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EX-99.3
4
tm2621145d1_ex99-3.htm
EXHIBIT 99.3

 

Exhibit 99.3

 

COX COMMUNICATIONS, INC.

(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)

TABLE OF CONTENTS

 

 

 
Page

Condensed Consolidated Financial Statements as of March 31,
2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025:
 

Condensed Consolidated Balance
Sheets (Unaudited)
2

Condensed Consolidated Statements
of Operations (Unaudited)
3

Condensed Consolidated Statements
of Cash Flows (Unaudited)
4

Condensed Consolidated Statements
of Changes in Equity (Unaudited)
5

Notes to Condensed Consolidated
Financial Statements (Unaudited)
6

 

- 1 -

 

 

COX COMMUNICATIONS, INC.

(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

   
March 31,    
December 31,  

(in millions)  
2026    
2025  

ASSETS  
       
     

Cash and cash equivalents  
$ 84    
$ 64  

Accounts receivable — net of
allowance of $41 and $38, respectively  
  650    
  657  

Amounts due from Cox Enterprises, Inc.  
  4,154    
  4,025  

Prepaid expenses
and other current assets  
  355    
  352  

Total current assets  
  5,243    
  5,098  

Property and equipment — net  
  12,534    
  12,603  

Goodwill  
  1,260    
  1,260  

Intangible assets — net  
  11,366    
  11,374  

Other noncurrent
assets  
  385    
  394  

TOTAL ASSETS  
$ 30,788    
$ 30,729  

   
       
     

LIABILITIES AND EQUITY  
       
     

Accounts payable  
$ 516    
$ 497  

Accrued labor and benefits  
  331    
  482  

Accrued programming costs  
  167    
  180  

Accrued expenses and other current
liabilities  
  790    
  790  

Current portion
of long-term debt  
  1,042    
  1,038  

Total current liabilities  
  2,846    
  2,987  

Long-term debt  
  11,464    
  11,474  

Deferred income taxes  
  4,545    
  4,446  

Other noncurrent
liabilities  
  454    
  873  

Total liabilities  
  19,309    
  19,780  

EQUITY  
       
     

Common stock, $1.00 par value; 1,000
shares authorized and 100 shares issued and outstanding  
  —    
  —  

Additional paid-in capital  
  4,568    
  4,540  

Retained earnings  
  6,911    
  6,409  

Total equity  
  11,479    
  10,949  

TOTAL LIABILITIES AND EQUITY  
$ 30,788    
$ 30,729  

 

See notes to Condensed Consolidated Financial Statements.

 

- 2 -

 

 

COX COMMUNICATIONS, INC.

(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

   
Three Months
Ended March 31,  

(in millions)  
2026    
2025  

REVENUES  
$ 3,059    
$ 3,183  

   
       
     

OPERATING EXPENSES:  
       
     

Operating
costs and expenses (a)  
  1,740    
  1,922  

Depreciation and amortization  
  538    
  544  

Other — net  
  46    
  (15 )

Total operating
expenses  
  2,324    
  2,451  

   
       
     

OPERATING INCOME  
  735    
  732  

   
       
     

NON-OPERATING EXPENSES:  
       
     

Interest expense — net  
  (111 )  
  (108 )

Investments income (expense) — net  
  1    
  (41 )

Miscellaneous income — net  
  15    
  7  

Total non-operating expenses  
  (95 )  
  (142 )

   
       
     

INCOME BEFORE INCOME TAXES  
  640    
  590  

INCOME TAX EXPENSE  
  (138 )  
  (129 )

NET INCOME  
$ 502    
$ 461  

 

(a)  See Note 8 — Transactions with Affiliated
Companies and Related Parties for impacts associated with related parties.

 

See notes to Condensed Consolidated Financial Statements.

 

- 3 -

 

 

COX COMMUNICATIONS, INC.

(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

   
Three Months
Ended March 31,  

(in millions)  
2026    
2025  

CASH FLOWS FROM OPERATING ACTIVITIES:  
       
     

Net income  
$ 502    
$ 461  

Adjustments to reconcile net income
to net cash provided by operating activities:  
       
     

Depreciation and amortization  
  538    
  544  

Deferred income taxes  
  11    
  (9 )

Investments (income) expense —
net  
  (1 )  
  41  

Provision for credit losses  
  21    
  18  

Restructuring and other  
  26    
  (144 )

Changes in certain assets and liabilities:  
       
     

(Increase) decrease in accounts receivable  
  (14 )  
  14  

Increase in prepaid expenses and other
assets  
  (5 )  
  (20 )

Increase (decrease) in accounts payable  
  19    
  (30 )

Decrease in accrued expenses and other
liabilities  
  (479 )  
  (185 )

Other —
net  
  6    
  (12 )

Net cash provided
by operating activities  
  624    
  678  

   
       
     

CASH FLOWS FROM INVESTING ACTIVITIES:  
       
     

Capital expenditures  
  (463 )  
  (501 )

(Increase) decrease in amounts due
from Cox Enterprises, Inc.  
  (129 )  
  515  

Other —
net  
  —    
  3  

Net cash (used
in) provided by investing activities  
  (592 )  
  17  

   
       
     

CASH FLOWS FROM FINANCING ACTIVITIES:  
       
     

Repayment of debt  
  (7 )  
  (706 )

Other —
net  
  (5 )  
  (3 )

Net cash used
in financing activities  
  (12 )  
  (709 )

   
       
     

NET CHANGE IN CASH AND CASH EQUIVALENTS  
  20    
  (14 )

   
       
     

CASH AND CASH EQUIVALENTS — Beginning
of period  
  64    
  97  

   
       
     

CASH AND CASH EQUIVALENTS — End
of period  
$ 84    
$ 83  

 

See notes to Condensed Consolidated Financial Statements.

 

- 4 -

 

 

COX COMMUNICATIONS, INC.

(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN EQUITY

(Unaudited)

 

 

(in millions)  
Common
Stock
   
Additional
Paid-In Capital    
Retained
Earnings
   
Total  

BALANCE — January 1, 2026  
$ —    
$ 4,540    
$ 6,409    
$ 10,949  

Net income  
  —    
  —    
  502    
  502  

Contribution to capital from Cox Enterprises, Inc.  
  —    
  28    
  —    
  28  

BALANCE — March 31, 2026  
$ —    
$ 4,568    
$ 6,911    
$ 11,479  

 

(in millions)  
Common
Stock
   
Additional
Paid-In Capital    
Retained
Earnings
   
Total  

BALANCE — January 1, 2025  
$ —    
$ 4,429    
$ 10,057    
$ 14,486  

Net income  
  —    
  —    
  461    
  461  

BALANCE — March 31, 2025  
$ —    
$ 4,429    
$ 10,518    
$ 14,947  

 

See notes to Condensed Consolidated Financial Statements.

 

- 5 -

 

 

COX COMMUNICATIONS, INC.

(A Wholly-Owned Subsidiary of Cox Enterprises, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

  

1.       DESCRIPTION
OF BUSINESS, BASIS OF PRESENTATION AND OTHER ITEMS

 

Cox Communications, Inc. (together with
its consolidated subsidiaries, "Cox" or "the Company"), a wholly-owned subsidiary of Cox Enterprises, Inc. ("CEI"),
is committed to creating meaningful moments of human connection through technology. As the largest private broadband company in the United
States, Cox operates fiber-powered networks in more than 30 states, providing connections and advanced managed IT and cloud services
for homes and businesses. Cox Mobile, Cox’s mobile phone service, is available across markets nationwide. The commercial division
of Cox, Cox Business, provides a broad commercial solutions portfolio, including advanced managed IT and cloud services and fiber-based
network solutions that support connected environments, unique hospitality experiences and diverse applications.

 

Basis of Presentation

 

The accompanying unaudited interim Condensed
Consolidated Financial Statements of Cox have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”)
for interim financial information. Accordingly, they do not include all of the information and footnote disclosures required by GAAP
for complete consolidated financial statements. In the opinion of management, the unaudited interim Condensed Consolidated Financial
Statements include all adjustments, of a normal recurring nature, necessary for a fair presentation of the condensed consolidated results
of operations, financial position and cash flows for the interim periods presented. All intercompany transactions and account balances
have been eliminated in consolidation. Cox has included the results of operations of acquired companies from the date of acquisition.
These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial
Statements and notes therein as of and for the year ended December 31, 2025. Results of operations for interim periods are not necessarily
indicative of results that might be expected for future interim periods or for the full year ending December 31, 2026.

 

Use of Estimates

 

The preparation of condensed consolidated financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the
reported amounts of revenues and expenses during the reporting periods. Estimates are evaluated based on available information and experience,
as well as other assumptions Cox believes reasonable under the circumstances. Actual results could differ from those estimates.

 

- 6 -

 

 

Revenue Recognition

 

   
Three Months
Ended March 31,  

(in millions)  
2026    
2025  

Residential  
     
   

Data  
$ 1,386    
$ 1,478  

Video  
  586    
  620  

Telephony  
  41    
  53  

Other
(a)  
  135    
  138  

Total residential  
  2,148    
  2,289  

   
       
     

Commercial  
  861    
  843  

Advertising  
  50    
  51  

Total revenues  
$ 3,059    
$ 3,183  

 

(a)   Other residential revenues includes
franchise, regulatory, and customer late fees, service protection fees, Cox Mobile and other
miscellaneous revenues.

 

Operating Costs and Expenses

 

   
Three Months
Ended March 31,  

(in millions)  
2026    
2025  

Programming costs  
$ 441    
$ 503  

Other costs of revenue  
  272    
  284  

Field and technology operations  
  230    
  256  

Customer operations  
  50    
  52  

Sales and marketing  
  252    
  267  

General and administrative  
  495    
  560  

Total operating costs and expenses  
$ 1,740    
$ 1,922  

 

Subsequent
Events

 

Cox has evaluated events that occurred subsequent
to March 31, 2026 for potential recognition and disclosure. Any applicable subsequent events have been evaluated through May 5,
2026, the date of issuance of the unaudited Condensed Consolidated Financial Statements.

 

2.        DIVESTITURE

 

Pending Divestiture
of Cox — In May 2025, Charter Communications, Inc. (“Charter”) and Charter Communications Holdings,
LLC (“Charter Holdings”) entered into a transaction agreement (“Transaction Agreement”) with CEI. Pursuant to
the Transaction Agreement, at the closing of the transactions, (i) CEI will sell and transfer to Charter 100% of the equity interests
of certain subsidiaries of Cox that conduct Cox’s commercial fiber and managed IT and cloud services businesses, (ii) CEI
will contribute the equity interests of Cox and certain other assets (other than certain excluded assets) primarily relating to Cox’s
residential cable business to Charter Holdings, and (iii) CEI will pay $1.00 to Charter (collectively the "Cox Transactions").
The combined entity will assume Cox's approximately $12.4 billion in outstanding net debt and finance leases.

 

On July 31, 2025, Charter’s shareholders
approved the Transaction Agreement.

 

- 7 -

 

 

3.        SUPPLEMENTAL
CASH FLOW INFORMATION

 

Cox's significant non-cash investing and financing
transactions and other supplemental cash flow information are as follows:

 

   
Three Months
Ended March 31,  

(in millions)  
2026    
2025  

Significant noncash transactions:  
       
     

Contribution to capital
from Cox Enterprises, Inc.  
$ 28    
$ —  

Property and equipment acquired under
finance leases and other financing arrangements  
  —    
  140  

   
       
     

Supplemental cash flow information:  
       
     

Cash paid for interest  
$ 166    
$ 178  

Cash
paid for income taxes (a)  
  127    
  138  

 

(a)   The amounts
disclosed as income taxes paid include both cash tax payments made directly to taxing authorities
and payments made by Cox to its parent in settlement of its share of consolidated income
tax obligations.

 

4.       RESTRUCTURING

 

During 2024, Cox announced a new organizational
structure, which allocates needed resources to growth areas of the business. As a result, certain restructuring initiatives were implemented,
which include severance costs. Restructuring related charges are recorded to other — net on the Condensed Consolidated Statement
of Operations.

 

The following represents the changes in the balances
of the restructuring-related liabilities, which are reflected within accrued compensation and benefits in the Condensed Consolidated
Balance Sheets as of March 31, 2026 and December 31, 2025.

 

(in millions)  
March 31,
2026    
December 31,
2025  

Balance at beginning of period  
$ 4    
$ 180  

Expense (a)  
  —    
  —  

Payments  
  (2 )  
  (176 )

Balance at end of period  
$ 2    
$ 4  

 

(a)  Restructuring-related
charges were recorded to other — net on the Condensed Consolidated Statement of Operations.

 

- 8 -

 

 

5.       DEBT

 

   
   
March 31,
2026    
December 31,
2025  

(in millions)  
Annual Interest

Rate  
Carrying

Value    
Fair Value    
Carrying

Value    
Fair Value  

Notes
and debentures with maturities (a) :  
   
       
       
       
     

Five years or less  
1.80% to 6.95%  
$ 3,889    
$ 3,800    
$ 3,889    
$ 3,160  

Between five and 10 years  
2.60% to 5.70%  
  3,000    
  2,813    
  3,000    
  3,514  

Greater than 10
years  
2.95% to 8.38%  
  4,960    
  3,875    
  4,960    
  3,957  

Total notes and
debentures  
   
  11,849    
$ 10,488    
  11,849    
$ 10,631  

Finance
lease obligations (b)(c)  
0.47% to 8.24%  
  730    
       
  737    
     

Less unamortized discounts, premiums
and issuance costs  
   
  (73 )  
       
  (74 )  
     

Total debt  
   
  12,506    
       
  12,512    
     

Less
current maturities (b)  
   
  1,042    
       
  1,038    
     

Total long-term debt  
   
$ 11,464    
       
$ 11,474    
     

 

(a)   Require semi-annual
cash interest payments based on their issuance dates.

(b)   Current portion
of finance lease obligations totaled $42 million and $38 million as of March 31, 2026
and December 31, 2025, respectively.

(c)   Cox leases
certain office facilities, cable transmission and distribution facilities, customer premise
equipment and automobiles under finance leases

 

Guarantee Agreements

 

Cox is a party to an amended and restated credit
agreement among Cox and CEI, as borrowers, and JP Morgan Chase Bank, N.A., as administrative agent, and certain other lenders and agents
(the “Credit Facility”). CEI designated Cox as a restricted subsidiary under the Credit Facility. At the same time, Cox provided
an unconditional guarantee of CEI’s obligations under the Credit Facility and CEI also provided an unconditional guarantee of Cox's
obligations under the Credit Facility, which will be automatically released upon the release of Cox's guarantee of CEI's obligations
under the Credit Facility. Cox will also guarantee CEI’s obligations under CEI’s commercial paper program. As of March 31,
2026 and December 31, 2025, CEI had no outstanding obligations under the Credit Facility and no outstanding commercial paper subject
to Cox’s guarantee.

 

In addition, Cox and CEI provide unconditional
cross-guarantees of the other’s obligations under each company’s respective outstanding notes (except for Cox's 6.53% debentures
due 2028, of which no material amounts are outstanding). CEI and Cox may release their obligations under the cross-guarantee simultaneously
with the other party’s release or in other customary circumstances. As of March 31, 2026 and December 31, 2025, CEI had
$175 million of outstanding notes subject to Cox's guarantee.

 

6.       COMMITMENTS
AND CONTINGENCIES

 

At the time of divesting an ownership interest
in an entity, Cox sometimes agrees to indemnify the buyer for certain liability risks. Cox believes that any liability to the Company
that may arise as a result of such indemnification agreements will not have a material adverse effect on the company taken as a whole.

 

Legal Proceedings

 

Sony Music et al. — In July 2018,
Sony Music Entertainment Inc., Warner Bros. Records Inc., Universal Music Corp. and several other music publishers and recording companies
filed a copyright infringement lawsuit against Cox. The plaintiffs allege that Cox’s practices of handling Digital Millennium Copyright
Act notices resulted in willful copyright infringement with respect to thousands of songs. Plaintiffs are seeking monetary damages.

 

- 9 -

 

 

In December 2019, a jury returned a verdict
of $1.0 billion against Cox, and a finding of contributory infringement, vicarious infringement and willfulness. Following various post-trial
motions, Cox appealed to the United States Court of Appeals for the Fourth Circuit. In addition to the merits appeal, Cox filed two Rule 60
motions in the trial court seeking relief from the verdict; those Rule 60 motions were heard and denied by the trial court in March 2022.
Cox appealed the Rule 60 rulings to the Fourth Circuit, which held the Rule 60 appeal in abeyance until after the merits appeal.
In February 2024, the Fourth Circuit affirmed the jury's finding of willful contributory infringement but reversed the jury's finding
of vicarious liability and vacated the $1.0 billion judgment against Cox. Both parties' petitions for a rehearing en banc were denied
by the Fourth Circuit. Cox also filed motions in the Fourth Circuit seeking partial appellate costs and an update regarding the Rule 60
appeal. Briefing concluded in the Rule 60 appeal in September 2024. Cox filed an unopposed motion to release the appeal bond,
which was granted in May 2024. Cox’s motion for costs on the judgment bond was denied in August 2024. The trial proceeding
has been stayed by the Fourth Circuit until the resolution of the Rule 60 appeal. In November 2024, in response to writs of
certiorari filed by both parties, the United States Supreme Court called for the view of the United States Solicitor General. In May 2025,
the United States Solicitor General submitted its brief amicus curiae recommending that Cox’s writ of certiorari be granted and
Sony’s writ of certiorari be denied. In June 2025, the United States Supreme Court granted Cox’s writ of certiorari
and denied Sony’s writ of certiorari. Cox’s opening brief was filed in August 2025. Oral argument was held in December 2025.
In March 2026, the United States Supreme Court reversed the Fourth Circuit's judgment, holding that as a matter of law, Cox’s
conduct did not meet the standard for contributory copyright infringement. Following remand to the Fourth Circuit, Cox expects the Fourth
Circuit to vacate its opinion, then enter its own judgment reversing and directing the district court to enter judgment in Cox’s
favor. After a mandate issues from the Fourth Circuit, the district court should also enter judgment for Cox.

 

TQ Delta — In July 2015, TQ
Delta filed an action against Cox alleging patent infringement of eight patents related to the Multimedia over Coax Alliance standard,
parts of which are alleged to be implemented in Whole Home DVR. The plaintiff voluntarily dropped two patents in response to the court’s
requirement that the number of claims be reduced. Inter Partes Reviews ("IPRs") were filed against the remaining six patents.
The Patent Trial and Appeal Board invalidated four of the patents during the IPR proceeding, but two patents survived on appeal to the
United States Court of Appeal for the Federal Circuit. The parties have engaged in expert discovery and are awaiting rulings on claim
construction and summary judgment. Trial is scheduled for October 2027. The outcome of this matter cannot be predicted at this time.

 

Entropic — In February 2023,
Entropic Communications filed two separate actions against Cox alleging patent infringement. The first case was brought with twelve patents
and was related to the Multimedia over Coax Alliance standard. The second case was brought with ten patents with allegations related
to the DOCSIS ("Data Over Cable Service Interface Speculation") and DOCSIS adjacent technologies. Through patent challenges
brought both with the Court and the Patent Trial and Appeals Board ("PTAB"), sixteen patents were effectively invalidated.
Entropic is in the process of appealing the rulings of invalidity issued by the U.S. Patent Office to the Federal Circuit. There has
been no activity in these cases beyond Claim Construction hearings and no schedule has been set in either case. The outcome of this matter
cannot be predicted at this time.

 

Other Patent Matters — Cox is a
defendant or co-defendant in several lawsuits involving alleged infringement of various patents relating to various aspects of its businesses.
In the event that a court ultimately determines that Cox infringes on any intellectual property rights, Cox may be subject to substantial
damages and/or an injunction that could require Cox or its vendors to modify certain products and services Cox offers to its subscribers,
as well as negotiate royalty or license agreements with respect to the patents at issue. While Cox intends to vigorously defend the actions,
no assurance can be given that any adverse outcome would not be material to Cox's Condensed Consolidated Financial Statements. Cox cannot
predict the outcome of any of these matters nor can it reasonably estimate a range of possible loss at this time.

 

- 10 -

 

 

Other Legal Proceedings — Cox and
its subsidiaries are parties to various other legal proceedings that are ordinary and incidental to their businesses.

 

7.      FAIR
VALUE MEASUREMENTS

 

Cox measures certain financial assets and liabilities
at fair value on a recurring basis and also measures certain nonfinancial assets at fair value on a nonrecurring basis. Fair value is
defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market
participants would use in pricing an asset or liability as defined in the below fair value hierarchy:

 

Level 1 — Observable
inputs such as quoted prices in active markets;

 

Level 2
— Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

 

Level 3
— Unobservable inputs in which there is little or no market data, which require an entity to develop its own assumptions.

 

Recurring Fair Value Measurements

 

Cash Equivalents — Cox's cash equivalents
are measured at fair value on a recurring basis and generally consist of money market funds, time deposits and commercial paper. The
fair values of Cox's cash equivalents fall within Level 1 of the fair value hierarchy and are based on a market approach using quoted
prices and other relevant information generated by market transactions involving identical or comparable assets.

 

Debt — Cox's notes and debentures
as of March 31, 2026 and December 31, 2025 is based on inputs other than quoted prices in active markets, that are observable
either directly or indirectly and are classified within Level 2.

 

Other Financial Instruments — The
carrying amounts of the Cox’s accounts receivable, accounts payable and other current assets and liabilities approximate fair value
due to their short-term maturities and/or nature of these instruments.

 

Non-Recurring Fair Value Measurements

 

Cox's nonfinancial assets (such as property and
equipment, goodwill and intangible assets), equity method investments and nonmarketable equity securities are not measured at fair value
on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that
an impairment may exist. Inputs used in these fair value measurements are often unobservable and may require judgment, which could affect
the ascribed fair values.

 

- 11 -

 

 

8.       TRANSACTIONS
WITH AFFILIATED COMPANIES

 

For all periods presented in the Condensed Consolidated
Financial Statements, related party transactions and activities between Cox, CEI and other CEI subsidiaries may not have been consummated
on terms equivalent to those that would prevail in an arm’s-length transaction where conditions of competitive, free-market dealing
may exist.

 

Allocated Expenses from CEI

 

Allocated expenses as shown in the table below
are directly calculated or based on CEI's estimate of services provided to Cox in relation to those provided to other CEI subsidiaries.
Cox believes that these allocations were made on a reasonable basis. However, the allocations are not necessarily indicative of the level
of expenses that might have been incurred had Cox contracted directly with third parties.

 

   
Three Months
Ended March 31,  

(in millions)  
2026    
2025  

Employee Benefit Plans  
       
     

Healthcare and other employee
benefits  
$ 68    
$ 64  

Qualified
and nonqualified pension (a)  
  1    
  18  

401(k) Plan  
  19    
  19  

Postemployment
and postretirement benefits (a)  
  4    
  5  

Long-term incentive compensation  
  28    
  34  

Other
Allocated Expenses (b)  
       
     

Management services  
  65    
  69  

Occupancy-related
services  
  8    
  7  

 

(a)   The service cost component related
to Cox’s qualified and nonqualified pension plans and postretirement benefits is recorded
to operating costs and expenses on the Condensed Consolidated Statements of Operations. The
non-service cost component, which includes interest cost, expected return on plan assets,
prior service cost amortization and actuarial loss amortization, is recorded to miscellaneous
income — net on the Condensed Consolidated Statements of Operations.

(b)   Cox receives certain management
(e.g., legal, corporate secretarial, tax, cash management, treasury, internal audit, risk
management, employee benefit administration and other support services) and occupancy-related
(e.g., repairs and maintenance, utilities, insurance and property taxes) services from CEI.

 

Amounts due from CEI

 

Cox receives day-to-day cash management services
from CEI, with settlements of outstanding balances between Cox and CEI occurring periodically. The amounts due from CEI are due on demand
and represent the net balance of the intercompany transactions. The interest rate is based on CEI's internal borrowing rate, generally
determined from CEI's rates under the Credit Facility, which ranged from 3.76% to 3.78% during the three months ended March 31,
2026, and 4.41% to 4.43% during the three months ended March 31, 2025. The associated interest income was $41 million and $45 million
for the three months ended March 31, 2026 and 2025, respectively.

 

Other Related Party Transactions

 

There are various other related party activities
between Cox and related parties that individually and in the aggregate, are not material to Cox's Condensed Consolidated Financial Statements.

 

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