Charter Communications sells home Internet, mobile service, television and business communications through Spectrum. In the third quarter of 2026, its acquisition of Cox Communications lifted reported revenue by 9.1%, but revenue fell 1.5% when both businesses were included for the full quarter in both years. The larger company has more customers to serve and more opportunities to combine services, yet it must stop losing Internet customers while paying for network improvements and a larger debt burden.
Analysis period: July–September 2026, with January–September cash-flow comparisons. Research cutoff: November 9, 2026, New York time. The latest company disclosures used are dated November 6, 2026.
1. Buying Cox enlarged Charter without restoring sales growth
The acquisition explains the reported revenue increase; the combined business was still shrinking. Charter completed the Cox transaction on August 19. Its reported results therefore include Cox only after the closing, while the comparison year includes no Cox operations.
That difference matters because buying another business can make sales rise even when the businesses themselves are selling less. Charter’s filing supplies an illustrative comparison, called pro forma, that treats Cox and the related financing as though the transaction had closed on January 1, 2025. Both the quarter and the first nine months show lower sales on that basis.
| Revenue, USD millions | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Reported consolidated revenue | 13,672 | 14,922 | 41,173 | 42,045 |
| Revenue with Cox included throughout both periods, pro forma | 16,764 | 16,505 | 50,615 | 49,720 |
Calculation notes: Reported revenue grew 9.1% in the quarter and 2.1% in the first nine months. Pro forma revenue fell 1.5% and 1.8%, respectively. Pro forma figures are acquisition comparisons, not forecasts or cash receipts.
Source: Charter’s third-quarter 2026 Form 10-Q, consolidated statements of operations, page 2; Note 2, pages 6–8.
The same conclusion holds when Cox is removed rather than added to the comparison. The filing attributes approximately $1.4 billion of third-quarter revenue to Cox. Excluding that contribution, legacy Charter revenue declined $118 million. Over the first nine months, legacy revenue declined $496 million.
Cox nevertheless adds useful capabilities. Charter acquired residential cable operations, commercial fiber networks, and managed IT and cloud businesses. Management intends to use the larger footprint to sell more Internet, mobile and television services, combine purchasing and support functions, and broaden its business-customer offering. Those benefits depend on how customers respond and how efficiently the networks and operations are combined; the purchase itself does not establish them.
Sources: 2026 Form 10-Q, Note 2 and Management’s Discussion and Analysis, pages 21–22 and 27–29; November 6 investor presentation, slide 6, “Unlocking Value from the Cox Acquisition.”
2. Mobile and better television packages have not stopped Internet losses
Charter is adding mobile lines, but it is losing the household Internet relationships its strategy is designed to protect. A mobile line counts a phone or tablet plan; it is not equivalent to a separate household. One family can add several lines while another cancels its home Internet service.
The filing’s comparable residential customer counts show the distinction. Cox is included in both columns below, so the increase caused simply by buying its customer base has been removed.
| Residential services, thousands at September 30 | 2025, pro forma including Cox | 2026, actual including Cox |
|---|---|---|
| Customer relationships receiving one or more services | 35,419 | 34,476 |
| Internet customers | 33,173 | 32,289 |
| Mobile lines | 11,282 | 12,992 |
| Video customers | 13,519 | 13,298 |
Reporting basis: Residential customers only. These rows overlap and must not be added together. Video counts exclude customers who purchase only streaming applications; mobile counts exclude wearables and devices without standard phone rate plans.
Source: 2026 Form 10-Q, customer statistics and definitions, pages 23–24.
This is more than a difficult acquisition quarter. Legacy Charter lost 156,000 Internet customers during the third quarter of 2026, compared with losses of 109,000 in the same quarter of 2025 and 110,000 in 2024. The 2024 decline included disconnections after the federal Affordable Connectivity Program ended. The continued losses in subsequent years show why the current problem cannot be explained solely by that earlier subsidy disruption.
Competition also remains active. AT&T reported 442,000 fiber Internet additions and 327,000 fixed-wireless additions across consumer and business customers in the third quarter of 2026. Fixed wireless supplies home or business Internet over a cellular connection. These national figures do not identify where former Spectrum customers went, but they show that competing ways to deliver Internet are still attracting customers.
Sources: Charter’s 2026 Form 10-Q, page 21; Charter’s third-quarter 2025 release, customer trends; Charter’s third-quarter 2024 release, Internet results; AT&T’s October 21, 2026 earnings release, page 2.
Charter’s own sales bridge shows pressure from both fewer customers and rates. Excluding Cox, quarterly residential Internet revenue fell $178 million: $114 million from a smaller average customer base and $64 million from rate-related changes. Meanwhile, legacy residential mobile service revenue rose $164 million, mainly because there were more lines. Mobile is helping, but that increase did not fully replace even the Internet revenue decline, before considering the cost of providing mobile service.
Television presents a different tradeoff. Charter includes programmers’ streaming applications in its packages to make the service more useful. Legacy Charter lost 38,000 video customers in the quarter, an improvement from 70,000 a year earlier. But customers also chose cheaper packages, and changes in how bundle revenue is assigned reduced the amount recorded as video revenue.
The way streaming-app costs are presented also makes the video revenue decline look larger without having the same effect on profit. Charter deducts some streaming-app costs from video revenue instead of presenting them as programming expense. The increase in this allocation reduced reported video revenue by $178 million in the quarter and reduced programming expense by the same amount. It therefore did not, by itself, reduce operating profit. Across the first nine months, the equivalent allocation increase was $533 million.
Sources: 2026 Form 10-Q, revenue bridges and programming costs, pages 27–29; November 6, 2026 earnings release, “Third Quarter 2026 Results and Highlights.”
Some smaller businesses provided support. Legacy mid-market and large-business revenue rose to $762 million from $747 million as Internet service units increased. Consolidated advertising revenue rose to $460 million from $356 million, including $28 million from Cox, with political and streaming advertising helping offset weaker traditional television advertising. Political advertising is an election-related contribution, so it offers less evidence of a permanent improvement in household demand.
Charter reports one operating segment, and the filing does not provide separate mobile or video profits. Mobile service and device sales also brought higher direct costs. The supported conclusion is that mobile growth and smaller net video losses are useful defenses, while the larger Internet business still needs stronger customer retention and pricing results.
Source: 2026 Form 10-Q, Notes 11–12 and revenue/cost discussion, pages 16–18 and 28–29.
3. The large loss contains a real warning about future business
The franchise write-down did not use cash, but it reflected lower expectations for customers and revenue. Charter reported a $2.397 billion loss attributable to its shareholders in the quarter. The largest cause was a $6.326 billion reduction in the recorded value of franchise rights—the rights to serve existing service areas and offer services to potential customers there.
| Reported consolidated results, USD millions except margins and EPS | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Operating profit/(loss) | 3,131 | -3,526 | 9,647 | 2,745 |
| Operating margin | 22.9% | -23.6% | 23.4% | 6.5% |
| Net profit/(loss) attributable to Charter shareholders | 1,137 | -2,397 | 3,655 | 58 |
| Shareholder net profit/(loss) as a percentage of revenue | 8.3% | -16.1% | 8.9% | 0.1% |
| Diluted earnings/(loss) per common share, USD | 8.34 | -20.50 | 25.95 | 0.38 |
Calculation notes: Margins divide the named profit or loss by reported revenue. Acquisition scope differs between years as described in section 1.
Source: 2026 Form 10-Q, consolidated statements of operations, page 2.
Management reduced its estimates of future customer and revenue growth. It also assigned higher replacement values to network equipment. In the valuation method used, more of the business’s expected cash generation must then be attributed to that equipment, leaving less attributable to franchise rights. The impairment test covered legacy Charter as of July 31, before Cox was acquired.
The associated deferred tax benefit was approximately $1.6 billion, leaving roughly $4.7 billion of consolidated after-tax impairment expense before allocating results to outside owners of subsidiaries. That tax benefit reduced an accounting liability; it was not a cash refund in the quarter. It also cannot be used directly to calculate an adjusted loss attributable only to Charter shareholders.
The loss was partly offset by $1.391 billion of net gains from extinguishing debt. Charter exchanged or bought debt for less than its recorded amount, producing an accounting gain. That benefit did not come from selling communications services. In the August exchange, Charter replaced about $5.5 billion of old note principal with $622 million of cash and about $3.4 billion of new notes. This reduced the principal it must repay, but the accounting gain itself was not a cash receipt.
Source: 2026 Form 10-Q, Notes 4, 6 and 12, pages 9–12 and 18.
Removing just the franchise write-down still leaves a weaker operating result despite the added Cox business:
| Operating-profit comparison, USD millions | Third quarter 2025 | Third quarter 2026 |
|---|---|---|
| Reported operating profit/(loss) | 3,131 | -3,526 |
| Add back franchise impairment | 0 | 6,326 |
| Calculated operating profit excluding only that impairment | 3,131 | 2,800 |
Reporting basis: This is a pretax calculation, not management’s adjusted earnings or an estimate of recurring profit. It retains depreciation, stock compensation, restructuring, acquisition and transition costs. Debt gains and interest sit below operating profit and are outside this calculation.
Source: 2026 Form 10-Q, page 2 and Note 12.
Several costs explain the remaining pressure. Quarterly depreciation and amortization rose $461 million, largely because Cox added assets and the acquisition assigned new values to them, with recent network spending also contributing. Other operating expenses rose $226 million, including higher merger and restructuring costs. Separately, integration transition expenses inside ordinary operating costs rose to $76 million from $4 million.
Management’s adjusted EBITDA—a measure before interest, taxes, depreciation and several other expenses—rose from $5.561 billion to $5.943 billion on the reported acquisition scope. Its margin nevertheless fell from 40.7% to 39.8%. The reconciliation in the calculation notes shows exactly what management removes. This measure retains transition expenses, but excludes stock compensation and substantial acquisition and restructuring charges; it is not cash left after maintaining and financing the network.
There is also limited room for another deterioration in the franchise estimates. The other legacy franchise unit exceeded its recorded value by only about 8%. Management said a half-percentage-point increase in the discount rate, with everything else unchanged, would use up that cushion and add about $1.9 billion to the impairment of the already impaired unit. No goodwill impairment was recorded. The business implication is a more cautious assessment of future growth, even though the immediate charge did not drain cash.
Source: 2026 Form 10-Q, Note 12; impairment sensitivity, page 24; cost discussion, pages 29–30; adjusted EBITDA reconciliation, page 32.
4. Network spending and payment timing left less cash available
Charter still generated substantial operating cash, but more of it went toward equipment and construction payments. Operating cash flow was almost unchanged over the first nine months. Free cash flow fell much more sharply because investment increased and Charter paid down amounts previously owed for capital spending.
Charter defines free cash flow as operating cash flow less capital expenditures, including the cash effect of changes in unpaid capital bills. That last adjustment matters: recording a new piece of equipment and paying its supplier need not happen in the same period.
| Actual consolidated cash allocation, USD millions | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Operating cash flow | 4,480 | 4,027 | 12,316 | 12,256 |
| Capital expenditure amount before payment-timing adjustment | 3,051 | 3,027 | 8,324 | 8,753 |
| Additional cash paid/(payment deferred) through capital accrual changes | -192 | 326 | -239 | 488 |
| Cash capital spending after that adjustment | 2,859 | 3,353 | 8,085 | 9,241 |
| Free cash flow remaining | 1,621 | 674 | 4,231 | 3,015 |
Calculation notes: Cash capital spending equals the two preceding spending rows; free cash flow equals operating cash flow less cash capital spending. Negative timing adjustments mean some recorded investment remained unpaid. Free cash flow is Charter’s non-GAAP measure.
Source: 2026 Form 10-Q, cash-flow statement, page 5; free-cash-flow reconciliation, page 32.
For the first nine months, the $1.216 billion free-cash-flow decline comprises $60 million less operating cash, $429 million more capital expenditure, and a $727 million unfavorable change in when capital bills were paid. Cash interest and acquisition costs reduced operating cash, while lower cash taxes partly offset them. The quarterly tax pattern differed: third-quarter net cash taxes rose to $431 million from $53 million. A favorable nine-month tax comparison therefore did not mean every quarter enjoyed a benefit.
The nine-month consolidated net profit of $188 million does not contradict $12.256 billion of operating cash. The profit calculation included the noncash franchise charge and depreciation. The cash-flow statement adds those expenses back, removes debt gains and adjusts for tax accounting and customer/supplier payments. The complete reconciliation appears in the notes. It shows why cash generation must be assessed alongside the large noncash losses.
Sources: 2026 Form 10-Q, page 5 and pages 34–35; November 6 investor presentation, slide 17, cash-tax and free-cash-flow bridge.
The investment mix shows what Charter is trying to achieve. First-nine-month upgrade and rebuild spending rose to $2.073 billion from $1.336 billion, largely supporting network evolution. Customer equipment spending increased to $1.992 billion from $1.722 billion. By contrast, spending to extend lines into new areas fell to $2.268 billion from $2.943 billion. The increased spending on existing service areas is intended to make the network more competitive, while reduced line-extension spending slows the cash committed to reaching new areas.
The network program is intended to deliver faster uploads as well as downloads and support multiple-gigabit service. Rural expansion also produces customers: Charter added 48,000 customer relationships in its subsidized rural footprint during the quarter. That is a useful counterweight to the broader losses. The company activated 116,000 additional rural locations during the quarter, but locations made serviceable are not the same as paying customers.
Management’s November outlook called for about $13.0 billion of full-year capital expenditure on a pro forma combined-company basis, excluding transition capital expenditure. That forecast includes Cox for the full year; subtracting Charter’s reported nine-month spending would not produce a valid fourth-quarter forecast.
Sources: 2026 Form 10-Q, network initiatives, page 22, and capital-expenditure categories, pages 35–36; November 6 earnings release, rural activity and capital-expenditure outlook.
Customers’ phone purchases also tie up cash. Current and long-term equipment installment receivables totaled approximately $2.7 billion, up from $2.4 billion at year-end. Charter has delivered the devices but collects the price over time. A separate financing facility supplies cash against eligible receivables; its balance rose from $1.447 billion to $1.696 billion. Those borrowings are financing cash, not customer collections, and the pledged assets are reserved for that facility’s creditors.
After the $3.015 billion of free cash flow, Charter spent $4.158 billion in cash on Cox net of acquired cash, $312 million on other investing activities, and $1.899 billion buying treasury shares. Financing therefore remained important. Net financing inflow was $1.473 billion after debt repayments and share purchases, allowing cash including restricted balances to rise by just $18 million. The company funded its network, acquisition and capital returns through a combination of operating cash and borrowing.
Source: 2026 Form 10-Q, cash-flow statement, page 5; Notes 7 and 11, pages 12–13 and 16.
5. Cox added valuable operating assets and substantial financial obligations
The larger balance sheet provides more earning capacity, but it also requires more cash for lenders and outside owners. Total assets rose from $154.213 billion to $178.465 billion. Most of the expansion reflects acquired networks and customer relationships rather than cash accumulating in the bank.
Cox contributed $14.175 billion of property and equipment and $6.100 billion of customer relationships at preliminary acquisition values. Net property and equipment rose by $16.342 billion overall as acquisitions and new investment exceeded depreciation and other changes. Customer relationships rose from $440 million to $6.091 billion. Their acquired value will be charged to earnings over an estimated seven-year average life.
Franchise assets barely changed despite the acquisition: $67.471 billion at year-end, plus $6.770 billion acquired from Cox, less the $6.326 billion impairment, equals $67.915 billion. Goodwill rose only $38 million to $29.748 billion. The acquisition values remain preliminary, so revisions can change future depreciation and amortization.
Source: 2026 Form 10-Q, balance sheets, page 1; Notes 2 and 4, pages 6–10; acquisition accounting, page 25.
The $15.197 billion accounting purchase price comprised $4.224 billion of cash, $5.121 billion of common partnership units and $5.852 billion of preferred partnership units. It is not the total financing burden: Charter also assumed Cox debt with approximately $11.8 billion of principal. The debt was initially recorded below principal at fair value, so the $10.165 billion acquisition carrying value does not reduce the contractual amount owed.
The preferred units carry a $6.0 billion face amount and a 6.875% annual cash dividend. That implies $412.5 million a year before any conversion; unpaid dividends accumulate if suspended. These units belong to Cox’s owners and sit within noncontrolling equity, meaning equity in consolidated subsidiaries owned by someone other than Charter. Their financing cost is economically important even though it is not included in the debt-principal table.
Source: 2026 Form 10-Q, Notes 2, 6 and 9, pages 6–8, 12 and 14–15.
Debt principal rose from $94.617 billion to $108.574 billion. Charter issued $4.75 billion of new secured notes in August, principally to finance Cox. Their stated coupons imply about $319.9 million of annual interest before financing fees and other accounting adjustments. At quarter-end, approximately 87% of the main debt principal carried fixed rates, which limits immediate exposure to rate changes but does not eliminate refinancing costs.
The largest maturity concentration in the next five calendar years is in 2030, particularly in bank borrowing. Charter has time to address it, but continuing access to lenders matters because the cash balance is small relative to scheduled repayments.
| Principal due, USD millions as of September 30, 2026 | Fixed-rate debt | Variable-rate debt | Total |
|---|---|---|---|
| Remaining 2026 | 0 | 75 | 75 |
| 2027 | 2,000 | 305 | 2,305 |
| 2028 | 5,874 | 642 | 6,516 |
| 2029 | 6,903 | 280 | 7,183 |
| 2030 | 6,550 | 10,038 | 16,588 |
| Thereafter | 73,557 | 2,350 | 75,907 |
| Total | 94,884 | 13,690 | 108,574 |
Reporting basis: This is the filing’s main debt-principal schedule. It excludes the separate equipment-installment financing facility, supplier-payment borrowings, and lease obligations. Calendar-year maturities differ from the balance sheet’s next-twelve-month classification.
Source: 2026 Form 10-Q, Note 6, pages 11–12, and market-risk schedule, pages 36–37.
Cash available without restriction was $573 million, with approximately $2.4 billion available under the operating credit facilities. The filing reported no default under the relevant CCO Holdings indentures and said its distribution leverage test was satisfied. However, moving cash from subsidiaries to parent entities remains subject to debt terms and legal limits. For management’s debt target, debt less cash equaled 3.93 times the combined company’s last twelve months of adjusted EBITDA, excluding transition costs. Lenders use their own definitions for contractual tests.
Management plans to reduce leverage to 3.5 times within three years after the August transactions and expects to reduce debt in dollars. The plan is helped by the sharp slowdown in cash share repurchases: the cash-flow statement shows $1.899 billion in the first nine months, versus $4.366 billion a year earlier. That leaves more internally generated money available for integration and debt reduction.
Source: 2026 Form 10-Q, cash-flow statement and liquidity/distribution discussion, pages 33–35.
The Liberty Broadband transaction further changed ownership without being an ordinary cash buyback. Charter acquired 38.584 million of its own shares held by Liberty and issued 33.870 million replacement shares to Liberty holders, reducing outstanding shares by 4.714 million. It also assumed and repaid $844 million of net short-term debt. Much of the $6.451 billion treasury-stock accounting entry was therefore noncash consideration.
Including other share purchases and employee issuances, Class A shares outstanding fell from 126.632 million to 114.454 million. That smaller share base spreads profit—or a loss—over fewer shares. In the loss-making third quarter, basic and diluted loss per share were both $20.50 because adding potential shares would have reduced the reported loss per share. Stock compensation still cost $518 million over nine months, and new awards can create future dilution. Cash spent repurchasing shares must therefore be assessed alongside employee share issuance.
Total equity rose to $29.820 billion, but equity attributable to Charter shareholders fell to $10.983 billion. Cox’s outside ownership explains why those directions differ. The equity reconciliation below separates that new ownership from retained profit and share repurchases.
Source: 2026 Form 10-Q, equity statement, page 3; Notes 3, 8–9 and 13–14.
6. Cost reductions can buy room for the customer strategy to work
Management’s new savings plan can improve cash capacity, provided it preserves the service needed to retain customers. On November 6, Charter announced a plan for an additional $2 billion of annualized operating savings over 18 months, beyond more than $1 billion of expected Cox combination savings. “Annualized” means the eventual yearly pace of savings, not cash already saved or the amount expected in the next quarter.
Management says it will stop projects that do not support Internet growth, remove management layers and use a smaller group of vendors to improve cost, speed and quality. In parallel, it plans simpler offers, revised sales channels and better service to attract and retain Internet customers while maintaining or increasing revenue per relationship. The company needs lower costs and a stronger customer proposition at the same time.
The difficulty is execution. Less management complexity may speed decisions, but integration already produced $165 million of transition operating costs and $70 million of transition capital spending in the first nine months. Merger and restructuring costs sit elsewhere in the accounts. Gross savings therefore cannot simply be added to current profit or free cash flow. The relevant outcome is the savings left after implementation costs, service investment and any revenue lost through customer departures or cheaper offers.
Source: 2026 Form 10-Q, November operating-model announcement, pages 21–22; Note 12; capital spending, page 36; integration risks, page 38.
Other claims on cash also constrain the plan. The last detailed lease schedule, dated December 31, 2025 before Cox, showed $1.442 billion of operating lease liabilities and $1.722 billion of remaining payments. Minimum content, equipment and network commitments then totaled $17.122 billion. These historical schedules are not a current combined-company total.
The annual filing also recorded $835 million of uncertain tax positions before interest and penalties. These concern tax benefits that may not survive a challenge by tax authorities; they are not an announced new payment. Its intellectual-property litigation could require damages, licensing payments or service changes; Charter could not estimate a possible loss range. The current 10-Q refers readers back to those legal disclosures.
Source: Charter’s 2025 Form 10-K, Notes 8, 17 and 20, pages F-15–F-16, F-31–F-32 and F-37–F-38; 2026 Form 10-Q, Part II, Item 1, page 38.
The Cox transaction adds another contingent payment mechanism. Charter agreed to share 50% of specified tax benefits from future exchanges of Cox and A/N partnership units. No Cox tax-sharing liability was recorded at acquisition because the triggering exchanges were uncertain. If exchanges occur and benefits arise, part of the tax saving will go to the former owners rather than remain available to Charter.
That makes customer retention the decisive operating test. Expense cuts can offset some pressure, and rural additions and smaller net video losses show that parts of the offering are working. But continued Internet losses would weaken the revenue base on which the savings and debt-reduction plans depend.
Source: 2026 Form 10-Q, Note 2, page 7; operating strategy and liquidity discussion, pages 21–22 and 33.
7. The larger company has resources, but its turnaround is not yet demonstrated
Charter can fund substantial network investment from operations, yet growth and debt reduction now depend on making the combined business work better. The acquisition added networks, customers and commercial capabilities. Mobile growth, rural customer additions and smaller video losses provide concrete evidence that some products and expansion efforts are helping.
The broader evidence remains weaker: comparable sales fell, legacy Internet losses continued, and capital payments left less free cash flow. The franchise write-down reinforces the reduction in expected growth, while the increased debt and preferred distributions raise the cost of waiting for improvement.
A stronger business assessment would require the revised offers and service model to reduce Internet losses without giving away too much revenue, alongside savings that remain after integration costs. If those conditions improve, the enlarged network can support debt reduction and future investment. If they do not, Charter will have to devote more of its available cash to defending its existing customer base.
Sources: 2026 Form 10-Q, Notes 2, 4, 6 and 9; Management’s Discussion and Analysis, pages 21–36. Supporting operating comparisons appear in sections 1–6 above.
Reporting basis and calculation notes
Reporting basis: Charter Communications, Inc., CIK 0001091667, consolidated with its controlled subsidiaries under U.S. GAAP. The selected filing is Form 10-Q, accession 0001091667-26-000073, filed November 6, 2026, for the period ended September 30, 2026. Third-quarter comparisons cover July 1–September 30; nine-month comparisons cover January 1–September 30. Balance-sheet comparisons use December 31, 2025. Quarterly statements are unaudited. The research cutoff is November 9, 2026, New York time; this report does not claim that every event through that date was independently checked.
Sources: SEC filing index; complete 10-Q, cover and Note 1. The supplied complete filing text was the foundation. SEC company facts cross-checks used this accession, USD units and the actual start/end dates. Consolidated net income was distinguished from income attributable to Charter shareholders; the “Q3” filing label was not treated as proof that a fact covered only three months.
Calculation notes: Profit measures remove different costs. The following reconciles reported shareholder profit to management’s adjusted EBITDA. All adjustments have the signs shown, and each column adds to the final row.
| Reconciliation, USD millions | Third quarter 2025 | Third quarter 2026 | First nine months 2025 | First nine months 2026 |
|---|---|---|---|---|
| Reported profit/(loss) attributable to Charter shareholders | 1,137 | -2,397 | 3,655 | 58 |
| Add outside owners’ profit/(loss) to reach consolidated profit | 179 | -302 | 565 | 130 |
| Add net interest expense | 1,268 | 1,341 | 3,772 | 3,873 |
| Add income tax expense/(subtract benefit) | 418 | -803 | 1,277 | 137 |
| Add depreciation and amortization | 2,160 | 2,621 | 6,517 | 7,029 |
| Add franchise impairment | 0 | 6,326 | 0 | 6,326 |
| Remove debt-extinguishment gain/(add loss) | 28 | -1,391 | 28 | -1,630 |
| Add stock compensation | 151 | 177 | 530 | 518 |
| Other adjustments, net | 220 | 371 | 673 | 588 |
| Management’s adjusted EBITDA, non-GAAP | 5,561 | 5,943 | 17,017 | 17,029 |
Reporting basis: This bridge removes all income tax expense or benefit to reach a pretax measure. It is not an after-tax adjusted net-profit bridge. “Other adjustments” remove other operating expenses and the remaining nonoperating items. For third-quarter 2026, this is $345 million of other operating expenses, plus $86 million of investment losses, less $53 million of financial-instrument gains and $7 million of pension benefit, totaling $371 million. Transition operating expenses remain included. Nine-month margins were 41.3% in 2025 and 40.5% in 2026.
Source: 2026 Form 10-Q, Notes 10 and 12, and page 32.
Calculation notes: Noncash charges explain most of the profit-to-cash gap. Customer and supplier movements below exclude balances brought in through acquisitions.
| Nine-month profit-to-operating-cash reconciliation, USD millions | 2025 | 2026 |
|---|---|---|
| Consolidated net profit, including outside owners | 4,220 | 188 |
| Depreciation and amortization added back | 6,517 | 7,029 |
| Franchise impairment added back | 0 | 6,326 |
| Debt loss added back/(gain removed) | 28 | -1,630 |
| Stock compensation added back | 530 | 518 |
| Noncash interest adjustment | 22 | 36 |
| Deferred-tax adjustment | 772 | -603 |
| Other adjustments | 470 | 186 |
| Increase in customer receivables | -334 | -216 |
| Increase in prepaid expenses and other assets | -355 | -284 |
| Increase in payable/accrued balances and other changes | 446 | 706 |
| Operating cash flow | 12,316 | 12,256 |
The receivables row represents sales and other amounts not yet collected in cash. The payable row reflects payment timing and other liability changes; it does not establish that suppliers were paid late. The deferred-tax adjustment removes noncash tax effects already included in profit and must not be counted again as a separate cash-tax saving.
Cash including restricted balances reconciles as follows: opening $598 million + $12,256 million operating inflow − $13,711 million investing outflow + $1,473 million financing inflow = $616 million closing cash. Closing cash comprises $573 million unrestricted and $43 million restricted. The comparable 2025 reconciliation is $506 million + $12,316 million − $8,582 million − $3,719 million = $521 million, including $57 million restricted.
Source: 2026 Form 10-Q, cash-flow statement and restricted-cash note, page 5.
Calculation notes: The balance sheet balances, while acquisition effects limit simple growth comparisons.
| Consolidated balance-sheet check, USD millions | December 31, 2025 | September 30, 2026 |
|---|---|---|
| Cash and cash equivalents | 477 | 573 |
| Net accounts receivable | 3,680 | 4,396 |
| Prepaid expenses and other current assets | 987 | 1,249 |
| Net property and equipment | 46,444 | 62,786 |
| Net customer relationships | 440 | 6,091 |
| Franchises | 67,471 | 67,915 |
| Goodwill | 29,710 | 29,748 |
| Other noncurrent assets | 5,004 | 5,707 |
| Total assets | 154,213 | 178,465 |
| Total liabilities, calculated from disclosed liability rows | 133,694 | 148,645 |
| Total equity, including outside owners | 20,519 | 29,820 |
| Liabilities plus equity | 154,213 | 178,465 |
Net receivables rose $716 million, but the cash-flow statement attributes only $216 million of cash use to receivable changes excluding acquisitions and dispositions. Cox’s purchase allocation groups receivables with other acquired current assets; the whole balance increase cannot be attributed to slower customer payments. The allowance against uncollectible accounts rose from $219 million to $244 million. Inventory is not separately presented on the consolidated balance sheet.
Accounts payable, accrued and other current liabilities rose from $12,556 million to $14,644 million; Cox added $1,893 million of current liabilities in its purchase allocation. Within the combined closing balance, $1,180 million was interest-bearing supplier-payment borrowing, compared with $918 million at year-end. Separately, $608 million of obligations involved a supply-chain finance program and remained within trade and capital payables. Payments under the first program are financing cash flows. Payments under the supply-chain program are operating or investing cash flows, depending on what was purchased.
Deferred income tax liabilities fell from $19,841 million to $18,819 million. The franchise impairment’s approximately $1,600 million deferred-tax benefit was a major downward influence, while acquisition accounting, ownership changes and other tax movements also affected the balance. Other long-term liabilities rose from $5,094 million to $6,434 million; Cox added $1,109 million in that category, and Liberty brought $159 million of mandatorily redeemable preferred stock. That Liberty instrument is a liability whose dividends are interest expense, unlike Cox’s preferred partnership units recorded in equity.
Source: 2026 Form 10-Q, page 1 and Notes 2–6 and 9. Asset rows sum to total assets; liabilities are the sum of current liabilities, long-term debt, equipment-installment financing, deferred taxes and other long-term liabilities.
Calculation notes: New outside ownership explains the rise in total equity. “Paid-in capital” records contributed ownership capital and related adjustments; “accumulated deficit” is the retained-earnings account when its balance is negative. Treasury stock is the cost of shares reacquired and still held by the company.
| Equity reconciliation, USD millions | Opening balance, December 31, 2025 | Net change in first nine months 2026 | Closing balance, September 30, 2026 |
|---|---|---|---|
| Additional paid-in capital | 21,447 | 3,218 | 24,665 |
| Accumulated deficit | -5,393 | 58 | -5,335 |
| Treasury stock, deduction from equity | 0 | -8,347 | -8,347 |
| Equity attributable to Charter shareholders | 16,054 | -5,071 | 10,983 |
| Noncontrolling interests | 4,465 | 14,372 | 18,837 |
| Total equity | 20,519 | 9,301 | 29,820 |
Paid-in capital increased through $5,164 million of Liberty replacement shares, $518 million of stock compensation, $13 million of option proceeds and $20 million of employee-plan shares, offset by $2,497 million of ownership adjustments net of tax. Treasury stock comprises $6,451 million from the Liberty transaction and $1,896 million of other equity-statement purchases including excise-tax effects. That equity amount differs from the $1,899 million cash-flow payment and should not replace it in a cash-allocation calculation.
Outside owners’ equity reconciles as opening $4,465 million + $10,973 million of Cox partnership equity + $3,316 million of ownership adjustments + $130 million of allocated profit − $47 million of distributions = $18,837 million. Comprehensive income equaled shareholder net income, so there was no separate other-comprehensive-income movement. Treasury shares held before the end of 2025 were retired as of December 31; shares reacquired in 2026 remained reported as treasury stock at September 30.
Source: 2026 Form 10-Q, equity statement, page 3; Notes 1, 3 and 8–9.
Calculation notes: Interest and per-share amounts use the appropriate ownership scope. New August debt coupons are $1,750 million × 6.050%, plus $1,000 million × 6.600%, plus $1,000 million × 6.950%, plus $1,000 million × 7.850% = $319.875 million annually. Cox’s preferred distribution is $6,000 million × 6.875% = $412.5 million annually. These are contractual calculations, not forecasts of consolidated interest expense or cash paid during the partial ownership period.
For nine-month diluted EPS, the filing presents rounded earnings of $53 million after assumed A/N-unit conversion and 137.549 million diluted shares, alongside reported EPS of $0.38; dividing these rounded inputs does not reproduce the reported EPS exactly. Basic EPS uses $58 million divided by 120.820 million average shares, producing $0.48. The different numerator explains why dividing reported shareholder profit by diluted shares does not reproduce the filing’s diluted EPS exactly.
Source: 2026 Form 10-Q, Notes 6, 9 and 14, pages 11, 14 and 19.
This report is for information and business analysis only. It is not investment advice or a recommendation to buy, sell or hold any security.