8-KOther EventsExhibits & Filings

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Corporate Update (Feb 24, 2021)

Filed February 24, 2021For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) announced on February 23, 2021, a Letter Agreement with Liberty Broadband Corporation (LBB) to implement LBB's obligations under a 2015 Stockholders Agreement. This agreement aims to ensure LBB's ownership in Charter does not exceed a specified cap ('LBB Cap') as Charter engages in share repurchases. Under the new agreement, LBB will sell shares of Charter's Class A common stock back to Charter on a monthly basis. The purchase price will be based on Charter's average repurchase price from the preceding month, excluding certain types of repurchases. This mechanism is designed to manage LBB's proportional ownership as Charter actively reduces its outstanding share count, which is a common strategy for enhancing shareholder value.

Key Highlights

  • 1Charter Communications entered into a Letter Agreement with Liberty Broadband Corporation (LBB) on February 23, 2021.
  • 2The agreement addresses LBB's obligation to maintain its ownership percentage within a specified 'LBB Cap' as Charter conducts share repurchases.
  • 3LBB will sell Class A Common Stock back to Charter monthly to comply with the ownership cap.
  • 4The purchase price for these shares will be based on Charter's preceding month's volume-weighted average repurchase price.
  • 5Specific exclusions apply to the calculation of the repurchase price, such as purchases from Advance and privately negotiated transactions.
  • 6The Letter Agreement has defined termination conditions, including mutual agreement, termination of the underlying Stockholders Agreement, or a notice period.
  • 7This action is a proactive measure to manage shareholding structures in conjunction with Charter's ongoing share repurchase activities.

Frequently Asked Questions

The main purpose is to ensure that Liberty Broadband Corporation's (LBB) ownership percentage in Charter Communications does not exceed a predetermined cap (the 'LBB Cap') as Charter actively repurchases its own shares. LBB will sell shares back to Charter to maintain this compliance.

Charter will pay a price per share equal to the volume-weighted average price Charter paid for its repurchases during the immediately preceding calendar month. However, certain repurchases, like those from Advance, private deals, or for equity compensation withholding, are excluded from this calculation.

The agreement terminates upon mutual written agreement of both parties, if the underlying Stockholders Agreement terminates with respect to Charter or LBB, or after a specified notice period if either party decides to terminate the agreement. However, any repurchase period ongoing at the time of termination would still be subject to the agreement's terms.

This agreement appears to be a mechanism to manage existing shareholder agreements in the context of Charter's ongoing share repurchase program. It doesn't necessarily indicate a new or changed capital allocation strategy, but rather a way to ensure compliance with existing stakeholder agreements as repurchases continue.