Annual report pursuant to Section 13 and 15(d)

Segment Information

v2.4.1.9
Segment Information
 12 Months Ended
Dec. 31, 2014
Segment Information  
Segment Information

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

Liberty Broadband defines Adjusted OIBDA as revenue less cost of sales, 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, including each business’s ability to service debt and fund capital expenditures. 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, 2014, Liberty Broadband has identified the following consolidated company and equity method investment as its reportable segments:

·

TruePosition—a wholly-owned subsidiary of the Company that develops and markets technology for locating wireless phones and other wireless devices on a cellular network, enabling wireless carriers and government agencies to provide public safety E-9-1-1 services domestically and services in support of national security and law enforcement worldwide. In addition, through its recent acquisition Skyhook, operates a global location network providing hybrid wireless positioning technology and contextual location intelligence solutions worldwide. 

·

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. For periods in which Liberty Broadband owned Charter shares and warrants, 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,

 

 

 

2014

 

2013

 

2012

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in thousands

 

TruePosition

    

$
69,045 

    
(2,152)

    
77,363 

    
5,290 

    
83,098 

    
11,335 

 

Charter (a)

 

 
9,108,000 

 
3,128,000 

 
8,155,000 

 
2,811,000 

 

—

 

—

 

Corporate and other

 

 

 —

 
(1,559)

 

—

 

—

 

—

 

—

 

 

 

 
9,177,045 

 
3,124,289 

 
8,232,363 

 
2,816,290 

 
83,098 

 
11,335 

 

Eliminate equity method affiliate

 

 
(9,108,000)

 
(3,128,000)

 
(8,155,000)

 
(2,811,000)

 

—

 

—

 

Consolidated Liberty Broadband

 

$
69,045 

 
(3,711)

 
77,363 

 
5,290 

 
83,098 

 
11,335 

 

(a)

The amounts herein represent Charter’s results for the full year ended December 31, 2014 and 2013. However, the portion of Charter’s share of earnings (losses) included in the consolidated financial statements of Liberty Broadband only includes Charter’s results from the time of acquisition (May 2013) through December 31, 2014.

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

December 31, 2013

 

 

 

Total

 

Investments

 

Capital

 

Total

 

Investments

 

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in thousands

 

TruePosition

    

$
87,393 

    

 —

    
1,398 

    
77,166 

    

 —

    
1,127 

 

Charter

 

 
24,550,000 

 

 —

 
2,221,000 

 
17,295,000 

 

 —

 
1,825,000 

 

Corporate and other

 

 
2,916,539 

 
2,498,804 

 

 —

 
2,832,213 

 
2,402,024 

 

 —

 

 

 

 
27,553,932 

 
2,498,804 

 
2,222,398 

 
20,204,379 

 
2,402,024 

 
1,826,127 

 

Eliminate equity method affiliate

 

 
(24,550,000)

 

 —

 
(2,221,000)

 
(17,295,000)

 

 —

 
(1,825,000)

 

Consolidated Liberty Broadband

 

$
3,003,932 

 
2,498,804 

 
1,398 

 
2,909,379 

 
2,402,024 

 
1,127 

 

 

Revenue by Geographic Area

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

 

2014

 

2013

 

2012

 

 

 

amounts in thousands

 

United States

    

$
66,045 

    
68,179 

    
80,802 

 

Other countries

 

 
3,000 

 
9,184 

 
2,296 

 

 

 

$
69,045 

 
77,363 

 
83,098 

 

 

Long-lived Assets by Geographic Area

 

 

 

 

 

 

 

 

 

December 31,

 

 

 

2014

 

2013

 

 

 

amounts in thousands

 

United States

    

$
3,570 

    
4,611 

 

Other countries

 

 
20 

 
49 

 

 

 

$
3,590 

 
4,660 

 

 

The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

 

2014

 

2013

 

2012

 

 

 

amounts in thousands

 

Consolidated segment Adjusted OIBDA

    

$
(3,711)

    
5,290 

    
11,335 

 

Stock-based compensation

 

 
(999)

 
(996)

 
2,383 

 

Depreciation and amortization

 

 
(9,043)

 
(4,382)

 
(5,839)

 

Gain on legal settlement

 

 
6,000 

 

 —

 

 —

 

Impairment of long-lived assets

 

 
(35,221)

 

 —

 

 —

 

Interest expense

 

 
(1,138)

 

 —

 

 —

 

Dividend and interest income

 

 
5,426 

 
6,878 

 
5,415 

 

Share of earnings (loss) of affiliates, net

 

 
(127,573)

 
(76,090)

 

 —

 

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

 

 
51,189 

 
97,860 

 
57,582 

 

Gain (loss) on dilution of investment in affiliate

 

 
(87,158)

 
(92,933)

 

 —

 

Other, net

 

 
(63)

 
(53)

 
(117)

 

Earnings (loss) from continuing operations before income taxes

 

$
(202,291)

 
(64,426)

 
70,759