direct costs and mobile device sales due to an increase in mobile lines as well as higher advertising sales costs given higher political revenue.

Depreciation and amortization. Depreciation and amortization expense increased $30$21 million and $51 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025 primarily due to an increase in depreciation as a result of more recent capital expenditures, partly offset by certain assets becoming fully depreciated.

Other operating expenses, net. The decreasechange in other operating expenses, net is attributable to the following (dollars in millions):

Interest expense, net. Net interest expense increased by $15$13 million and $28 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025 primarily due to an increase in weighted average debt.

Other expenses,income (expenses), net. The change in other expenses,income (expenses), net is attributable to the following (dollars in millions):

Income tax expense. We recognized income tax expense of $465$475 million and $445$940 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and $414 million and $859 million for the three and six months ended June 30, 2025, respectively.

Net income attributable to Charter shareholders. Net income attributable to Charter shareholders decreased $54$9 million and $63 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding periodperiods in 2025 primarily as a result of the factors described above.

Management and Charter’s board of directors use Adjusted EBITDA and free cash flow to assess our performance and our ability to service our debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under our credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the Securities and Exchange Commission (the “SEC”)). For the purpose of calculating compliance with leverage covenants, we use Adjusted EBITDA, as presented, excluding certain expenses paid by our operating subsidiaries to other Charter entities. Our debt covenants refer to these expenses as management fees which were $366$336 million and $702 million for boththe three and six months ended June 30, 2026, respectively, and $366 million and $732 million for the three and six months ended MarchJune 31,30, 20262025, and 2025.respectively.

We have significant amounts of debt and require significant cash to fund principal and interest payments on our debt. The principal amount of our debt as of MarchJune 31,30, 2026 was $94.3$93.8 billion, consisting of $11.7$12.5 billion of credit facility debt, $55.4$54.7 billion of investment grade senior secured notes and $27.3$26.7 billion of high-yield senior unsecured notes. Our split credit rating allows us to access both the investment grade debt and the high yield debt markets. Additionally, our bankruptcy remote special purpose vehicle is the borrower of a senior secured revolving credit facility to finance the purchase of equipment installment plan receivables with a number of financial institutions (the “EIP Financing Facility”). As of MarchJune 31,30, 2026, the carrying value of the EIP Financing Facility was $1.6 billion. For more information on the EIP Financing Facility, see Note 5 to the accompanying consolidated financial statements contained in “Item 1. Financial Statements.”

Our projected cash needs and projected sources of liquidity depend upon, among other things, our actual results, and the timing and amount of our expenditures. Free cash flow was $1.4$969 billionmillion and $1.6$2.3 billion for the three and six months ended MarchJune 31,30, 20262026, respectively, and $1.0 billion and $2.6 billion for the three and six months ended June 30, 2025, respectively. See the table below for factors impacting free cash flow during the three and six months ended MarchJune 31,30, 2026 compared to the corresponding prior period.periods. As of MarchJune 31,30, 2026, the amount available under our credit facilities was approximately $4.6$3.7 billion and cash on hand was approximately $517$509 million. We expect to utilize free cash flow, cash on hand and availability under our credit facilities as well as future refinancing transactions to further extend the maturities of our obligations. The timing and terms of any refinancing transactions will be subject to market conditions among other considerations. Additionally, we may, from time to time, and depending on market conditions and other factors, use cash on hand and the proceeds from securities offerings or other borrowings to retire our debt through open market purchases, privately negotiated purchases, tender and exchange offers or redemption provisions. In the second quarter of 2026, we executed an open market repurchase program and retired $1.2 billion in aggregate principal amount of various series of notes during the three and six months ended June 30, 2026. We are also required to fund approximately $4.2 billion of cash purchase price at the closing of the Cox Transactions. We believe we have sufficient liquidity from cash on hand, free cash flow and Charter Operating’s revolving credit facility as well as access to the capital markets to fund our projected cash needs.

We continue to evaluate the deployment of our cash on hand and anticipated future free cash flow, including investing in our business growth and other strategic opportunities, including expanding the capacity of our network, the expansion of our network through our rural broadband construction initiative, the build-out and deployment of our CBRS spectrum, and mergers and acquisitions as well as stock repurchases and dividends. Charter's leverage ratio of net debt to the last twelve months Adjusted EBITDA was 4.154.18 times as of MarchJune 31,30, 2026. Charter plans to maintain a leverage ratio, pro forma for the closing of the Liberty Broadband Corporation (“Liberty Broadband”) Combination near the midpoint of its stated range of 4.0 to 4.5 times Adjusted EBITDA in the period leading up to the Closing, and up to 3.5 times Adjusted EBITDA at the Charter Operating first lien level. Charter plans to adjust its long-term target leverage range after the Closing to 3.5 to 3.75 times Adjusted EBITDA. AsWe Adjusted EBITDA grows, wecurrently expect to increasedecrease the total amount of our indebtedness to maintainachieve leverage within Charter'sCharter’s target leverage range.leverage.

Excluding purchases from Liberty Broadband discussed below, during the three and six months ended MarchJune 31,30, 2026 and 2025,2026, Charter purchased in the public market approximately 3.42.1 million and 1.25.5 million shares of Charter Class A common stock, respectively, for approximately $773$433 million and $431$1.2 million,billion, respectively, and during the three and six months ended June 30, 2025, Charter purchased in the public market approximately 3.0 million and 4.2 million shares of Charter Class A common stock, respectively, for approximately $1.1 billion and $1.6 billion, respectively. Since the beginning of its buyback program in September 2016 through MarchJune 31,30, 2026, Charter has purchased approximately 184.0188.0 million shares of Class A common stock and Charter Holdings common units for approximately $79.7$80.6 billion, including purchases from Liberty Broadband and A/N discussed below.

On November 12, 2024, Charter and Liberty Broadband also entered into Amendment No. 1 to the Second Amended and Restated Stockholders Agreement and the Letter Agreement (the “Stockholders and Letter Agreement Amendment”). The Stockholders and Letter Agreement Amendment sets forth, among other things, the terms of Liberty Broadband’s participation in Charter’s share repurchases during the period between the execution of the Merger Agreement and the effective time of the Merger. Pursuant to the Stockholders and Letter Agreement Amendment, each month during the pendency of the proposed transaction, Charter will repurchase shares of Charter Class A common stock from Liberty Broadband in an amount equal to the greater of (i) $100 million and (ii) the Liberty Broadband minimum liquidity threshold as set forth in the Stockholders and Letter Agreement Amendment, provided that if any repurchase would reduce Liberty Broadband’s equity interest in Charter below 25.25% after giving effect to such repurchase or if all or a portion of such repurchase is not permitted under applicable law, then Charter shall instead loan to Liberty Broadband an amount equal to the lesser of (x) the repurchase amount that cannot be repurchased and (y) the Liberty Broadband minimum liquidity threshold as set forth in the Stockholders and Letter Agreement Amendment less the repurchase amount that is repurchased, with such loan on the terms set forth in the Stockholders and Letter Agreement Amendment. From and after the date Liberty Broadband’s exchangeable debentures are no longer outstanding, the amount of monthly repurchases will be the lesser of (i) $100 million and (ii) an amount equal to the sum of (x) the amount needed, in the reasonable judgment of Charter, to maintain an unrestricted cash balance of Liberty Broadband and its subsidiaries (other than GCI Holdings, LLC, GCI Spinco (as defined in the Merger Agreement) and their respective subsidiaries) of $50 million plus (y) the aggregate outstanding principal amount of the Liberty Broadband margin loan. The purchase price payable by Charter to Liberty Broadband in connection with such monthly repurchases will equal (i) the average price paid by Charter for shares of Charter Class A common stock repurchased during the immediately preceding calendar month (excluding shares repurchased from A/N and certain other excluded repurchases) or (ii) if Charter has not engaged in any repurchases of shares of Charter Class A common stock during the immediately preceding calendar month (other than any repurchases from A/N and certain other excluded repurchases), a purchase price based on a Bloomberg volume-weighted average price methodology proposed by Charter and reasonably acceptable to Liberty Broadband. Liberty Broadband will apply the proceeds from any such repurchases or borrowings from Charter to repay certain of its outstanding indebtedness in accordance with the Stockholders and Letter Agreement Amendment. The Stockholders and Letter Agreement Amendment provides that Liberty Broadband will be exempt from the standstill restrictions and the ownership cap under the Second Amended and Restated Stockholders Agreement among Charter, Liberty Broadband and A/N, dated as of May 23, 2015 to the extent its ownership in Charter exceeds such ownership cap solely as a result of the repurchase provisions in the Stockholders and Letter Agreement Amendment. During the three and six months ended MarchJune 31,30, 2026 and 2025,2026, Charter purchased from Liberty Broadband 0.91.9 million and 0.82.8 million shares of Charter Class A common stock, respectively, for approximately $190$405 million and $595 million, respectively, and during the three and six months ended June 30, 2025, Charter purchased from Liberty Broadband 0.8 million and 1.6 million shares of Charter Class A common stock, respectively, for approximately $300 million and $600 million, respectively. Additionally, pursuant to the Merger Agreement and Stockholders and Letter Agreement Amendment, in May 2026, Charter advanced a term loan to Liberty Broadband in the aggregate principal amount of approximately $359 million.

In December 2016, Charter and A/N entered into a letter agreement, as amended in December 2017 (the “Existing A/N Letter Agreement”), that requires A/N to sell to Charter or to Charter Holdings, on a monthly basis, a number of shares of Charter Class A common stock or Charter Holdings common units that represents a pro rata participation by A/N and its affiliates in any repurchases of shares of Charter Class A common stock from persons other than A/N effected by Charter during the immediately preceding calendar month, at a purchase price equal to the average price paid by Charter for the shares repurchased from persons other than A/N during such immediately preceding calendar month. In connection with the Cox Transactions, Charter, Charter Holdings and A/N entered into an amendment to the Existing A/N Repurchase Letter, dated as of May 16, 2025 (the “A/N Repurchase Letter Amendment”) which sets forth, among other things, the updated terms of A/N’s participation in Charter’s share repurchases going forward. The right to participate pro rata in repurchases on the terms and conditions set forth in the A/N Repurchase Letter Amendment is effective only from the earlier of the Closing and, in the event the Transaction Agreement is terminated in accordance with its terms, the date of such termination (such earlier date, the “Trigger Date”). Prior to the Trigger Date, the Existing A/N Letter Agreement will remain in full force and continue to govern A/N’s participation in Charter’s share repurchases, except for certain specific amendments set forth in the A/N Repurchase Letter Amendment which became effective upon execution of the A/N Repurchase Letter Amendment, including, in certain circumstances, where A/N elects not to participate in redemptions by Charter Holdings because such participation would cause A/N’s equity interest in Charter to be less than 11% prior to the Trigger Date, A/N may, subject to certain conditions, elect to receive a tax loan from Charter Holdings on the terms set forth in the A/N Repurchase Letter Amendment and in definitive documents in form and substance reasonably satisfactory to Charter and A/N. During the three and six months ended MarchJune 31,30, 2025, Charter Holdings purchased from A/N 0.10.6 million and 0.7 million Charter Holdings common units for approximately $20$232 million.million and $252 million, respectively. Charter Holdings'Holdings did not purchase any Charter Holdings common units from A/N during the three and six months ended MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, Charter had remaining board authority to purchase an additional $179$365 million of Charter’s Class A common stock and/or Charter Holdings common units, excluding purchases from Liberty Broadband. Although Charter expects to continue to buy back its common stock consistent with its leverage target range, Charter is not obligated to acquire any particular amount of common stock, and the timing of any purchases that may occur cannot be predicted and will largely depend on market conditions and other potential uses of capital. Purchases may include open market purchases, tender offers or negotiated transactions.

Free cash flow decreased $192$77 million and $269 million during the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the corresponding prior periodperiods in 2025 due to the following (dollars in millions):

Distributions by our subsidiaries to a parent company for payment of principal on parent company notes are restricted under CCO Holdings indentures governing CCO Holdings' indebtedness, unless there is no default under the applicable indenture, and unless CCO Holdings' leverage ratio test is met at the time of such distribution. As of MarchJune 31,30, 2026, there was no default under any of these indentures, and CCO Holdings met its leverage ratio test based on MarchJune 31,30, 2026 financial results. There can be no assurance that CCO Holdings will satisfy its leverage ratio test at the time of the contemplated distribution.

Cash and Cash Equivalents. We held $517$509 million and $477 million in cash and cash equivalents as of MarchJune 31,30, 2026 and December 31, 2025, respectively. In addition, we held $105$90 million and $121 million in restricted cash included in prepaid and other current assets in our consolidated balance sheets as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

Operating Activities. Net cash provided by operating activities increased $68$393 million during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 primarily due to a decrease in cash paid for taxes and favorable changes in working capital.capital, partly offset by lower Adjusted EBITDA.

Investing Activities. Net cash used in investing activities was $3.0$6.2 billion and $2.8$5.4 billion for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The increase in cash used was primarily due to an increase in capital expenditures,expenditures partlyand offset by a favorable changechanges in accrued expenses related to capital expenditures.

Financing Activities. Net cash used in financing activities increaseddecreased $234$213 million during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 primarily due to an increase in short-term borrowings under our deferred payment program and a decrease in the purchase of treasury stock.stock and noncontrolling interest, partly offset by an increase in the amount by which repayments of long-term debt exceeded borrowings.

We have significant ongoing capital expenditure requirements. Capital expenditures were $2.9 billion and $2.4$5.7 billion for the three and six months ended MarchJune 31,30, 20262026, respectively, and $2.9 billion and $5.3 billion for the three and six months ended June 30, 2025, respectively. The increase in capital expenditures during the six months ended June 30, 2026 compared to the corresponding period in 2025 was primarily driven by higher spend on network evolution and an increase in customer premise equipment.equipment, partly offset by a decrease in line extensions. See the table below for more details.

Our capital expenditures are funded primarily from cash flows from operating activities and borrowings on our credit facility. In addition, our accrued expenses related to capital expenditures decreased by $77$162 million and $273increased by $47 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

The following tables present our major capital expenditures categories in accordance with National Cable and Telecommunications Association (“NCTA”) disclosure guidelines for the three and six months ended MarchJune 31,30, 2026 and 2025. These disclosure guidelines are not required disclosures under GAAP, nor do they impact our accounting for capital expenditures under GAAP (dollars in millions):