Quarterly report pursuant to Section 13 or 15(d)

Information About the Company's Operating Segments

v3.10.0.1
Information About the Company's Operating Segments
 6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Information About the Company's Operating Segments
Information About the Company's Operating Segments

The Company, through its interests in subsidiaries and other companies, is primarily engaged in the broadband communications services industry. The Company identifies its reportable segments as (A) those consolidated companies that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of the Company’s annual pre‑tax earnings. The segment presentation for prior periods has been conformed to the current period segment presentation.

The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, and subscriber metrics.
    
The Company defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock‑based compensation). The Company believes this measure is an important indicator of the operational strength and performance of its businesses, including each business’s ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock‑based compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP.

For the three and six months ended June 30, 2018 the Company has identified the following subsidiary as a reportable segment:

•
GCI Holdings-provides a full range of wireless, data, video, voice, and managed services to residential, businesses, governmental entities, and educational and medical institutions primarily in Alaska.

For presentation purposes the Company is providing financial information for Liberty Broadband. While the Company’s equity method investment in Liberty Broadband does not meet the reportable segment threshold defined above, the Company believes that the inclusion of such information is relevant to users of these financial statements.
•
Liberty Broadband-an equity method affiliate of the Company, accounted for at fair value, has a non‑controlling interest in Charter, and a wholly‑owned subsidiary, Skyhook Wireless, Inc. ("Skyhook"). Charter is the second largest cable operator in the United States and a leading broadband communications services company providing video, Internet and voice services. Skyhook provides a Wi‑Fi based location platform focused on providing positioning technology and contextual location intelligence solutions.
The Company’s operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the consolidated subsidiaries included in the segments are the same as those described in the Company’s summary of significant accounting policies.
Performance Measures
 
Three Months Ended June 30,
 
2018
 
2017
 
Revenue
 
Adjusted OIBDA
 
Revenue
 
Adjusted OIBDA
 
amounts in thousands
GCI Holdings
$
227,781

 
78,915

 
—

 
—

Liberty Broadband
3,371

 
(2,776
)
 
3,073

 
(4,955
)
Corporate and other
5,709

 
(7,191
)
 
6,177

 
(6,922
)
 
236,861

 
68,948

 
9,250

 
(11,877
)
Eliminate Liberty Broadband
(3,371
)
 
2,776

 
(3,073
)
 
4,955

 
$
233,490

 
71,724

 
6,177

 
(6,922
)


 
Six Months Ended June 30,
 
2018
 
2017
 
Revenue
 
Adjusted OIBDA
 
Revenue
 
Adjusted OIBDA
 
amounts in thousands
GCI Holdings
$
284,573

 
98,663

 
—

 
—

Liberty Broadband
15,162

 
1,784

 
6,213

 
(8,916
)
Corporate and other
10,121

 
(13,051
)
 
10,146

 
(14,794
)
 
309,856

 
87,396

 
16,359

 
(23,710
)
Eliminate Liberty Broadband
(15,162
)
 
(1,784
)
 
(6,213
)
 
8,916

 
$
294,694

 
85,612

 
10,146

 
(14,794
)


Other Information
 
 
June 30, 2018
 
 
Total
 
Investments
 
Capital
 
 
assets
 
in affiliates
 
expenditures
 
 
amounts in thousands
GCI Holdings
 
$
3,530,980

 
—

 
38,788

Liberty Broadband
 
12,002,928

 
11,891,637

 
24

Corporate and other
 
5,813,117

 
121,880

 
1,515

 
 
21,347,025

 
12,013,517

 
40,327

Eliminate Liberty Broadband
 
(12,002,928
)
 
(11,891,637
)
 
(24
)
Consolidated
 
$
9,344,097

 
121,880

 
40,303



The following table provides a reconciliation of segment Adjusted OIBDA to operating income and earnings (loss) from continuing operations before income taxes:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
amounts in thousands
Consolidated segment Adjusted OIBDA
$
71,724

 
(6,922
)
 
85,612

 
(14,794
)
Stock‑based compensation
(7,929
)
 
(3,873
)
 
(13,165
)
 
(6,599
)
Depreciation and amortization
(64,388
)
 
(822
)
 
(80,409
)
 
(1,575
)
Operating income
(593
)
 
(11,617
)
 
(7,962
)
 
(22,968
)
Interest expense
(35,442
)
 
(5
)
 
(43,690
)
 
(5
)
Share of earnings (loss) of affiliates, net
10,350

 
1,600

 
7,858

 
3,323

Realized and unrealized gains (losses) on financial instruments, net
(428,356
)
 
60,449

 
(499,837
)
 
798,001

Other, net
(1,845
)
 
541

 
(148
)
 
750

Earnings (loss) from continuing operations before income taxes
$
(455,886
)
 
50,968

 
(543,779
)
 
779,101