Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.6.0.2
Segment Information
 12 Months Ended
Dec. 31, 2016
Segment Information  
Segment Information

(15) Segment Information

Liberty Broadband identifies its reportable segments as (A) those consolidated companies that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets and (B) those equity method affiliates whose share of earnings or losses represent 10% or more of Liberty Broadband’s annual pre-tax earnings (losses).

Liberty Broadband evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA. In addition, Liberty Broadband reviews nonfinancial measures such as subscriber growth.

Liberty Broadband defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). Liberty Broadband 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 earnings, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Liberty Broadband generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

For the year ended December 31, 2016, Liberty Broadband has identified the following consolidated company and equity method investment as its reportable segments:

·

Skyhook— a wholly owned subsidiary of the Company that provides a Wi-Fi based location platform focused on providing positioning technology and contextual location intelligence solutions. 

·

Charter—an equity method investment that is one of the largest providers of cable services in the United States, offering a variety of entertainment, information and communications solutions to residential and commercial customers.

Liberty Broadband’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 segments that are also consolidated companies are the same as those described in the Company’s summary of significant accounting policies in the Company’s annual financial statements. For periods in which Liberty Broadband owned Charter shares and warrants, we have included amounts attributable to Charter in the tables below. Although Liberty Broadband owns less than 100% of the outstanding shares of Charter, 100% of the Charter amounts are included in the schedule below and subsequently eliminated in order to reconcile the account totals to the Liberty Broadband consolidated financial statements.

Performance Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

 

2016

 

2015

 

2014

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in thousands

 

Skyhook

    

$
30,586

    
(2,681)

    
91,182

    
43,600

    
69,045

    
(2,152)

 

Charter

 

 
29,003,000

 
10,506,000

 
9,754,000

 
3,317,000

 
9,108,000

 
3,128,000

 

Corporate and other

 

 

 —

 
(8,761)

 

—

 
(11,958)

 

—

 
(1,559)

 

 

 

 
29,033,586

 
10,494,558

 
9,845,182

 
3,348,642

 
9,177,045

 
3,124,289

 

Eliminate equity method affiliate

 

 
(29,003,000)

 
(10,506,000)

 
(9,754,000)

 
(3,317,000)

 
(9,108,000)

 
(3,128,000)

 

Consolidated Liberty Broadband

 

$
30,586

 
(11,442)

 
91,182

 
31,642

 
69,045

 
(3,711)

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2016

 

December 31, 2015

 

 

 

Total

 

Investments

 

Capital

 

Total

 

Investments

 

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in thousands

 

Skyhook

    

$
30,463

    

 —

    
267

    
61,395

    

 —

    
731

 

Charter

 

 
149,067,000

 

 —

 
5,325,000

 
39,316,000

 

 —

 
1,840,000

 

Corporate and other

 

 
9,560,497

 
9,315,253

 

 —

 
3,504,346

 
2,372,699

 

 —

 

 

 

 
158,657,960

 
9,315,253

 
5,325,267

 
42,881,741

 
2,372,699

 
1,840,731

 

Eliminate equity method affiliate

 

 
(149,067,000)

 

 —

 
(5,325,000)

 
(39,316,000)

 

 —

 
(1,840,000)

 

Consolidated Liberty Broadband

 

$
9,590,960

 
9,315,253

 
267

 
3,565,741

 
2,372,699

 
731

 

 

Revenue by Geographic Area

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

 

2016

 

2015

 

2014

 

 

 

amounts in thousands

 

United States

    

$
27,806

    
87,739

    
66,045

 

Other countries

 

 
2,780

 
3,443

 
3,000

 

 

 

$
30,586

 
91,182

 
69,045

 

 

Long-lived Assets by Geographic Area

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2016

 

2015

 

 

 

amounts in thousands

 

United States

    

$
710

    
1,248

 

Other countries

 

 

 —

 

 —

 

 

 

$
710

 
1,248

 

 

The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

 

2016

 

2015

 

2014

 

 

 

amounts in thousands

 

Consolidated segment Adjusted OIBDA

    

$
(11,442)

    
31,642

    
(3,711)

 

Stock-based compensation

 

 
(5,713)

 
(6,380)

 
(999)

 

Depreciation and amortization

 

 
(4,005)

 
(6,088)

 
(9,043)

 

Gain on legal settlement

 

 

 —

 
60,450

 
6,000

 

Impairment of intangible assets

 

 

 —

 
(20,669)

 
(35,221)

 

Operating income (loss)

 

 
(21,160)

 
58,955

 
(42,974)

 

Interest expense

 

 
(14,956)

 
(7,424)

 
(1,138)

 

Dividend and interest income

 

 
5,020

 
3,797

 
5,426

 

Share of earnings (loss) of affiliates, net

 

 
641,544

 
(120,962)

 
(127,573)

 

Realized and unrealized gains (losses) on financial instruments, net

 

 
94,122

 
2,619

 
51,189

 

Gain (loss) on dilution of investment in affiliate

 

 
770,766

 
(7,198)

 
(87,158)

 

Other, net

 

 
336

 
158

 
(63)

 

Earnings (loss) from continuing operations before income taxes

 

$
1,475,672

 
(70,055)

 
(202,291)