Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.7.0.1
Segment Information
 6 Months Ended
Jun. 30, 2017
Segment Information  
Segment Information

(9) 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 represent 10% or more of Liberty Broadband’s annual pre-tax earnings.

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

Liberty Broadband defines Adjusted OIBDA as revenue less 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 six months ended June 30, 2017, Liberty Broadband has identified the following consolidated subsidiary 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 of the Company 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. 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 condensed consolidated financial statements.

Performance Measures 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  June 30,

 

 

 

2017

 

2016

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

 

(amounts in thousands)

 

Skyhook

    

$

3,073

    

(3,299)

    

2,966

    

(6,218)

 

Charter

 

 

10,357,000

 

3,712,000

 

6,161,000

 

1,669,000

 

Corporate and other

 

 

 —

 

(1,656)

 

 —

 

(2,317)

 

 

 

 

10,360,073

 

3,707,045

 

6,163,966

 

1,660,465

 

Eliminate equity method affiliate

 

 

(10,357,000)

 

(3,712,000)

 

(6,161,000)

 

(1,669,000)

 

Consolidated Liberty Broadband

 

$

3,073

 

(4,955)

 

2,966

 

(8,535)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30,

 

 

 

2017

 

2016

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

(amounts in thousands)

 

Skyhook

    

$

6,213

    

(5,859)

    

6,797

    

(10,188)

 

Charter

 

 

20,521,000

 

7,272,000

 

8,691,000

 

2,534,000

 

Corporate and other

 

 

—

 

(3,057)

 

—

 

(5,079)

 

 

 

 

20,527,213

 

7,263,084

 

8,697,797

 

2,518,733

 

Eliminate equity method affiliate

 

 

(20,521,000)

 

(7,272,000)

 

(8,691,000)

 

(2,534,000)

 

Consolidated Liberty Broadband

 

$

6,213

 

(8,916)

 

6,797

 

(15,267)

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

 

 

 

Total

 

Investments

 

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

(amounts in thousands)

 

Skyhook

    

$

24,826

    

—

    

 9

 

Charter

 

 

146,960,000

 

—

 

3,703,000

 

Corporate and other

 

 

9,577,973

 

9,335,451

 

—

 

 

 

 

156,562,799

 

9,335,451

 

3,703,009

 

Eliminate equity method affiliate

 

 

(146,960,000)

 

 —

 

(3,703,000)

 

Consolidated Liberty Broadband

 

$

9,602,799

 

9,335,451

 

 9

 

 

The following table provides a reconciliation of segment Adjusted OIBDA to operating income (loss) and earnings (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months

 

Six months

 

 

 

ended June 30,

 

ended June 30,

 

 

 

2017

 

2016

 

2017

    

2016

 

 

 

 

(amounts in thousands)

 

Consolidated segment Adjusted OIBDA

    

$

(4,955)

    

(8,535)

    

(8,916)

    

(15,267)

 

Stock-based compensation

 

 

(1,429)

 

(1,224)

 

(2,877)

 

(2,846)

 

Depreciation and amortization

 

 

(949)

 

(978)

 

(1,902)

 

(1,964)

 

Operating income (loss)

 

 

(7,333)

 

(10,737)

 

(13,695)

 

(20,077)

 

Interest expense

 

 

(4,826)

 

(4,016)

 

(9,381)

 

(6,457)

 

Dividend and interest income

 

 

459

 

2,318

 

797

 

4,507

 

Share of earnings (loss) of affiliates

 

 

11,467

 

621,410

 

30,389

 

551,132

 

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

 

 

1,370

 

47,985

 

2,351

 

92,990

 

Gain (loss) on dilution of investment in affiliate

 

 

(6,659)

 

778,129

 

(38,797)

 

776,405

 

Other, net

 

 

 3

 

36

 

 2

 

107

 

Earnings (loss) before income taxes

 

$

(5,519)

 

1,435,125

 

(28,334)

 

1,398,607