Liberty Broadband Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Segment Information

Segment Information

12 Months Ended

Dec. 31, 2020

(16) 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 and Adjusted OIBDA. In addition, Liberty Broadband reviews nonfinancial measures such as subscriber growth.

For segment reporting purposes, Liberty Broadband defines Adjusted OIBDA as revenue less operating expenses and selling, general and administrative expenses (excluding stock-based compensation and transaction costs). Liberty Broadband believes this measure is an important indicator of the operational strength and performance of its businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. 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, transaction costs, 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, 2020, Liberty Broadband has identified the following consolidated company and equity method investment as its reportable segments:

●

GCI Holdings – a wholly owned subsidiary of the Company that 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.

●

Skyhook— a wholly owned subsidiary of the Company that provides the Precision Location Solution (a location determination service).

●

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. 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,
	2020			2019		2018
			Adjusted		Adjusted		Adjusted
	Revenue		OIBDA	Revenue	OIBDA	Revenue	OIBDA

	amounts in thousands
GCI Holdings	$	33,670	9,509	—	—	—	—
Skyhook		17,036	(3,689)	14,859	(4,704)	22,256	3,161
Charter		48,097,000	18,460,000	45,764,000	16,752,000	43,634,000	15,824,000
Corporate and other		—	(19,965)	—	(12,187)	—	(6,689)
		48,147,706	18,445,855	45,778,859	16,735,109	43,656,256	15,820,472
Eliminate equity method affiliate		(48,097,000)	(18,460,000)	(45,764,000)	(16,752,000)	(43,634,000)	(15,824,000)
Consolidated Liberty Broadband	$	50,706	(14,145)	14,859	(16,891)	22,256	(3,528)

Other Information


	December 31, 2020				December 31, 2019
	Total		Investments	Capital	Total	Investments	Capital
	assets		in affiliates	expenditures	assets	in affiliates	expenditures

	amounts in thousands
GCI Holdings	$	3,676,511	424	1,775	—	—	—
Skyhook		12,336	—	43	18,145	—	500
Charter		144,206,000	—	7,415,000	148,188,000	—	7,195,000
Corporate and other		17,682,277	16,179,261	—	12,238,197	12,194,674	—
		165,577,124	16,179,685	7,416,818	160,444,342	12,194,674	7,195,500
Eliminate equity method affiliate		(144,206,000)	—	(7,415,000)	(148,188,000)	—	(7,195,000)
Consolidated Liberty Broadband	$	21,371,124	16,179,685	1,818	12,256,342	12,194,674	500

Revenue by Geographic Area


	Years ended December 31,
	2020		2019	2018

	amounts in thousands
United States	$	48,529	12,507	19,946
Other countries		2,177	2,352	2,310
	$	50,706	14,859	22,256

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


	Years ended December 31,
	2020		2019	2018

	amounts in thousands
Consolidated segment Adjusted OIBDA	$	(14,145)	(16,891)	(3,528)
Stock-based compensation		(9,134)	(10,511)	(5,707)
Depreciation and amortization		(15,227)	(1,875)	(2,779)
Transaction costs		(21,149)	—	—
Operating income (loss)		(59,655)	(29,277)	(12,014)
Interest expense		(28,158)	(25,166)	(23,302)
Share of earnings (loss) of affiliates, net		713,329	286,401	166,146
Gain (loss) on dilution of investment in affiliate		(183,575)	(79,329)	(43,575)
Realized and unrealized gains (losses) on financial instruments, net		(83,070)	1,170	3,659
Other, net		2,294	1,359	963
Earnings (loss) before income taxes	$	361,165	155,158	91,877

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details