Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.19.3.a.u2
Segment Information
12 Months Ended
Dec. 31, 2019
Segment Information  
Segment Information

(12) 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 year ended December 31, 2019, 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. 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,

 

2019

2018

2017

 

Adjusted

Adjusted

Adjusted

 

Revenue

OIBDA

Revenue

OIBDA

Revenue

OIBDA

 

amounts in thousands

 

Skyhook

    

$

14,859

    

(4,704)

    

22,256

    

3,161

    

13,092

    

(9,496)

Charter

 

45,764,000

 

16,752,000

 

43,634,000

 

15,824,000

 

41,581,000

 

14,955,000

Corporate and other

 

 

(12,187)

 

 

(6,689)

 

 

(6,920)

 

45,778,859

 

16,735,109

 

43,656,256

 

15,820,472

 

41,594,092

 

14,938,584

Eliminate equity method affiliate

 

(45,764,000)

 

(16,752,000)

 

(43,634,000)

 

(15,824,000)

 

(41,581,000)

 

(14,955,000)

Consolidated Liberty Broadband

$

14,859

 

(16,891)

 

22,256

 

(3,528)

 

13,092

 

(16,416)

Other Information

December 31, 2019

December 31, 2018

 

Total

Investments

Capital

Total

Investments

Capital

 

assets

in affiliates

expenditures

assets

in affiliates

expenditures

 

amounts in thousands

 

Skyhook

    

$

18,145

    

    

500

    

21,763

    

    

41

Charter

 

148,188,000

 

 

7,195,000

 

146,130,000

 

 

9,125,000

Corporate and other

 

12,238,197

 

12,194,674

 

 

12,076,674

 

12,004,376

 

 

160,444,342

 

12,194,674

 

7,195,500

 

158,228,437

 

12,004,376

 

9,125,041

Eliminate equity method affiliate

 

(148,188,000)

 

 

(7,195,000)

 

(146,130,000)

 

 

(9,125,000)

Consolidated Liberty Broadband

$

12,256,342

 

12,194,674

 

500

 

12,098,437

 

12,004,376

 

41

Revenue by Geographic Area

Years ended December 31,

 

2019

2018

2017

 

amounts in thousands

 

United States

    

$

12,507

    

19,946

    

10,315

Other countries

 

2,352

 

2,310

 

2,777

$

14,859

 

22,256

 

13,092

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

Years ended December 31,

 

2019

2018

2017

 

amounts in thousands

 

Consolidated segment Adjusted OIBDA

    

$

(16,891)

    

(3,528)

    

(16,416)

Stock-based compensation

 

(10,511)

 

(5,707)

 

(5,292)

Depreciation and amortization

 

(1,875)

 

(2,779)

 

(3,770)

Operating income (loss)

(29,277)

(12,014)

(25,478)

Interest expense

(25,166)

(23,302)

(19,570)

Share of earnings (loss) of affiliates, net

 

286,401

 

166,146

 

2,508,991

Gain (loss) on dilution of investment in affiliate

 

(79,329)

 

(43,575)

 

(17,872)

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

 

1,170

 

3,659

 

3,098

Other, net

 

1,359

 

963

 

1,431

Earnings (loss) before income taxes

$

155,158

 

91,877

 

2,450,600