EX-99.2 3 ef20049175_ex99-2.htm EXHIBIT 99.2
Exhibit 99.2


 Charter Communications and Cox Communications Agree to Transformative Combination  May 16, 2025 
 

 Cautionary Statement Regarding Forward-Looking Statements  Charter and Cox Agree to Transformative Combination  1  This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, the proposed transaction between Charter Communications, Inc. ("Charter") and Cox Communications ("Cox"). Although we believe that our plans, intentions and expectations as reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation: (i) the effect of the announcement of the proposed transaction on the ability of Charter and Cox to operate their respective businesses and retain and hire key personnel and to maintain favorable business relationships; (ii) the timing of the proposed transaction; (iii) the ability to satisfy closing conditions to the completion of the proposed transaction (including stockholder and regulatory approvals); (iv) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (v) the ultimate outcome and results of integrating operations and application of Charter's operating strategies to the acquired assets and the ultimate ability to realize synergies at the levels currently expected as well as potential dis-synergies; (vi) the impact of the proposed transaction on our stock price and future operating results, including due to transaction and integration costs, increased interest expense, business disruption, and diversion of management time and attention; (vii) the reduction in our current stockholders' percentage ownership and voting interest as a result of the proposed transaction; (viii) the increase in our indebtedness as a result of the proposed transaction, which will increase interest expenses and may decrease our operating flexibility; (ix) litigation relating to the proposed transaction; (x) other risks related to the completion of the proposed transaction and actions related thereto; and (xi) the factors described under “Risk Factors” from time to time in Charter's filings with the U.S. Securities and Exchange Commission ("SEC"). Many of the forward-looking statements contained in this communication may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” “aim,” “on track,” “target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “initiatives,” “seek,” “would,” “could,” “continue,” “ongoing,” “upside,” “increases,” “grow,” “focused on” and “potential,” among others.  All forward-looking statements speak only as of the date they are made and are based on information available at that time. Charter assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. 
 

 Important Information for Investors and Shareholders  Charter and Cox Agree to Transformative Combination  2  Charter intends to file a proxy statement with the SEC in connection with the proposed transaction. Investors and security holders of Charter and Cox are urged to read the proxy statement and/or other documents filed with the SEC carefully in their entirety if and when they become available as they will contain important information about the proposed transaction. The definitive proxy statement (if and when available) will be mailed to stockholders of Charter. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Charter through the website maintained by the SEC at http://www.sec.gov or by contacting the investor relations department of Charter at 400 Washington Blvd., Stamford, CT 06902, Attention: Investor Relations, (203) 905-7801.  Participants in Solicitation  This communication is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC. Nonetheless, Charter and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the interests of such potential participants will be included in one or more proxy statements or other documents filed with the SEC if and when they become available. These documents (if and when available) may be obtained free of charge from the SEC's website http://www.sec.gov.  Charter anticipates that the following individuals will be participants (the “Charter Participants”) in the solicitation of proxies from holders of Charter common stock in connection with the proposed transaction: Eric L. Zinterhofer, Non-Executive Chairman of the Charter Board, W. Lance Conn, Kim C. Goodman, John D. Markley, Jr., David C. Merritt, Steven A. Miron, Balan Nair, Michael A. Newhouse, Martin E. Patterson, Mauricio Ramos, Carolyn J. Slaski and J. David Wargo, all of whom are members of the Charter Board, Christopher L. Winfrey, President, Chief Executive Officer and Director, Jessica  M. Fischer, Chief Financial Officer, and Kevin D. Howard, Executive Vice President, Chief Accounting Officer and Controller. Information about the Charter Participants, including a description of their direct or indirect interests, by security holdings or otherwise, and Charter's transactions with related persons is set forth in the sections entitled “Proposal No. 1: Election of Directors”, “Compensation Committee Interlocks and Insider Participation”, “Compensation Discussion and Analysis”, “Certain Beneficial Owners of Charter Class A Common Stock”, “Certain Relationships and Related Transactions”, “Proposal No. 2: Approve the Charter Communications, Inc. 2025 Employee Stock Purchase Plan”, “Pay Versus Performance” and “CEO Pay Ratio” contained in Charter's definitive proxy statement for its 2025 annual meeting of shareholders, which was filed with the SEC on March 13, 2025 (which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0001091667/000114036125008627/ny20042259x1_def14a.htm) and other documents subsequently filed by Charter with the SEC. To the extent holdings of Charter stock by the directors and executive officers of Charter have changed from the amounts of Charter stock held by such persons as reflected therein, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC.  No Offer or Solicitation  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. 
 

 Christopher L. Winfrey  President and CEO, Charter Communications 
 

 Value Creation for Customers and Shareholders  Accelerate Growth Positioned to Compete  Financial Efficiencies & Benefits  Spectrum pricing and packaging to deliver customer benefits, drive sales and reduce churn & service interactions  Charter and Cox Agree to Transformative Combination  4  • •  Significant opportunity to deliver Spectrum MobileTM benefits to customers in Cox footprint  Spectrum video packages, Xumo and programmer app inclusion to improve trajectory of Cox video product  Larger commercial footprint, together with Cox Business’ industry reputation and assets, will position the company to more effectively compete for national business customers  Charter will launch the Spectrum brand and its industry-leading products across Cox’s ~12M passings – enhances sales, marketing and branding capabilities vs. national competitors  Scale enables and accelerates product  development and innovation  Enhances DMA efficiency in Los Angeles and San Diego, and adds key markets including Las Vegas and Phoenix  Development of AI tools for sales, retention and service, deployed against a larger opportunity  Expect $500M of annualized transaction cost synergies achieved within 3 years of transaction close  Unlock value through additional cost synergies inherent in Charter’s operating model  Expect higher pro forma growth rates and margin  3.5 - 4.0x target leverage within 2-3 years after close of transaction  Drives share price and levered free cash  flow accretion 
 

 Transaction Summary  Cox Enterprises will contribute Cox Communications to Charter’s existing partnership structure  Cox Communications valued at approx. $34.5 billion based on 6.44x 2025E Adj. EBITDA, including:  $21.9 billion of equity  $12.6 billion of net debt and other obligations1)  <6.0x including run-rate synergies and estimated present value of tax benefits  Cox Enterprises will receive $21.9 billion of consideration:  $11.9 billion Charter partnership common units, exchangeable into Charter common stock  $6.0 billion notional value Charter partnership convertible preferred units2)  $4.0 billion cash  Cox Enterprises will own ~23% of the combined company’s common shares, on an as-converted, as-exchanged basis3)  Proposed Liberty Broadband transaction to close contemporaneously with Cox transaction  Subject to standard signing conditions and regulatory approvals  Charter and Cox Agree to Transformative Combination  5  Includes $11.9 billion of net debt and $0.7 billion of finance leases.  Convertible into common units of the partnership at a 35% conversion premium; 6.875% preferred cash dividend coupon of $413 million per year paid to Cox Enterprises, assuming no conversion.  Based on Charter’s common share count as of March 31, 2025, and assumes the proposed Liberty Broadband transaction closes contemporaneously with the Cox Communications transaction. 
 

 Industry Leading Connectivity and Entertainment Company  Figures as of 1Q25.  See notes on slide 18.  Pro Forma Charter1)  Charter  +  Cox  =  Combined  Passings  57.2M  12.3M  69.5M  Customers2)  31.4M  6.3M  37.6M  Subsidized Rural Footprint  Note: minor differences may exist due to rounding.  Charter and Cox Agree to Transformative Combination  6 
 


 Transaction Benefits All Stakeholders  Customers Employees & Vendors  Communities  Cox footprint will benefit from generally lower multi-product pricing, cutting- edge products and Customer Commitments  Charter and Cox Agree to Transformative Combination  7  • •  Continued network investments will drive faster broadband speeds, better video products and more competition  Combination will drive greater product innovation, bringing new and advanced services to consumers  Investments in insourcing will drive better customer service and higher customer satisfaction  Medium and large business customers will benefit from expansion of both Charter and Cox’s best products, services and enterprise solutions  Committed to onshoring customer service jobs from overseas back to the  U.S. and hiring American workers  100% U.S.-based frontline workforce with market-leading minimum wage, career progression and benefits  Charter’s commitment to superior products and customer service, and its strategy of investing in insourcing, drives opportunities for all employees  Market-leading education program and  employee stock purchase plan  Investment reputation and profile drives incentives for vendors to invest in, and develop new technologies for, business lines and platforms  Establish new foundation with $50 million contribution, supporting more communities in combined footprint  Establish an employee relief fund across combined footprint  Expansion of Spectrum News coverage, delivering unbiased and timely local reporting to markets currently served by Cox Communications  The combined company’s industry- leading products will be launched under the Spectrum brand across the Cox footprint  The combined company will change its name to Cox Communications within one year of close 
 

 Alex Taylor  Chairman and CEO, Cox Enterprises 
 

 Charter and Cox Agree to Transformative Combination  9  Highly clustered footprint complementary to Charter’s existing  network (e.g., Los Angeles, San Diego)  Attractive sunbelt footprint  Upgraded plant offering 2 Gbps service across 99% of footprint  Deep focus on customers and community  Cox Business: well-known industry leadership and reputation  About Cox Communications  The Cox family is the longest continuous operator in the cable  industry, having bought its first cable franchise in 1962  First cable operator to launch B2B services in 1987  Made the world’s first PCS phone call in 1992  First to offer cable voice service in 1997  Early acquisitions of wireless spectrum in 2000s  Cox Communications Businesses  Provider of residential and business Internet, video, voice, and mobile connectivity services  ~12M passings and ~6M customers  History of Innovation  Cox Highlights  Enterprise and carrier fiber provider operating in Mid-Atlantic and Southeastern United States  40K+ fiber route miles across 24 states  End-to-end managed cloud services  provider  2,000+ managed cloud customers 
 

 Jessica M. Fischer  Chief Financial Officer, Charter Communications 
 

 New Company: At a Glance  Combined  1Q25 Customers1)  Passings  Customer Relationships  Internet Video Mobile Lines Voice  57.2M  31.4M  30.0M  12.7M  10.4M  6.6M  12.3M  6.3M  5.9M  1.7M  0.2M  1.0M  69.5M  37.6M  35.9M  14.4M  10.6M  7.6M  1Q25  Penetration2)  Customer Relationships Internet  Video Voice  55%  53%  22%  12%  51%  48%  14%  8%  54%  52%  21%  11%  FY24  Financials  Revenue  Adj. EBITDA3)  Capital Expenditures Adj. EBITDA - Capex  $55.1B  $22.6B  $11.3B  $11.3B  $13.1B  $5.4B  $2.5B  $2.9B  $68.2B  $28.0B  $13.8B  $14.2B  Note: minor differences may exist due to rounding.  Includes residential and commercial customers. See notes on slide 18.  Penetration based on total passings, which includes residential and commercial passings.  See notes on slide 18 and GAAP reconciliation for Cox Communications on slide 19.  Charter and Cox Agree to Transformative Combination  11 
 

 Total Purchase Consideration of $21.9 Billion  Common Units - $11.9 Billion Preferred Units - $6.0 Billion  Cash - $4.0 Billion  $11.9 billion of Charter partnership common units  Charter and Cox Agree to Transformative Combination  12  • •  33.6 million Charter partnership •  common units exchangeable into Charter common stock  $6.0 billion notional value of Charter partnership convertible preferred units  12.6 million preferred units convertible into common units of the Charter partnership at a 35% conversion premium  6.875% preferred cash dividend coupon of $413 million per year paid to Cox Enterprises  $4.0 billion in cash 
 


 Charter Shareholders ex- Cox Ent, ex-A/N  Transaction Structure and Pro Forma (“PF”) Ownership  Pro forma for Liberty Broadband transaction.  Ownership figures are shown on an as-converted, as-exchanged basis.  Structure PF Charter Shares (as of 3/31/25)  in Millions  PF Charter Economic Ownership2) (as of 3/31/25)  % FDSO  Charter Shareholders1) (ex-Cox Ent, ex-A/N)  67%  Cox Enterprises  23%  Advance/Newhouse  10%  Total  100%  Charter  Charter Partnership  Charter  31.4M Customers  Cox Communications  6.3M Customers  69%  23%  Advance/  Newhouse  8%  Cox Enterprises  Cox Enterprises  Advance/ Newhouse  2%  98%  Charter Shareholders1) (ex-Cox Ent, ex-A/N)  126.6  Cox Enterprises Common Units, as-exchanged  33.6  Cox Ent. Preferred Units, as-converted, as-exchanged  12.6  Advance/Newhouse Common Units, as-exchanged  16.5  Advance/Newhouse Common Shares  3.1  Shares Outstanding  192.4  Fully Diluted Shares Outstanding (“FDSO”)  197.0  Common and preferred partnership units are exchangeable and convertible/exchangeable, respectively,  Charter and Cox Agree to Transforma
tive Combination  13  into Charter common shares  Common partnership units are exchangeable into  Charter common shares 
 

 Transaction Financing and Tax  Charter will receive additional tax basis step-up upon any future Cox’s conversion of partnership units into Charter common stock  Charter retains 50% of the cash tax savings value associated with the tax basis step-up received, if and when Cox Enterprises exchanges partnership units for Charter common shares  Cox Enterprises compensated on 50% of the net cash tax savings value associated with the tax basis step-up received by Charter, on a with and without FIFO basis, when the step-up benefits are used by Charter  1) Leverage is total principal amount of debt less cash and cash equivalents for the period ending 3/31/25 divided by LTM Adjusted EBITDA (see notes on slide 18) of $22.8B and $5.4B for Charter Communications (for the period ending 3/31/25) and  Cox Communications (for the period ending 12/31/24), respectively. The leverage calculations do not reflect the leverage calculations pursuant to Charter’s indentures or credit agreements.  Assumption of $12.0 billion of Cox Communications IG debt  and $0.7 billion of finance leases  $4.0 billion in new debt to fund cash payment to Cox  Given higher quantum, anticipate reducing target leverage to the middle of the 3.5x-4.0x range, over 2-3 years post-closing  Debt and Leverage1)  Financing  in Billions  Tax  1Q25 PF  Net Debt  2) Includes $2.6B of pro forma Liberty Broadband debt.  Charter and Cox Agree to Transformative Combination  14  1Q25 PF  Leverage  Charter  Charter Investment Grade ("IG") Debt  + Charter High Yield ("HY") Debt  + Liberty Broadband Debt  = Total Debt (PF for Liberty Broadband)  - Cash (PF for Liberty Broadband)  $66.4 27.3   2.6   96.2   1.2   =  Net Debt (PF for Liberty Broadband)  $95.0  4.16x  Cox  Total Debt (IG)  $12.0  -  Cash   0.1   =  Net Debt  $11.9  2.21x  PF Combined Company  Total IG Debt2)  $81.0  +  Total HY Debt  27.3  +  New IG Debt Raised at Close   4.0   =  Total Debt  112.2  -  Cash   1.3   =  Net Debt  $110.9  3.93x 
 

 Governance  Board Representation  Voting & Ownership  Preemptive Rights  13 directors at closing (unchanged)  The 3 Liberty Broadband members will resign at closing1) and Cox designates 3 directors  1) It is expected that the transaction will be completed contemporaneously with the previously announced Liberty Broadband transaction.  Charter and Cox Agree to Transformative Combination  15  Advance/Newhouse will continue to designate two board directors  Chris Winfrey will remain CEO and a  board member  Alex Taylor, CEO of Cox Enterprises, will become Chairman of the Board  Eric Zinterhofer will become lead independent director of the Board of Directors  Cox ownership and voting capped at 30%  A/N ownership now capped at 19% and voting capped at 15%  Cox and A/N required to participate in any share repurchase so as not to exceed their respective ownership caps, and transfer rights are generally restricted  Upon closing, Charter, Cox Enterprises and Advance/Newhouse will enter into an amended and restated stockholders agreement  Cox Enterprises and A/N receive preemptive rights to maintain certain ownership thresholds 
 

 Appendix 
 

 415  2,604 2,350  -  1,800  1,100  2,250  4,000  2,407  1,000  2,000  2,400  2,000  2,300  1,500  3,440  2,500  2,800  2,050  1,500  750  3,250  3,000 5,800  4,100  4,100  1,750  2,000  227  227  227  227  1,000 2,500  1,139  750  800  800  750  650  155  421  341  302  750  700  850  2,178 1,000  3,155  4,555  6,531  7,279  3,405 9,657  12,559  5,100  4,550  5,150  2,650  191  1,500  2,455  1,921  1,200  2,750  3,781  500  3,500  2,802  2,450  1,250  3,550  2,750  2,400 2,350  750  500  3,250  1,400  1,000  Debt Maturity Profile: Pro Forma as of 1Q251)  PF Debt Metrics  Weighted Average Cost of Debt = 5.1% Weighted Average Life of Debt = 12.5 Years Fixed Rate Debt = 90%  95% of debt matures beyond 2026  Run rate interest = $5.4bn  -  2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2045 2047 2048 2049 2050 2051 2052 2053 2054 2055 2061 2062 2063  CCO Secured Notes CCOH Unsecured Notes Revolving Credit Facility + Term Loan A (CCO “Pro Rata”) Other CCO Terms Loans PF Cox Debt2)  Includes term loan amortization due in that year for Charter.  Cox total debt for the period ending 3/31/25; excludes finance leases, unamortized discounts, and debt issuance costs.  Charter and Cox Agree to Transformative Combination  17  in $ Millions 
 

 Use of Non-GAAP Financial Metrics and Additional Information  Charter and Cox Agree to Transformative Combination  18  We use certain measures that are not defined by U.S. generally accepted accounting principles ("GAAP") to evaluate various aspects of our business. Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income attributable to Charter shareholders and net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by us, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA and free cash flow are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, in the financial addendum of our April 25, 2025 Form 8-K (Quarterly Earnings Release).  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 (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our businesses as well as other non-cash or special items, and is unaffected by our capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of financing. These costs are evaluated through other financial measures.  Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.  Management and Charter's board of directors use Adjusted EBITDA and free cash flow to assess Charter's performance and its ability to service its 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 million and $371 million for the three months ended March 31, 2025 and 2024, respectively.  For a reconciliation of Adjusted EBITDA and free cash flow to the most directly comparable GAAP financial measure, refer to the financial addendum of our April 25, 2025 Form 8-K (Quarterly Earnings Release).  Pro forma Adjusted EBITDA is Cox Communications adjusted EBITDA, as adjusted to reflect the elimination of expenses related to items not included in the transaction and certain  management adjustments, and is reconciled to Cox Communications net income on slide 19.  Customer relationships include the number of customers that receive one or more levels of service, encompassing Internet, video, mobile and voice services, without regard to which service(s) such customers receive. Customers who reside in residential multiple dwelling units ("MDUs") and that are billed under bulk contracts are counted based on the number of billed units within each bulk MDU. Total customer relationships exclude mid-market and large business relationships and mobile-only customer relationships. All company data based on respective company reporting methodologies, where there may be definitional differences. 
 

 COX COMMUNICATIONS  UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES (DOLLARS IN MILLIONS)  Twelve Months Ended December 31,  2024  Net income per historical financials  $  1,505  Plus: Interest expense, net  373  Income tax expense  434  Depreciation and amortization  2,419  Other, net  208  Adjusted EBITDA per historical financials  $  4,939  Pro forma adjustments:  Plus: Expenses not included in transaction and management adjustments  452  Pro forma Adjusted EBITDA1)  $  5,391  GAAP Reconciliations  Charter and Cox Agree to Transformative Combination  19  1) See notes on slide 18. 
 

 Investor Inquiries:  Stefan Anninger | 203.905.7955  [email protected]