UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36713

LIBERTY BROADBAND CORPORATION

(Exact name of Registrant as specified in its charter)


State of Delaware		47-1211994
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

12300 Liberty Boulevard Englewood, Colorado		80112
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (720) 875-5700

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Series A common stock	LBRDA	The Nasdaq Stock Market LLC
Series C common stock	LBRDK	The Nasdaq Stock Market LLC
Series A Cumulative Redeemable preferred stock	LBRDP	The Nasdaq Stock Market LLC

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. Yes ⌧ No ◻

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). Yes ⌧ No ◻

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.


Large Accelerated Filer ☒		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 ☐ No ☒

The number of outstanding shares of Liberty Broadband Corporation’s common stock as of July 31, 2022 was:

Table of Contents

Table of Contents

Part I - Financial Information

f
	Page No
Item 1. Financial Statements
LIBERTY BROADBAND CORPORATION Condensed Consolidated Balance Sheets (unaudited)	I-2
LIBERTY BROADBAND CORPORATION Condensed Consolidated Statements of Operations (unaudited)	I-4
LIBERTY BROADBAND CORPORATION Condensed Consolidated Statements of Comprehensive Earnings (Loss) (unaudited)	I-5
LIBERTY BROADBAND CORPORATION Condensed Consolidated Statements of Cash Flows (unaudited)	I-6
LIBERTY BROADBAND CORPORATION Condensed Consolidated Statements of Equity (unaudited)	I-7
LIBERTY BROADBAND CORPORATION Notes to Condensed Consolidated Financial Statements (unaudited)	I-9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	I-27
Item 3. Quantitative and Qualitative Disclosures about Market Risk	I-40
Item 4. Controls and Procedures	I-41

Part II - Other Information

Item 1. Legal Proceedings	II-1
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	II-1
Item 6. Exhibits	II-2

SIGNATURES	II-3

I-1

Table of Contents

LIBERTY BROADBAND CORPORATION

Condensed Consolidated Balance Sheets

(unaudited)


	June 30,		December 31,
	2022		2021

	amounts in millions
Assets
Current assets:
Cash and cash equivalents	$	301	191
Trade and other receivables, net of allowance for credit losses of $4 and $4, respectively		179	206
Prepaid and other current assets		71	62
Total current assets		551	459
Investment in Charter, accounted for using the equity method (note 4)		12,051	13,260
Property and equipment, net		1,013	1,031
Intangible assets not subject to amortization
Goodwill		755	762
Cable certificates		550	550
Other		37	37
Intangible assets subject to amortization, net (note 5)		546	573
Tax sharing receivable		44	86
Other assets, net		191	210
Total assets	$	15,738	16,968

See accompanying notes to the condensed consolidated financial statements.

I-2

Table of Contents

LIBERTY BROADBAND CORPORATION

Condensed Consolidated Balance Sheets (Continued)

(unaudited)


	June 30,		December 31,
	2022		2021

	amounts in millions,
	except share amounts
Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities	$	100	99
Deferred revenue		21	25
Current portion of debt, including zero and $25 measured at fair value, respectively (note 6)		3	28
Indemnification obligation (note 3)		175	324
Other current liabilities		149	106
Total current liabilities		448	582
Long-term debt, net, including $1,342 and $1,403 measured at fair value, respectively (note 6)		3,770	3,733
Obligations under finance leases and tower obligations, excluding current portion		88	89
Long-term deferred revenue		36	35
Deferred income tax liabilities		1,999	1,998
Preferred stock (note 7)		203	203
Other liabilities		166	189
Total liabilities		6,710	6,829
Equity
Series A common stock, $.01 par value. Authorized 500,000,000 shares; issued and outstanding 21,633,055 and 23,232,342 at June 30, 2022 and December 31, 2021, respectively		—	—
Series B common stock, $.01 par value. Authorized 18,750,000 shares; issued and outstanding 2,328,901 and 2,544,548 at June 30, 2022 and December 31, 2021, respectively		—	—
Series C common stock, $.01 par value. Authorized 500,000,000 shares; issued and outstanding 132,311,691 and 144,854,780 at June 30, 2022 and December 31, 2021, respectively		1	1
Additional paid-in capital		4,319	6,214
Accumulated other comprehensive earnings, net of taxes		30	14
Retained earnings		4,662	3,898
Total stockholders' equity		9,012	10,127
Non-controlling interests		16	12
Total equity		9,028	10,139
Commitments and contingencies (note 9)
Total liabilities and equity	$	15,738	16,968

See accompanying notes to the condensed consolidated financial statements.

I-3

Table of Contents

LIBERTY BROADBAND CORPORATION

Condensed Consolidated Statements of Operations

(unaudited)


	Three months ended			Six months ended
	June 30,			June 30,
	2022		2021	2022	2021

	amounts in millions, except per share amounts
Revenue	$	239	242	477	489
Operating costs and expenses:
Operating expense (exclusive of depreciation and amortization shown separately below)		60	67	126	136
Selling, general and administrative, including stock-based compensation (note 8)		105	110	206	215
Depreciation and amortization		65	67	129	131
Litigation settlement, net of recoveries (note 9)		10	—	10	110
		240	244	471	592
Operating income (loss)		(1)	(2)	6	(103)
Other income (expense):
Interest expense (including amortization of deferred loan fees)		(30)	(29)	(56)	(62)
Share of earnings (losses) of affiliate (note 4)		386	249	689	438
Gain (loss) on dilution of investment in affiliate (note 4)		(11)	(15)	(67)	(97)
Realized and unrealized gains (losses) on financial instruments, net (note 3)		77	(125)	214	(26)
Gain (loss) on dispositions, net (note 1)		179	—	179	—
Other, net		(18)	23	(39)	15
Earnings (loss) before income taxes		582	101	926	165
Income tax benefit (expense)		(117)	(45)	(162)	(57)
Net earnings (loss)		465	56	764	108
Less net earnings (loss) attributable to the non-controlling interests		—	—	—	—
Net earnings (loss) attributable to Liberty Broadband shareholders	$	465	56	764	108
Basic net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2)	$	2.89	0.30	4.66	0.57
Diluted net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2)	$	2.87	0.30	4.63	0.56

See accompanying notes to the condensed consolidated financial statements.

I-4

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LIBERTY BROADBAND CORPORATION

Condensed Consolidated Statements of Comprehensive Earnings (Loss)

(unaudited)


	Three months ended			Six months ended
	June 30,			June 30,
	2022		2021	2022	2021

	amounts in millions
Net earnings (loss)	$	465	56	764	108
Other comprehensive earnings (loss), net of taxes:
Comprehensive earnings (loss) attributable to debt credit risk adjustments		20	(4)	16	(4)
Other comprehensive earnings (loss), net of taxes		20	(4)	16	(4)
Comprehensive earnings (loss)		485	52	780	104
Less comprehensive earnings (loss) attributable to the non-controlling interests		—	—	—	—
Comprehensive earnings (loss) attributable to Liberty Broadband shareholders	$	485	52	780	104

See accompanying notes to the condensed consolidated financial statements.

I-5

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LIBERTY BROADBAND CORPORATION

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Six months ended
	June 30,
	2022		2021

	amounts in millions
Cash flows from operating activities:
Net earnings (loss)	$	764	108
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		129	131
Stock-based compensation		18	20
Litigation settlement, net of recoveries		10	110
Share of (earnings) losses of affiliate, net		(689)	(438)
(Gain) loss on dilution of investment in affiliate		67	97
Realized and unrealized (gains) losses on financial instruments, net		(214)	26
Deferred income tax expense (benefit)		1	(18)
(Gain) loss on dispositions, net		(179)	—
Other, net		(3)	(2)
Changes in operating assets and liabilities:
Current and other assets		113	137
Payables and other liabilities		1	(60)
Net cash provided by (used in) operating activities		18	111
Cash flows from investing activities:
Capital expenditures		(78)	(50)
Cash received for Charter shares repurchased by Charter		1,806	1,762
Cash proceeds from dispositions, net		163	—
Other investing activities, net		4	2
Net cash provided by (used in) investing activities		1,895	1,714
Cash flows from financing activities:
Borrowings of debt		300	717
Repayments of debt, finance leases and tower obligations		(203)	(1,781)
Repurchases of Liberty Broadband common stock		(1,890)	(1,957)
Other financing activities, net		(3)	(2)
Net cash provided by (used in) financing activities		(1,796)	(3,023)
Net increase (decrease) in cash, cash equivalents and restricted cash		117	(1,198)
Cash, cash equivalents and restricted cash, beginning of period		206	1,433
Cash, cash equivalents and restricted cash, end of period	$	323	235

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,
	2022		2021

	amounts in millions
Cash and cash equivalents	$	301	191
Restricted cash included in other current assets		22	15
Total cash and cash equivalents and restricted cash at end of period	$	323	206

See accompanying notes to the condensed consolidated financial statements.

I-6

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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 millions
Balance at January 1, 2022	$	—	—	1	6,214	14	3,898	12	10,139
Net earnings (loss)		—	—	—	—	—	764	—	764
Other comprehensive earnings (loss), net of taxes		—	—	—	—	16	—	—	16
Stock-based compensation		—	—	—	18	—	—	—	18
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(3)	—	—	—	(3)
Liberty Broadband stock repurchases		—	—	—	(1,890)	—	—	—	(1,890)
Noncontrolling interest activity at Charter and other		—	—	—	(20)	—	—	4	(16)
Balance at June 30, 2022	$	—	—	1	4,319	30	4,662	16	9,028


						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 millions
Balance at March 31, 2022	$	—	—	1	5,375	10	4,197	16	9,599
Net earnings (loss)		—	—	—	—	—	465	—	465
Other comprehensive earnings (loss), net of taxes		—	—	—	—	20	—	—	20
Stock-based compensation		—	—	—	9	—	—	—	9
Liberty Broadband stock repurchases		—	—	—	(1,047)	—	—	—	(1,047)
Noncontrolling interest activity at Charter and other		—	—	—	(18)	—	—	—	(18)
Balance at June 30, 2022	$	—	—	1	4,319	30	4,662	16	9,028

See accompanying notes to the condensed consolidated financial statements.

I-7

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LIBERTY BROADBAND CORPORATION

Condensed Consolidated Statements of Equity (continued)

(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 millions
Balance at January 1, 2021	$	—	—	2	10,320	15	3,166	12	13,515
Net earnings (loss)		—	—	—	—	—	108	—	108
Other comprehensive earnings (loss), net of taxes		—	—	—	—	(4)	—	—	(4)
Stock-based compensation		—	—	—	20	—	—	—	20
Issuance of common stock upon exercise of stock options		—	—	—	1	—	—	—	1
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(3)	—	—	—	(3)
Liberty Broadband stock repurchases		—	—	—	(1,957)	—	—	—	(1,957)
Noncontrolling interest activity at Charter and other		—	—	—	150	—	—	—	150
Balance at June 30, 2021	$	—	—	2	8,531	11	3,274	12	11,830


						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 millions
Balance at March 31, 2021	$	—	—	2	9,563	15	3,218	12	12,810
Net earnings (loss)		—	—	—	—	—	56	—	56
Other comprehensive earnings (loss), net of taxes		—	—	—	—	(4)	—	—	(4)
Stock-based compensation		—	—	—	10	—	—	—	10
Issuance of common stock upon exercise of stock options		—	—	—	1	—	—	—	1
Liberty Broadband stock repurchases		—	—	—	(1,219)	—	—	—	(1,219)
Noncontrolling interest activity at Charter and other		—	—	—	176	—	—	—	176
Balance at June 30, 2021	$	—	—	2	8,531	11	3,274	12	11,830

See accompanying notes to the condensed consolidated financial statements.

I-8

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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 GCI Holdings, LLC (“GCI Holdings”), a wholly owned subsidiary, and an equity method investment in Charter Communications, Inc. (“Charter”).

On December 18, 2020, GCI Liberty, Inc. (“GCI Liberty”) was merged with Liberty Broadband (the “Combination”) and Liberty Broadband acquired GCI Holdings, as further described in Liberty Broadband's Annual Reports on Form 10-K for the years ended December 31, 2021 and 2020.

The accompanying (a) condensed consolidated balance sheet as of December 31, 2021, 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, 2021. 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 affiliate, (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 caused a significant disruption to most sectors of the economy at varying levels during the periods covered by the financial statements.

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. The investment in Charter 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.

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LIBERTY BROADBAND CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Skyhook Holdings, Inc. (“Skyhook”) was a wholly owned subsidiary of Liberty Broadband until its sale on May 2, 2022 for aggregate consideration of approximately $194 million, including amounts held in escrow of approximately $23 million. Liberty Broadband recognized a gain on the sale of $179 million, net of fees contingent upon closing, in the second quarter of 2022, which is recorded in Gain (loss) on dispositions, net in the accompanying condensed consolidated statement of operations. Skyhook is included in Corporate and other through April 30, 2022 and is not presented as a discontinued operation as the sale did not represent a strategic shift that had a major effect on Liberty Broadband’s operations and financial results. Included in Revenue in the accompanying condensed consolidated statements of operations is $1 million and $5 million for the three months ended June 30, 2022 and 2021, respectively, and $6 million and $9 million for the six months ended June 30, 2022 and 2021, respectively, related to Skyhook. Included in Net earnings (loss) in the accompanying condensed consolidated statement of operations are earnings of $1 million and losses of $1 million for the three months ended June 30, 2022 and 2021, respectively, and earnings of $4 million and losses of $1 million for the six months ended June 30, 2022 and 2021, respectively, related to Skyhook. Included in Total assets in the accompanying condensed consolidated balance sheets as of December 31, 2021 is $18 million related to Skyhook.

As described in note 4, we are currently participating in Charter’s share buyback program in order to maintain our fully diluted ownership percentage of 26%. The primary use of those proceeds has been to repurchase Liberty Broadband Series A and Series C common stock pursuant to our authorized share repurchase programs. On February 23, 2021, a duly authorized committee of the board of directors authorized the repurchase of $2.23 billion of Liberty Broadband common stock. Additionally, on August 5, 2021, a duly authorized committee of the board of directors authorized the repurchase of an additional $2.105 billion of Liberty Broadband common stock. Further, on January 26, 2022, a duly authorized committee of the board of directors authorized the repurchase of an additional $2.215 billion of Liberty Broadband common stock.

During the six months ended June 30, 2022, we repurchased 14.4 million shares of Liberty Broadband Series A and Series C common stock for a total purchase price of $1,890 million. During the six months ended June 30, 2021, we repurchased 12.5 million shares of Liberty Broadband Series C common stock for a total purchase price of $1,957 million. As of June 30, 2022, the amount authorized remaining under the authorized repurchase program is approximately $994 million.

Exchange Agreement with Chairman

On June 13, 2022, Liberty Broadband entered into an Exchange Agreement with its Chairman of the board of directors, John C. Malone, and a revocable trust of which Mr. Malone is the sole trustee and beneficiary (the “JM Trust”) (the “Exchange Agreement”), whereby, among other things, Mr. Malone agreed to an arrangement under which his aggregate voting power in the Company would not exceed 49% (the “Target Voting Power”) plus 0.5% (under certain circumstances).

The Exchange Agreement provides for exchanges by the Company and Mr. Malone or the JM Trust of shares of Liberty Broadband Series B common stock for shares of Liberty Broadband Series C common stock in connection with certain events, including (i) any event that would result in a reduction in the outstanding votes that may be cast by holders of the Company’s voting securities or an increase of Mr. Malone’s beneficially-owned voting power in the Company (an “Accretive Event”), in each case, such that Mr. Malone’s voting power in the Company would exceed the Target Voting Power plus 0.5%; or (ii) from and after the occurrence of any Accretive Event, in connection with any event that would result in an increase in the outstanding votes that may be cast by holders of the Company’s voting securities or a decrease of Mr. Malone’s beneficially-owned voting power in the Company (a “Dilutive Event”), in each case, such that Mr. Malone’s voting power in the Company falls below the Target Voting Power less 0.5%. Additionally, the Exchange Agreement contains certain provisions with respect to fundamental events at the Company, meaning any combination, consolidation, merger, exchange offer, split-off, spin-off, rights offering or dividend, in each case, as a result of which holders of Liberty Broadband Series B common stock are entitled to receive securities of the Company, securities of another person, property or cash, or a combination thereof.

In connection with an Accretive Event, Mr. Malone or the JM Trust will be required to exchange with the Company shares of Liberty Broadband Series B common stock (as exchanged, the “Exchanged Series B Shares”) for an equal number

I-10

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LIBERTY BROADBAND CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

of shares of Liberty Broadband Series C common stock (as exchanged, the “Exchanged Series C Shares”) so as to maintain Mr. Malone’s voting power as close as possible to, without exceeding, the Target Voting Power, on the terms and subject to the conditions of the Exchange Agreement.

In connection with a Dilutive Event, Mr. Malone and the JM Trust may exchange the Exchanged Series C Shares with the Company for an equal number of shares of Liberty Broadband Series B common stock equal to the lesser of (i) the number of shares of Liberty Broadband Series B common stock which would maintain Mr. Malone’s voting power as close as possible to, without exceeding, the Target Voting Power and (ii) the number of Exchanged Series B Shares at such time, on the terms and subject to the conditions of the Exchange Agreement.

Under the Exchange Agreement, the JM trust exchanged 215,647 shares of Liberty Broadband Series B common stock for the same number of Liberty Broadband Series C common stock on June 13, 2022, and exchanged 211,255 shares of Liberty Broadband Series B common stock for the same number of Liberty Broadband Series C common stock on July 19, 2022.

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. 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 33% for the Company but subject to adjustment on an annual basis upon the occurrence of certain events.

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 $2 million and $3 million for the three months ended June 30, 2022 and 2021, respectively, and $5 million and $7 million for the six months ended June 30, 2022 and 2021, respectively. Liberty Broadband had a tax sharing receivable with Qurate Retail of $44 million and $86 million as of June 30, 2022 and December 31, 2021, respectively.

Recently Announced Accounting Pronouncements

In November 2021, the Financial Accounting Standards Board issued new accounting guidance which will require annual disclosures about certain government transactions that are accounted for by applying a grant or contribution accounting

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LIBERTY BROADBAND CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

model by analogy, including information about the nature of the transactions, the related policy used to account for the transactions, the amounts applicable to each financial statement line item and any significant terms and conditions of the transactions, including commitments and contingencies. This guidance is effective for annual financial statements issued for periods beginning after December 15, 2021, with early adoption permitted. The Company does not expect a significant impact from the adoption of the standard but is currently evaluating the effect that the updated standard will have on its financial disclosures.

(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, 2022 and 2021 are 2 million and 1 million potential common shares, respectively, because their inclusion would have been antidilutive. Excluded from diluted EPS for both the six months ended June 30, 2022 and 2021 are 1 million potential common shares because their inclusion would have been antidilutive.


	Liberty Broadband Common Stock
	Three months	Three months	Six months	Six months
	ended	ended	ended	ended
	June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021

	(numbers of shares in millions)
Basic WASO	161	188	164	191
Potentially dilutive shares (1)	1	2	1	2
Diluted WASO	162	190	165	193

(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) Assets and Liabilities Measured at Fair Value

For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have any recurring assets or liabilities measured at fair value that would be considered Level 3.

I-12

Table of Contents

LIBERTY BROADBAND CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company’s assets and (liabilities) measured at fair value are as follows:

June 30, 2022

December 31, 2021

Quoted prices

Significant

Quoted prices

Significant

in active

other

in active

other

markets for

observable

markets for

observable

identical assets

inputs

identical assets

inputs

Description

Total

(Level 1)

(Level 2)

Total

(Level 1)

(Level 2)

amounts in millions

Cash equivalents

204

—

118

—

Indemnification obligation

175

—

175

324

—

Liberty Broadband Corporation common stock