Segment Information

9 Months Ended

Sep. 30, 2022

Segment Information

Segment Information

(10) 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 the nine months ended September 30, 2022, Liberty Broadband has identified the following consolidated company and equity method investment as its reportable segments:

● GCI Holdings – a wholly owned subsidiary of the Company that provides a full range of wireless, data, video, voice, and managed services to residential, businesses, governmental entities, and educational and medical institutions primarily in Alaska.

● 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 segment that is also a consolidated company 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, 2021. 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

Revenue by segment from contracts with customers, classified by customer type and significant service offerings follows:

	Three months ended			Nine months ended
	September 30,			September 30,
	2022		2021	2022	2021
	amounts in millions
GCI Holdings
Consumer Revenue
Wireless	$	37	34	105	98
Data		58	53	173	158
Other		13	22	41	68
Business Revenue
Wireless		12	19	36	56
Data		103	92	288	268
Other		6	7	18	21
Lease, grant, and revenue from subsidies		19	19	58	57
Total GCI Holdings		248	246	719	726
Corporate and other		—	4	6	13
Total	$	248	250	725	739

Charter revenue totaled $13,550 million and $13,146 million for the three months ended September 30, 2022 and 2021, respectively, and $40,348 million and $38,470 million for the nine months ended September 30, 2022 and 2021, respectively.

The Company had receivables of $197 million and $217 million at September 30, 2022 and December 31, 2021, respectively, the long-term portion of which are included in Other assets, net. The Company had deferred revenue of $32 million at both September 30, 2022 and December 31, 2021. The receivables and deferred revenue are only from contracts with customers, which amounts exclude receivables and deferred revenue arising from leases, grants, and subsidies. GCI Holdings’ customers generally pay for services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in the accompanying condensed consolidated statements of operations as the services are provided. Changes in the contract liability balance for the Company during the three and nine months ended September 30, 2022 were not materially impacted by other factors.

The Company expects to recognize revenue in the future related to performance obligations that are unsatisfied (or partially unsatisfied) of approximately $92 million in the remainder of 2022, $238 million in 2023, $91 million in 2024, $63 million in 2025 and $73 million in 2026 and thereafter.

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, transaction costs, 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.

Adjusted OIBDA is summarized as follows:

	Three months ended			Nine months ended
	September 30,			September 30,
	2022		2021	2022	2021
	amounts in millions
GCI Holdings	$	90	89	267	274
Charter		5,210	5,295	15,993	14,967
Corporate and other		(7)	(9)	(21)	(36)
		5,293	5,375	16,239	15,205
Eliminate equity method affiliate		(5,210)	(5,295)	(15,993)	(14,967)
Consolidated Liberty Broadband	$	83	80	246	238

Other Information

	September 30, 2022
	Total		Investments	Capital
	assets		in affiliate	expenditures
	amounts in millions
GCI Holdings	$	3,374	—	132
Charter		143,669	—	6,456
Corporate and other		11,745	11,547	—
		158,788	11,547	6,588
Eliminate equity method affiliate		(143,669)	—	(6,456)
Consolidated Liberty Broadband	$	15,119	11,547	132

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

	Three months ended			Nine months ended
	September 30,			September 30,
	2022		2021	2022	2021
		amounts in millions
Adjusted OIBDA	$	83	80	246	238
Stock-based compensation		(10)	(11)	(28)	(31)
Depreciation and amortization		(66)	(68)	(195)	(199)
Litigation settlement, net of recoveries		(19)	24	(29)	(86)
Operating income (loss)		(12)	25	(6)	(78)
Interest expense		(35)	(28)	(91)	(90)
Share of earnings (loss) of affiliate, net		309	314	998	752
Gain (loss) on dilution of investment in affiliate		—	(1)	(67)	(98)
Realized and unrealized gains (losses) on financial instruments, net		148	(27)	362	(53)
Gain (loss) on dispositions, net		—	12	179	12
Other, net		(34)	3	(73)	18
Earnings (loss) before income taxes	$	376	298	1,302	463