Liberty Broadband Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Investments in Affiliates Accounted for Using the Equity Method

Investments in Affiliates Accounted for Using the Equity Method

9 Months Ended

Sep. 30, 2020

Investments in Affiliates Accounted for Using the Equity Method

Investments in Affiliates Accounted for Using the Equity Method

(5) Investments in Affiliates Accounted for Using the Equity Method

The Company has various investments accounted for using the equity method. The following table includes the Company’s carrying amount and percentage ownership of the more significant investments in affiliates at September 30, 2020 and the carrying amount at December 31, 2019:


	September 30, 2020							December 31, 2019
	Percentage			Market		Carrying		Carrying
	ownership			value		amount		amount

	dollars in thousands
LendingTree (a)		26.3	%	$	1,056,926	$	156,627	166,465
Other		various			NA		857	1,178
						$	157,484	167,643

(a)

Both the Company's ownership interest in LendingTree and the Company's share of LendingTree's earnings (losses) are reported on a three month lag. The market value disclosed is as of September 30, 2020.

The Company’s share of LendingTree’s earnings (losses) were losses of $9.1 million and earnings of $2.0 million for the three months ended September 30, 2020 and 2019, respectively. The Company's share of LendingTree's earnings (losses) were losses of $7.3 million and $1.4 million for the nine months ended September 30, 2020 and 2019, respectively.

Investment in Liberty Broadband

As of September 30, 2020, the Company has a 23.7% economic ownership interest in Liberty Broadband. Due to overlapping boards of directors and management, the Company has been deemed to have significant influence over Liberty Broadband for accounting purposes, even though the Company does not have any voting rights. The Company has elected to apply the fair value option for its investment in Liberty Broadband (Level 1) as it is believed that investors value this

investment based on the trading price of Liberty Broadband. The Company recognizes changes in the fair value of its investment in Liberty Broadband in realized and unrealized gains (losses) on financial instruments, net in the accompanying condensed consolidated statements of operations. Summarized financial information for Liberty Broadband is as follows:


	September 30,		December 31,
	2020		2019
	amounts in thousands
Current assets	$	402,492	52,133
Investment in Charter, accounted for using the equity method		12,450,425	12,194,674
Other assets		8,772	9,535
Total assets		12,861,689	12,256,342
Long-term debt		1,318,664	572,944
Deferred income tax liabilities		1,036,672	999,757
Other liabilities		19,103	15,695
Equity		10,487,250	10,667,946
Total liabilities and shareholders' equity	$	12,861,689	12,256,342


	Three months ended			Nine months ended
	September 30,			September 30,
	2020		2019	2020		2019

	amounts in thousands
Revenue	$	4,219	3,713		12,437	10,918
Operating expenses, net		(20,547)	(11,301)		(45,872)	(31,873)
Operating income (loss)		(16,328)	(7,588)		(33,435)	(20,955)
Share of earnings (losses) of affiliates		188,586	61,633		408,396	141,882
Gain (loss) on dilution of investment in affiliate		(35,284)	(11,219)		(140,610)	(68,944)
Realized and unrealized gains (losses) on financial instruments, net		(39,324)	(433)		(39,324)	(433)
Other income (expense), net		(3,711)	(5,773)		(14,512)	(17,829)
Income tax benefit (expense)		(24,979)	(9,124)		(47,183)	(8,474)
Net earnings (loss)	$	68,960	27,496		133,332	25,247

(1)

(2)