UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission File Number
(Exact name of Registrant as specified in its charter)
State of | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated Filer ☐ | Non-accelerated Filer ☐ | Smaller Reporting Company | Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes
The number of outstanding shares of Liberty Broadband Corporation’s common stock as of July 31, 2021 was:
Series A | Series B | Series C | ||||
Liberty Broadband Corporation common stock | ||||||
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Table of Contents
Part I - Financial Information
I-1
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Balance Sheets
(unaudited)
June 30, | December 31, | |||||
2021 | 2020 |
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amounts in thousands |
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Assets |
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Current assets: | ||||||
Cash and cash equivalents | $ | |
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Trade and other receivables, net of allowance for doubtful accounts of $ | | | ||||
Other current assets |
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Total current assets |
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Investment in Charter, accounted for using the equity method (note 5) |
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Property and equipment, net | | | ||||
Intangible assets not subject to amortization | ||||||
Goodwill | | | ||||
Cable certificates | | | ||||
Other | | | ||||
Intangible assets subject to amortization, net (note 6) | | | ||||
Tax sharing receivable | | | ||||
Other assets, net |
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Total assets | $ | |
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See accompanying notes to the condensed consolidated financial statements.
I-2
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Balance Sheets (Continued)
(unaudited)
June 30, | December 31, | |||||
2021 | 2020 |
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amounts in thousands, |
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except share amounts | ||||||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | $ | |
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Deferred revenue |
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Current portion of debt, including $ | | | ||||
Indemnification obligation (note 4) | | | ||||
Other current liabilities | | | ||||
Total current liabilities |
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Long-term debt, net, including $ | | | ||||
Obligations under finance leases and tower obligations, excluding current portion | | | ||||
Long-term deferred revenue | | | ||||
Deferred income tax liabilities | | | ||||
Preferred stock (note 8) | | | ||||
Other liabilities | | | ||||
Total liabilities |
| |
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Equity | ||||||
Series A common stock, $ | | | ||||
Series B common stock, $ | | | ||||
Series C common stock, $ | | | ||||
Additional paid-in capital | | | ||||
Accumulated other comprehensive earnings, net of taxes |
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Retained earnings |
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Total stockholders' equity | | | ||||
Non-controlling interests | | | ||||
Total equity |
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Commitments and contingencies (note 10) |
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Total liabilities and equity | $ | |
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See accompanying notes to the condensed consolidated financial statements.
I-3
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Operations
(unaudited)
Three months ended | Six months ended |
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June 30, | June 30, |
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2021 |
| 2020 |
| 2021 | 2020 |
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amounts in thousands, except per share amounts | ||||||||||
$ | | | | | ||||||
Operating costs and expenses | ||||||||||
Operating, including stock-based compensation (note 9) | | | |
| | |||||
Selling, general and administrative, including stock-based compensation and transaction costs (note 9) | | | |
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Depreciation and amortization | | | |
| | |||||
Litigation settlement | — | — | | — | ||||||
| | |
| | ||||||
Operating income (loss) | ( | ( | ( |
| ( | |||||
Other income (expense): | ||||||||||
Interest expense (including amortization of deferred loan fees) | ( | ( | ( | ( | ||||||
Share of earnings (losses) of affiliates (note 5) | | | |
| | |||||
Gain (loss) on dilution of investment in affiliate (note 5) | ( | ( | ( |
| ( | |||||
Realized and unrealized gains (losses) on financial instruments, net (note 4) | ( | — | ( |
| — | |||||
Other, net | | | |
| | |||||
Earnings (loss) before income taxes | | | |
| | |||||
Income tax (expense) benefit | ( | ( | ( |
| ( | |||||
Net earnings (loss) | | | | | ||||||
Less net earnings (loss) attributable to the non-controlling interests | ( | — | ( | — | ||||||
Net earnings (loss) attributable to Liberty Broadband shareholders | $ | | | |
| | ||||
Basic net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2) | $ | | | | | |||||
Diluted net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2) | $ | | | | |
See accompanying notes to the condensed consolidated financial statements.
I-4
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Comprehensive Earnings (Loss)
(unaudited)
Three months ended | Six months ended |
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June 30, | June 30, |
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2021 |
| 2020 |
| 2021 | 2020 |
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amounts in thousands |
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Net earnings (loss) |
| $ | | | |
| | |||
Other comprehensive earnings (loss), net of taxes: | ||||||||||
Comprehensive earnings (loss) attributable to debt credit risk adjustments | ( | — | ( |
| — | |||||
Other comprehensive earnings (loss), net of taxes | ( | — | ( | — | ||||||
Comprehensive earnings (loss) | | | |
| | |||||
Less comprehensive earnings (loss) attributable to the non-controlling interests | ( | — | ( | — | ||||||
Comprehensive earnings (loss) attributable to Liberty Broadband shareholders | $ | | | |
| |
See accompanying notes to the condensed consolidated financial statements.
I-5
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited)
Six months ended | ||||||
June 30, |
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2021 | 2020 |
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amounts in thousands |
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Cash flows from operating activities: |
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Net earnings (loss) | $ | |
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Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||
Depreciation and amortization |
| |
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Stock-based compensation |
| |
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Litigation settlement | | — | ||||
Share of (earnings) losses of affiliate, net |
| ( |
| ( | ||
(Gain) loss on dilution of investment in affiliate |
| |
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Realized and unrealized (gains) losses on financial instruments, net |
| |
| — | ||
Deferred income tax expense (benefit) |
| ( |
| | ||
Other, net |
| ( |
| | ||
Changes in operating assets and liabilities: | ||||||
Current and other assets |
| |
| ( | ||
Payables and other liabilities |
| ( |
| | ||
Net cash provided by (used in) operating activities |
| |
| ( | ||
Cash flows from investing activities: | ||||||
Capital expenditures | ( | ( | ||||
Exercise of preemptive right to purchase Charter shares | — | ( | ||||
Cash received for Charter shares repurchased by Charter | | — | ||||
Other investing activities, net | | — | ||||
Net cash provided by (used in) investing activities | | ( | ||||
Cash flows from financing activities: | ||||||
Borrowings of debt | | — | ||||
Repayments of debt, finance leases and tower obligations | ( | — | ||||
Repurchases of Liberty Broadband common stock | ( | — | ||||
Other financing activities, net |
| ( |
| ( | ||
Net cash provided by (used in) financing activities |
| ( |
| ( | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( |
| ( | |||
Cash, cash equivalents and restricted cash, beginning of period | | | ||||
Cash, cash equivalents and restricted cash, end of period | $ | | |
The following table reconciles cash and cash equivalents and restricted cash reported in the accompanying condensed consolidated balance sheets to the total amount presented in the accompanying condensed consolidated statement of cash flows:
June 30, | December 31, | |||||
2021 | 2020 | |||||
amounts in thousands | ||||||
Cash and cash equivalents | $ | | | |||
| | |||||
Total cash and cash equivalents and restricted cash at end of period | $ | | |
See accompanying notes to the condensed consolidated financial statements.
I-6
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Equity
(unaudited)
Accumulated | Noncontrolling | |||||||||||||||||
Additional | other | interest in | ||||||||||||||||
Common stock | paid-in | comprehensive | Retained | equity of | ||||||||||||||
Series A |
| Series B |
| Series C |
| capital | earnings | earnings | subsidiaries | Total equity | ||||||||
amounts in thousands | ||||||||||||||||||
Balance at January 1, 2021 |
| $ | | | | |
| |
| | |
| | |||||
Net earnings (loss) | — | — | — | — |
| — |
| | ( |
| | |||||||
Other comprehensive loss | — | — | — | — | ( | — | — | ( | ||||||||||
Stock-based compensation | — | — | — | | — | — | — | | ||||||||||
Issuance of common stock upon exercise of stock options | — | — | — | | — | — | — | | ||||||||||
Withholding taxes on net share settlements of stock-based compensation | — | — | — | ( | — | — | — | ( | ||||||||||
Series C Liberty Broadband stock repurchases | — | — | ( | ( | — | — | — | ( | ||||||||||
Noncontrolling interest activity at Charter and other | — | — | — | | — | — | — | | ||||||||||
Balance at June 30, 2021 | $ | | | | |
| |
| | |
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Accumulated | Noncontrolling |
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Additional | other | interest in |
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Common stock | paid-in | comprehensive | Retained | equity of |
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Series A |
| Series B |
| Series C |
| capital | earnings | earnings | subsidiaries | Total equity |
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amounts in thousands |
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Balance at March 31, 2021 | $ | | | | |
| |
| | |
| | ||||||
Net earnings (loss) | — | — | — | — | — | | ( | | ||||||||||
Other comprehensive loss | — | — | — | — | ( | — | — | ( | ||||||||||
Stock-based compensation | — | — | — | | — | — | — | | ||||||||||
Issuance of common stock upon exercise of stock options | — | — | — | | — | — | — | | ||||||||||
Withholding taxes on net share settlements of stock-based compensation | — | — | — | ( | — | — | — | ( | ||||||||||
Series C Liberty Broadband stock repurchases | — | — | ( | ( | — | — | — | ( | ||||||||||
Noncontrolling interest activity at Charter and other | — | — | — | | — | — | — | | ||||||||||
Balance at June 30, 2021 | $ | | | | | | | | |
See accompanying notes to the condensed consolidated financial statements.
I-7
LIBERTY BROADBAND CORPORATION
Condensed Consolidated Statements of Equity (continued)
(unaudited)
Accumulated | ||||||||||||||||
Additional | other | |||||||||||||||
Common stock | paid-in | comprehensive | Retained | |||||||||||||
Series A |
| Series B |
| Series C |
| capital | earnings | earnings | Total equity | |||||||
amounts in thousands | ||||||||||||||||
Balance at January 1, 2020 | $ | | | | | | | | ||||||||
Net earnings (loss) | — | — | — | — | — | | | |||||||||
Stock-based compensation | — | — | — | | — | — | | |||||||||
Issuance of common stock upon exercise of stock options | — | — | | | — | — | | |||||||||
Withholding taxes on net share settlements of stock-based compensation | — | — | — | ( | — | — | ( | |||||||||
Noncontrolling interest activity at Charter | — | — | — | ( | — | — | ( | |||||||||
Balance at June 30, 2020 | $ | | | | | | | |
Accumulated |
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Additional | other |
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Common stock | paid-in | comprehensive | Retained |
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Series A |
| Series B |
| Series C |
| capital | earnings | earnings | Total equity |
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amounts in thousands |
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Balance at March 31, 2020 |
| $ | | | | | | | | |||||||
Net earnings (loss) |
| — | — | — | — | — | | | ||||||||
Stock-based compensation | — | — | — | | — | — | | |||||||||
Issuance of common stock upon exercise of stock options | — | — | — | | — | — | | |||||||||
Withholding taxes on net share settlements of stock-based compensation | — | — | — | ( | — | — | ( | |||||||||
Noncontrolling interest activity at Charter | — | — | — | ( | — | — | ( | |||||||||
Balance at June 30, 2020 | $ | | | | | | | |
See accompanying notes to the condensed consolidated financial statements.
I-8
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
(1) Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of Liberty Broadband Corporation and its controlled subsidiaries (collectively, "Liberty Broadband," the "Company," “us,” “we,” or “our” unless the context otherwise requires). Liberty Broadband Corporation is primarily comprised of a wholly owned subsidiary, GCI Holdings, LLC (“GCI Holdings”) (as of December 18, 2020) and an equity method investment in Charter Communications, Inc. (“Charter”).
On December 18, 2020, pursuant to the Agreement and Plan of Merger, dated as of August 6, 2020, entered into by GCI Liberty, Inc. (“GCI Liberty”), Liberty Broadband, Grizzly Merger Sub 1, LLC, a wholly owned subsidiary of Liberty Broadband (“Merger LLC”), and Grizzly Merger Sub 2, Inc., a wholly owned subsidiary of Merger LLC (“Merger Sub”), Merger Sub merged with and into GCI Liberty (the “First Merger”), with GCI Liberty surviving the First Merger as an indirect wholly owned subsidiary of Liberty Broadband (the “Surviving Corporation”), and immediately following the First Merger, GCI Liberty (as the Surviving Corporation in the First Merger) merged with and into Merger LLC (the “Upstream Merger”, and together with the First Merger, the “Combination”), with Merger LLC surviving the Upstream Merger as a wholly owned subsidiary of Liberty Broadband.
As a result of the Combination, each holder of a share of Series A common stock and Series B common stock of GCI Liberty received
The accompanying (a) condensed consolidated balance sheet as of December 31, 2020, which has been derived from audited financial statements, and (b) interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Liberty Broadband's Annual Report on Form 10-K for the year ended December 31, 2020. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) the application of the equity method of accounting for its affiliates, (ii) non-recurring fair value measurements of non-financial instruments and (iii) accounting for income taxes to be its most significant estimates.
In December 2019, Chinese officials reported a novel coronavirus outbreak (“COVID-19”). COVID-19 has since spread through China and internationally. On March 11, 2020, the World Health Organization assessed COVID-19 as a global pandemic, causing many countries throughout the world to take aggressive actions, including imposing travel restrictions and stay-at-home orders, closing public attractions and restaurants, and mandating social distancing practices, which has caused a significant disruption to most sectors of the economy.
I-9
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
We are not presently aware of any events or circumstances arising from the COVID-19 pandemic that would require us to update our estimates or judgments or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the condensed consolidated financial statements. Actual results could differ from estimates, and any such differences may be material to our financial statements.
Through a number of prior years’ transactions, including the Combination, Liberty Broadband has acquired an interest in Charter. Liberty Broadband holds an investment in Charter that is accounted for using the equity method. Liberty Broadband does not control the decision making process or business management practices of this affiliate. Accordingly, Liberty Broadband relies on the management of this affiliate to provide it with accurate financial information prepared in accordance with GAAP that the Company uses in the application of the equity method. In addition, Liberty Broadband relies on audit reports that are provided by the affiliate's independent auditor on the financial statements of such affiliate. The Company is not aware, however, of any errors in or possible misstatements of the financial information provided by its equity affiliate that would have a material effect on Liberty Broadband's condensed consolidated financial statements.
Spin-Off Arrangements
During May 2014, the board of directors of Liberty Media Corporation and its subsidiaries (“Liberty”) authorized management to pursue a plan to spin-off to its stockholders common stock of a wholly owned subsidiary, Liberty Broadband, and to distribute subscription rights to acquire shares of Liberty Broadband’s common stock (the “Broadband Spin-Off”). In connection with the Broadband Spin-Off, Liberty (for accounting purposes a related party of the Company) and Liberty Broadband entered into certain agreements in order to govern certain of the ongoing relationships between the two companies and to provide for an orderly transition, including a services agreement and a facilities sharing agreement. Under the facilities sharing agreement, Liberty Broadband shares office space with Liberty and related amenities at Liberty’s corporate headquarters. Liberty Broadband will reimburse Liberty for direct, out-of-pocket expenses incurred by Liberty in providing these services which will be negotiated semi-annually.
Pursuant to the services agreement, Liberty provides Liberty Broadband with general and administrative services including legal, tax, accounting, treasury and investor relations support. In December 2019, the Company entered into an amendment to the services agreement with Liberty in connection with Liberty’s entry into a new employment arrangement with Gregory B. Maffei, the Company’s President and Chief Executive Officer. Under the amended services agreement, components of his compensation would either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc., GCI Liberty, and Qurate Retail, Inc. (“Qurate Retail”) (collectively, the “Service Companies”) or reimbursed to Liberty, in each case, based on allocations among Liberty and the Service Companies set forth in the amended services agreement, currently set at
Additionally, in connection with a prior transaction, GCI Liberty and Qurate Retail (for accounting purposes a related party of the Company) entered into a tax sharing agreement, which was assumed by Liberty Broadband as a result of the Combination. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Qurate Retail and Liberty Broadband and other agreements related to tax matters.
Under these various agreements, amounts reimbursable to Liberty were approximately $
I-10
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
(2) Earnings Attributable to Liberty Broadband Stockholders Per Common Share
Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) attributable to Liberty Broadband shareholders by the weighted average number of common shares outstanding (“WASO”) for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. Excluded from diluted EPS for the three months ended June 30, 2021 and 2020 are
Liberty Broadband Common Stock | |||||||||
Three months | Three months | Six months | Six months |
| |||||
ended | ended | ended | ended | ||||||
| June 30, 2021 |
| June 30, 2020 |
| June 30, 2021 |
| June 30, 2020 |
| |
(numbers of shares in thousands) | |||||||||
Basic WASO |
| |
| |
| |
| | |
Potentially dilutive shares (1) |
| |
| |
| |
| | |
Diluted WASO |
| |
| |
| |
| |
(1) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive.
(3) Acquisition
On December 18, 2020, the Company completed the Combination with GCI Liberty. The Company accounted for the Combination using the acquisition method of accounting.
The following details the acquisition consideration as of December 18, 2020 (amounts in thousands), which is primarily based on level 1 inputs:
Fair value of newly issued Liberty Broadband Series C and B common stock 1 | $ | | ||
Fair value of newly issued Liberty Broadband Preferred Stock 2 | | |||
Fair value of share-based payment replacement awards 3 | | |||
Total fair value of consideration | | |||
Less: Fair value of Liberty Broadband shares attributable to share repurchase 4 | ( | |||
Total fair value of consideration attributable to business combination | | |||
Less: Fair value of newly issued Liberty Broadband Preferred Stock2 | ( | |||
Less: Fair value of share-based payment replacement awards accounted for as liability awards | ( | |||
Total fair value of acquisition consideration to be allocated | $ | |
(1) | The fair value of newly issued Series C and B Liberty Broadband common stock was calculated by multiplying (i) the outstanding shares of GCI Liberty Series A and B common stock as of December 18, 2020, (ii) the exchange ratio of |
I-11
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
(2) | The fair value of the newly issued Liberty Broadband Preferred Stock was calculated by multiplying (i) the outstanding shares of GCI Liberty Preferred Stock as of December 18, 2020 and (ii) the closing share price of GCI Liberty Preferred Stock on December 18, 2020. The GCI Liberty Preferred Stock was converted on a |
(3) | This amount represents the fair value of share-based payment replacement awards. |
(4) | GCI Liberty owned approximately |
The application of the acquisition method resulted in the assignment of purchase price to the GCI Liberty assets acquired and liabilities assumed based on preliminary estimates of their acquisition date fair values (primarily level 3). The determination of the fair values of the acquired assets and liabilities (and the determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment.
The preliminary acquisition purchase price allocation for GCI Liberty is as follows (amounts in thousands):
Cash and cash equivalents including restricted cash |
| $ | |
Receivables |
| | |
Property and equipment |
| | |
Goodwill |
| | |
Investment in Charter | | ||
Intangible assets not subject to amortization |
| | |
Intangible assets subject to amortization |
| | |
Other assets |
| | |
Deferred revenue |
| ( | |
Debt, including obligations under tower and finance leases |
| ( | |
Indemnification liability | ( | ||
Deferred income tax liabilities |
| ( | |
Preferred stock |
| ( | |
Non-controlling interest |
| ( | |
Other liabilities |
| ( | |
$ | |
Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, value associated with future customers, continued innovation and non-contractual relationships. Amortizable intangible assets of $
I-12
LIBERTY BROADBAND CORPORATION
Notes to Condensed Consolidated Financial Statements
(unaudited)
The unaudited pro forma revenue, net earnings and basic and diluted net earnings per common share of Liberty Broadband, prepared utilizing the historical financial statements of Liberty Broadband, giving effect to acquisition accounting related adjustments made at the time of acquisition, as if the acquisition discussed above occurred on January 1, 2019, are as follows:
Three months ended | Six months ended | ||||||
June 30, 2020 | June 30, 2020 | ||||||
amounts in thousands, | |||||||
except per share amounts | |||||||
Revenue | $ | | | ||||
Net earnings (loss) | $ | ( | | ||||
Net earnings (loss) attributable to Liberty Broadband shareholders | $ | ( | | ||||
Basic net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share | $ | ( | | ||||
Diluted net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share | $ | ( | |
The pro forma results include adjustments directly attributable to the business combination including adjustments related to the amortization of acquired tangible and intangible assets, revenue, interest expense, stock-based compensation, and the exclusion of transaction related costs. The pro forma information is not representative of the Company’s future results of operations nor does it reflect what the Company’s results of operations would have been if the