Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.20.2
Segment Information
9 Months Ended
Sep. 30, 2020
Segment Information  
Segment Information

(8) 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). 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, 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 nine months ended September 30, 2020, 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 the Precision Location Solution (a location determination service) and Geospatial Insights product (a location intelligence and data insights 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 included in our Annual Report on Form 10-K for the year ended December 31, 2019. 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 tables below and subsequently eliminated in order to reconcile the account totals to the Liberty Broadband condensed consolidated financial statements.

Performance Measures

Three months ended September 30,

 

2020

2019

 

Adjusted

Adjusted

 

Revenue

OIBDA

Revenue

OIBDA

 

(amounts in thousands)

 

Skyhook

    

$

4,219

    

(662)

    

3,713

    

(1,105)

Charter

 

12,039,000

4,625,000

11,450,000

4,072,000

Corporate and other

 

(13,608)

(3,481)

 

12,043,219

4,610,730

11,453,713

4,067,414

Eliminate equity method affiliate

 

(12,039,000)

(4,625,000)

(11,450,000)

(4,072,000)

Consolidated Liberty Broadband

$

4,219

(14,270)

3,713

(4,586)

Nine months ended September 30,

 

2020

2019

 

Adjusted

Adjusted

 

Revenue

OIBDA

Revenue

OIBDA

 

(amounts in thousands)

 

Skyhook

    

$

12,437

    

(2,429)

    

10,918

    

(3,174)

Charter

 

35,473,000

 

13,501,000

 

34,003,000

 

12,255,000

Corporate and other

 

 

(24,229)

 

 

(8,703)

 

35,485,437

 

13,474,342

 

34,013,918

 

12,243,123

Eliminate equity method affiliate

 

(35,473,000)

 

(13,501,000)

 

(34,003,000)

 

(12,255,000)

Consolidated Liberty Broadband

$

12,437

 

(26,658)

 

10,918

 

(11,877)

Other Information

September 30, 2020

 

Total

Investments

Capital

 

assets

in affiliates

expenditures

 

(amounts in thousands)

 

Skyhook

    

$

16,071

    

    

42

Charter

 

144,193,000

 

 

5,352,000

Corporate and other

 

12,845,618

 

12,450,425

 

 

157,054,689

 

12,450,425

 

5,352,042

Eliminate equity method affiliate

 

(144,193,000)

 

 

(5,352,000)

Consolidated Liberty Broadband

$

12,861,689

 

12,450,425

 

42

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

Three months ended

Nine months

 

September 30,

ended September 30,

 

2020

2019

2020

    

2019

 

(amounts in thousands)

 

Adjusted OIBDA

    

$

(14,270)

    

(4,586)

    

(26,658)

    

(11,877)

Stock-based compensation

 

(2,002)

(2,531)

(5,736)

 

(7,670)

Depreciation and amortization

 

(56)

(471)

(1,041)

 

(1,408)

Operating income (loss)

(16,328)

(7,588)

(33,435)

(20,955)

Interest expense

(3,719)

(6,123)

(14,711)

 

(19,008)

Share of earnings (loss) of affiliates, net

 

188,586

61,633

408,396

 

141,882

Gain (loss) on dilution of investment in affiliate

 

(35,284)

(11,219)

(140,610)

 

(68,944)

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

 

(39,324)

(433)

(39,324)

 

(433)

Other, net

 

8

350

199

 

1,179

Earnings (loss) before income taxes

$

93,939

36,620

180,515

 

33,721