Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.8.0.1
Segment Information
12 Months Ended
Dec. 31, 2017
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, 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, 2017, 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. 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,

 

 

 

2017

 

2016

 

2015

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in thousands

 

Skyhook

    

$

13,092

    

(9,496)

    

30,586

    

(2,681)

    

91,182

    

43,600

 

Charter

 

 

41,581,000

 

14,955,000

 

29,003,000

 

9,607,000

 

9,754,000

 

3,317,000

 

Corporate and other

 

 

 —

 

(6,920)

 

 

(8,761)

 

 

(11,958)

 

 

 

 

41,594,092

 

14,938,584

 

29,033,586

 

9,595,558

 

9,845,182

 

3,348,642

 

Eliminate equity method affiliate

 

 

(41,581,000)

 

(14,955,000)

 

(29,003,000)

 

(9,607,000)

 

(9,754,000)

 

(3,317,000)

 

Consolidated Liberty Broadband

 

$

13,092

 

(16,416)

 

30,586

 

(11,442)

 

91,182

 

31,642

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

December 31, 2016

 

 

 

Total

 

Investments

 

Capital

 

Total

 

Investments

 

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in thousands

 

Skyhook

    

$

24,481

    

 —

    

70

    

30,463

    

 —

    

267

 

Charter

 

 

146,623,000

 

 —

 

8,681,000

 

149,067,000

 

 —

 

5,325,000

 

Corporate and other

 

 

11,907,308

 

11,835,613

 

 —

 

9,560,497

 

9,315,253

 

 —

 

 

 

 

158,554,789

 

11,835,613

 

8,681,070

 

158,657,960

 

9,315,253

 

5,325,267

 

Eliminate equity method affiliate

 

 

(146,623,000)

 

 —

 

(8,681,000)

 

(149,067,000)

 

 —

 

(5,325,000)

 

Consolidated Liberty Broadband

 

$

11,931,789

 

11,835,613

 

70

 

9,590,960

 

9,315,253

 

267

 

 

Revenue by Geographic Area

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

 

2017

 

2016

 

2015

 

 

 

amounts in thousands

 

United States

    

$

10,315

    

27,806

    

87,739

 

Other countries

 

 

2,777

 

2,780

 

3,443

 

 

 

$

13,092

 

30,586

 

91,182

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

 

2017

 

2016

 

2015

 

 

 

amounts in thousands

 

Consolidated segment Adjusted OIBDA

    

$

(16,416)

    

(11,442)

    

31,642

 

Stock-based compensation

 

 

(5,292)

 

(5,713)

 

(6,380)

 

Depreciation and amortization

 

 

(3,770)

 

(4,005)

 

(6,088)

 

Gain on legal settlement

 

 

 —

 

 —

 

60,450

 

Impairment of intangible assets

 

 

 —

 

 —

 

(20,669)

 

Operating income (loss)

 

 

(25,478)

 

(21,160)

 

58,955

 

Interest expense

 

 

(19,570)

 

(14,956)

 

(7,424)

 

Dividend and interest income

 

 

1,449

 

5,020

 

3,797

 

Share of earnings (loss) of affiliates, net

 

 

2,508,991

 

641,544

 

(120,962)

 

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

 

 

3,098

 

94,122

 

2,619

 

Gain (loss) on dilution of investment in affiliate

 

 

(17,872)

 

770,766

 

(7,198)

 

Other, net

 

 

(18)

 

336

 

158

 

Earnings (loss) from continuing operations before income taxes

 

$

2,450,600

 

1,475,672

 

(70,055)