8-KOther EventsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Corporate Update (Dec 22, 2017)

Filed December 22, 2017For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) has filed an 8-K report detailing an amendment to a prior agreement with Advance/Newhouse Partnership (A/N). The amendment allows A/N to exchange an additional $400 million worth of common units in Charter Holdings for shares of Charter's Class A common stock. This exchange, which occurred on December 21, 2017, involved 1,263,497 common units being converted into an equal number of Class A shares. Furthermore, the amended agreement provides both parties with the option to terminate or suspend a 'Repurchase Participation' provision. This provision previously required A/N to participate in Charter's share repurchases on a pro rata basis. This amendment could impact the dynamics of future share buybacks and capital allocation. The company anticipates an immediate step-up in the tax basis of Charter Holdings' assets resulting from the exchange, with the tax benefits to be shared equally with A/N under an existing Tax Receivables Agreement.

Key Highlights

  • 1Amendment to existing agreement with Advance/Newhouse Partnership (A/N) executed on December 21, 2017.
  • 2A/N to exchange an additional $400 million of Charter Holdings common units for Charter Class A common stock.
  • 3Completed exchange of 1,263,497 common units for 1,263,497 Class A shares on December 21, 2017.
  • 4Option for either Charter or A/N to terminate or suspend the Repurchase Participation provision.
  • 5Potential for an immediate step-up in the tax basis of Charter Holdings' assets due to the exchange.
  • 6Charter and A/N will equally share the tax benefits from the asset basis step-up, as per the Tax Receivables Agreement.
  • 7Sales under the agreement are subject to Liberty Broadband Corporation's right of first refusal.

Frequently Asked Questions

The amendment allows Advance/Newhouse Partnership (A/N) to exchange an additional $400 million worth of Charter Holdings common units for Charter's Class A common stock. It also modifies the terms related to Charter's share repurchase participation by A/N.

The Repurchase Participation provision required A/N to participate proportionally in Charter's share buybacks from other parties. The amendment gives both Charter and A/N the right to terminate or suspend this provision prospectively, offering more flexibility in managing share repurchases.

Charter expects an immediate step-up in the tax basis of Charter Holdings' assets as a result of the exchange. The company will share the resulting tax benefits equally with A/N, which could improve future tax efficiency.

Yes, any sale of shares or units by A/N to Charter or Charter Holdings under this agreement is subject to the right of first refusal held by Liberty Broadband Corporation, as per a prior agreement.