Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.19.1
Segment Information
3 Months Ended
Mar. 31, 2019
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.

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, 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 three months ended March 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 condensed consolidated financial statements.

Performance Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  March 31,

 

 

 

2019

 

2018

 

 

 

 

 

 

Adjusted

 

 

 

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

 

(amounts in thousands)

 

Skyhook

    

$

3,458

    

(1,193)

    

11,791

    

6,099

 

Charter

 

 

11,206,000

 

4,060,000

 

10,657,000

 

3,824,000

 

Corporate and other

 

 

 —

 

(1,924)

 

 —

 

(1,539)

 

 

 

 

11,209,458

 

4,056,883

 

10,668,791

 

3,828,560

 

Eliminate equity method affiliate

 

 

(11,206,000)

 

(4,060,000)

 

(10,657,000)

 

(3,824,000)

 

Consolidated Liberty Broadband

 

$

3,458

 

(3,117)

 

11,791

 

4,560

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

 

 

Total

 

Investments

 

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

(amounts in thousands)

 

Skyhook

    

$

18,037

    

    

17

 

Charter

 

 

147,257,000

 

 

1,665,000

 

Corporate and other

 

 

12,065,341

 

11,999,494

 

 

 

 

 

159,340,378

 

11,999,494

 

1,665,017

 

Eliminate equity method affiliate

 

 

(147,257,000)

 

 —

 

(1,665,000)

 

Consolidated Liberty Broadband

 

$

12,083,378

 

11,999,494

 

17

 

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

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2019

 

2018

 

 

 

 

(amounts in thousands)

 

Consolidated segment Adjusted OIBDA

    

$

(3,117)

    

4,560

 

Stock-based compensation

 

 

(2,616)

 

(1,405)

 

Depreciation and amortization

 

 

(468)

 

(909)

 

Operating income (loss)

 

 

(6,201)

 

2,246

 

Interest expense

 

 

(6,543)

 

(5,037)

 

Dividend and interest income

 

 

418

 

225

 

Share of earnings (loss) of affiliates, net

 

 

34,849

 

9,302

 

Gain (loss) on dilution of investment in affiliate

 

 

(41,403)

 

(26,757)

 

Other, net

 

 

 5

 

 —

 

Earnings (loss) before income taxes

 

$

(18,875)

 

(20,021)