Liberty Broadband (LBRDK) 10-Q 2 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 15, 2019
Entity Registrant Name	Liberty Broadband Corp
Entity Central Index Key	0001611983
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Series A common stock
Entity Common Stock, Shares Outstanding		26,339,950
Series B common stock
Entity Common Stock, Shares Outstanding		2,454,520
Series C common stock
Entity Common Stock, Shares Outstanding		152,636,809

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 73,178	$ 83,103
Other current assets	1,121	1,471
Total current assets	74,299	84,574
Investment in Charter, accounted for using the equity method (note 4)	11,999,494	12,004,376
Other assets	9,585	9,487
Total assets	12,083,378	12,098,437
Current liabilities:
Accounts payable and accrued liabilities	2,922	3,504
Deferred revenue and other current liabilities	2,902	4,691
Total current liabilities	5,824	8,195
Debt (note 5)	523,238	522,928
Deferred income tax liabilities	961,665	965,829
Other liabilities	2,896	2,867
Total liabilities	1,493,623	1,499,819
Equity
Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued
Additional paid-in capital	7,943,795	7,938,357
Accumulated other comprehensive earnings, net of taxes	7,778	7,778
Retained earnings	2,636,368	2,650,669
Total equity	10,589,755	10,598,618
Commitments and contingencies (note 7)
Total liabilities and equity	12,083,378	12,098,437
Series A common stock
Equity
Common stock	263	263
Series B common stock
Equity
Common stock	25	25
Series C common stock
Equity
Common stock	$ 1,526	$ 1,526

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock shares authorized	50,000,000	50,000,000
Preferred shares issued	0	0
Series A common stock
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	500,000,000	500,000,000
Common Stock, Shares, Issued	26,338,807	26,311,681
Common Stock, Shares, Outstanding	26,338,807	26,311,681
Series B common stock
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	18,750,000	18,750,000
Common Stock, Shares, Issued	2,454,520	2,454,520
Common Stock, Shares, Outstanding	2,454,520	2,454,520
Series C common stock
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	500,000,000	500,000,000
Common Stock, Shares, Issued	152,636,809	152,591,939
Common Stock, Shares, Outstanding	152,636,809	152,591,939

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue:
Total Revenue	$ 3,458	$ 11,791
Type of Revenue [Extensible List]	us-gaap:LicenseAndServiceMember	us-gaap:LicenseAndServiceMember
Operating costs and expenses
Operating, including stock-based compensation (note 6)	$ 2,253	$ 1,909
Selling, general and administrative, including stock-based compensation (note 6)	6,938	6,727
Depreciation and amortization	468	909
Total operating costs and expenses	9,659	9,545
Operating income (loss)	(6,201)	2,246
Other income (expense):
Interest expense	(6,543)	(5,037)
Dividend and interest income	418	225
Share of earnings (losses) of affiliates (note 4)	34,849	9,302
Gain (loss) on dilution of investment in affiliate (note 4)	(41,403)	(26,757)
Other, net	5
Net earnings (loss) before income taxes	(18,875)	(20,021)
Income tax benefit (expense)	4,574	4,951
Net earnings (loss) attributable to Liberty Broadband shareholders	$ (14,301)	$ (15,070)
Basic net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2)	$ (0.08)	$ (0.08)
Diluted net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2)	$ (0.08)	$ (0.08)

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net earnings (loss)	$ (14,301)	$ (15,070)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization	468	909
Stock-based compensation	2,616	1,405
Share of (earnings) losses of affiliates, net	(34,849)	(9,302)
(Gain) loss on dilution of investment in affiliate	41,403	26,757
Deferred income tax expense (benefit)	(4,574)	(4,950)
Other, net	302	394
Changes in operating assets and liabilities:
Current and other assets	349	1,282
Payables and other liabilities	(2,975)	(5,121)
Net cash provided (used) by operating activities	(11,561)	(3,696)
Cash flows from investing activities:
Capital expended for property and equipment	(17)	(14)
Net cash provided (used) by investing activities	(17)	(14)
Cash flows from financing activities:
Other financing activities, net	1,653	541
Net cash provided (used) by financing activities	1,653	541
Net increase (decrease) in cash	(9,925)	(3,169)
Cash, cash equivalents and restricted cash, beginning of period	83,103	81,257
Cash, cash equivalents and restricted cash, end of period	$ 73,178	$ 78,088

Condensed Consolidated Statem_3

Condensed Consolidated Statement of Equity - USD ($) $ in Thousands	Series A common stockCommon stock	Series B common stockCommon stock	Series C common stockCommon stock	Additional Paid In Capital	Accumulated other comprehensive earnings	Retained earnings	Total
Balance at Dec. 31, 2017	$ 262	$ 25	$ 1,526	$ 7,907,900	$ 8,424	$ 2,568,764	$ 10,486,901
Increase (Decrease) in Stockholders' Equity
Net earnings (loss)						(15,070)	(15,070)
Stock-based compensation				1,352			1,352
Issuance of common stock upon exercise of stock options	1			540			541
Noncontrolling interest activity at Charter				30,646			30,646
Balance at Mar. 31, 2018	263	25	1,526	7,940,438	8,424	2,560,719	10,511,395
Increase (Decrease) in Stockholders' Equity
Cumulative effect of accounting change | ASU 2014-09						1,223	1,223
Cumulative effect of accounting change						5,802	5,802
Balance at Dec. 31, 2018	263	25	1,526	7,938,357	7,778	2,650,669	10,598,618
Increase (Decrease) in Stockholders' Equity
Net earnings (loss)						(14,301)	(14,301)
Stock-based compensation				2,523			2,523
Issuance of common stock upon exercise of stock options				1,653			1,653
Noncontrolling interest activity at Charter				1,262			1,262
Balance at Mar. 31, 2019	$ 263	$ 25	$ 1,526	$ 7,943,795	$ 7,778	$ 2,636,368	$ 10,589,755

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Basis of Presentation
Basis of Presentation	(1) Basis of Presentation During May 2014, the board of directors of Liberty Media Corporation and its subsidiaries (“Liberty”) authorized management to pursue a plan to spin-off to its stockholders common stock of a wholly-owned subsidiary, Liberty Broadband Corporation (“Liberty Broadband” or the “Company”), and to distribute subscription rights to acquire shares of Liberty Broadband’s common stock (the “Broadband Spin-Off”). These financial statements refer to Liberty Broadband Corporation as “Liberty Broadband,” “the Company,” “us,” “we” and “our” in the notes to the condensed consolidated financial statements. Through a number of prior years’ transactions, Liberty Broadband has acquired an interest in Charter Communications, Inc. (“Charter”). Pursuant to proxy agreements with GCI Liberty, Inc. (“GCI Liberty”) and Advance/Newhouse Partnership (“A/N”), Liberty Broadband controls 25.01% of the aggregate voting power of Charter. The Company’s wholly owned subsidiary, Skyhook Holding, Inc. (“Skyhook”), focuses on the development and sale of Skyhook’s device-based location technology. Skyhook markets and sells two primary products: (1) a location determination service called the Precision Location Solution; and (2) a location intelligence and data insights service called Geospatial Insights. The accompanying (a) condensed consolidated balance sheet as of December 31, 2018, which has been derived from audited financial statements, and (b) interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Liberty Broadband's Annual Report on Form 10-K for the year ended December 31, 2018. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers the application of the equity method of accounting for investments in affiliates and accounting for income taxes to be its most significant estimates . Liberty Broadband holds an investment in Charter that is accounted for using the equity method. Liberty Broadband does not control the decision making process or business management practices of this affiliate. Accordingly, Liberty Broadband relies on the management of this affiliate to provide it with accurate financial information prepared in accordance with GAAP that the Company uses in the application of the equity method. In addition, Liberty Broadband relies on audit reports that are provided by the affiliate's independent auditor on the financial statements of such affiliate. The Company is not aware, however, of any errors in or possible misstatements of the financial information provided by its equity affiliate that would have a material effect on Liberty Broadband's condensed consolidated financial statements. Spin-Off Arrangements Following the Broadband Spin-Off, Liberty and Liberty Broadband operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the Broadband Spin-Off, Liberty (for accounting purposes a related party of the Company) and Liberty Broadband entered into certain agreements in order to govern certain of the ongoing relationships between the two companies after the Broadband Spin-Off and to provide for an orderly transition. These agreements include a reorganization agreement, a services agreement, a facilities sharing agreement and a tax sharing agreement. The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Broadband Spin-Off, certain conditions to the Broadband Spin-Off and provisions governing the relationship between Liberty Broadband and Liberty with respect to and resulting from the Broadband Spin-Off. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and Liberty Broadband and other agreements related to tax matters. Pursuant to the tax sharing agreement, Liberty Broadband has agreed to indemnify Liberty, subject to certain limited exceptions, for losses and taxes resulting from the Broadband Spin-Off to the extent such losses or taxes result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by Liberty Broadband (applicable to actions or failures to act by Liberty Broadband and its subsidiaries following the completion of the Broadband Spin-Off). Pursuant to the services agreement, Liberty provides Liberty Broadband with general and administrative services including legal, tax, accounting, treasury and investor relations support. Under the facilities sharing agreement, Liberty Broadband shares office space with Liberty and related amenities at Liberty’s corporate headquarters. Liberty Broadband will reimburse Liberty for direct, out-of-pocket expenses incurred by Liberty in providing these services which will be negotiated semi-annually. Under these various agreements, approximately $924 thousand and $950 thousand was reimbursable to Liberty for the three months ended March 31, 2019 and 2018, respectively.

Earnings (loss) per Share

Earnings (loss) per Share	3 Months Ended
	Mar. 31, 2019
Earnings (loss) per Share
Earnings (loss) per Share	(2) Earnings (Loss) per Share Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) attributable to Liberty Broadband shareholders by the weighted average number of common shares outstanding (“WASO”) for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. The basic and diluted EPS calculations are based on the following weighted average number of shares of outstanding common stock. Liberty Broadband Common Stock Three months Three months ended ended March 31, 2019 March 31, 2018 (numbers of shares in thousands) Basic WASO 181,366 181,316 Potentially dilutive shares (1) 1,299 1,398 Diluted WASO 182,665 182,714 (1) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive.

Assets and Liabilities Measured

Assets and Liabilities Measured at Fair Value	3 Months Ended
	Mar. 31, 2019
Assets and Liabilities Measured at Fair Value
Assets and Liabilities Measured at Fair Value	(3) Assets and Liabilities Measured at Fair Value For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have any recurring assets or liabilities measured at fair value that would be considered Level 3. The Company’s assets and (liabilities) measured at fair value are as follows: March 31, 2019 December 31, 2018 Quoted prices Significant Quoted prices Significant in active other in active other markets for observable markets for observable identical assets inputs identical assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) (amounts in thousands) Cash equivalents $ 63,735 63,735 — 67,329 67,329 — Other Financial Instruments Other financial instruments not measured at fair value on a recurring basis include trade receivables, trade payables, accrued and other current liabilities, current portion of debt and long-term debt. With the exception of long-term debt, the carrying amount approximates fair value due to the short maturity of these instruments as reported on our condensed consolidated balance sheets. The carrying value of our long-term debt bears interest at a variable rate and therefore is also considered to approximate fair value.

Investment in Charter Accounted

Investment in Charter Accounted for Using the Equity Method	3 Months Ended
	Mar. 31, 2019
Investment in Charter Accounted for Using the Equity Method
Investment in Charter Accounted for Using the Equity Method	(4) Investment in Charter Accounted for Using the Equity Method Through a number of prior years’ transactions, Liberty Broadband has acquired an interest in Charter. The investment in Charter is accounted for as an equity method affiliate based on our ownership interest and the board seats held by individuals appointed by Liberty Broadband. As of March 31, 2019, the carrying value of Liberty Broadband’s ownership in Charter was approximately $11,999 million. The market value of Liberty Broadband’s ownership in Charter as of March 31, 2019 was approximately $18,758 million, which represented an approximate economic ownership of 24.2% of the outstanding equity of Charter as of that date. Pursuant to proxy agreements with GCI Liberty and A/N (the “GCI Liberty Proxy” and “A/N Proxy”, respectively), Liberty Broadband has an irrevocable proxy to vote certain shares of Charter common stock owned beneficially or of record by GCI Liberty and A/N, for a five year term expiring May 18, 2021, subject to extension upon the mutual agreement of both parties, subject to certain limitations. As a result of the A/N Proxy and the GCI Liberty Proxy, Liberty Broadband controls 25.01% of the aggregate voting power of Charter and is Charter’s largest stockholder. Additionally, so long as the A/N Proxy is in effect, if A/N proposes to transfer common units of Charter Communications Holdings, LLC (which units are exchangeable into Charter shares and which will, under certain circumstances, result in the conversion of certain shares of Class B Common Stock into Charter shares) or Charter shares, in each case, constituting either (i) shares representing the first 7.0% of the outstanding voting power of Charter held by A/N or (ii) shares representing the last 7.0% of the outstanding voting power of New Charter held by A/N, Liberty Broadband will have a right of first refusal (“ROFR”) to purchase all or a portion of any such securities A/N proposes to transfer. The purchase price per share for any securities sold to Liberty Broadband pursuant to the ROFR will be the volume-weighted average price of Charter shares for the two trading day period before the notice of a proposed sale by A/N, payable in cash. Certain transfers are permitted to affiliates of A/N, subject to the transferee entity entering into an agreement assuming the transferor’s obligations under the A/N Proxy. Investment in Charter The excess basis in our investment in Charter of $3,351 million as of March 31, 2019 is allocated within memo accounts used for equity accounting purposes as follows (amounts in millions): March 31, December 31, 2019 2018 Property and equipment $ 302 328 Customer relationships 736 721 Franchise fees 1,836 1,821 Trademarks 29 29 Goodwill 1,238 1,202 Debt (87) (105) Deferred income tax liability (703) (698) $ 3,351 3,298 Property and equipment and customer relationships have remaining useful lives of 7 years and 11 years, respectively, and franchise fees, trademarks and goodwill have indefinite lives. The excess basis of outstanding debt is amortized over the contractual period using the straight-line method. The increase in excess basis for the three months ended March 31, 2019, was primarily due to Charter’s share buyback program. The Company’s share of earnings (losses) of affiliates line item in the accompanying condensed consolidated statements of operations includes expenses of $25.6 million and $28.7 million, net of related taxes, for the three months ended March 31, 2019 and 2018, respectively, due to the amortization of the excess basis related to assets with identifiable useful lives and debt. The Company had a dilution loss of $41.4 million and $26.8 million during the three months ended March 31, 2019 and 2018, respectively. The dilution losses for the periods presented were attributable to stock option exercises by employees and other third parties at prices below Liberty Broadband’s book basis per share. Summarized unaudited financial information for Charter is as follows (amounts in millions): Charter condensed consolidated balance sheets March 31, 2019 December 31, 2018 Current assets $ 3,926 2,944 Property and equipment, net 34,859 35,126 Goodwill 29,554 29,554 Intangible assets, net 76,316 76,884 Other assets 2,602 1,622 Total assets $ 147,257 146,130 Current liabilities 11,950 12,095 Deferred income taxes 17,473 17,389 Long-term debt 70,567 69,537 Other liabilities 3,624 2,837 Equity 43,643 44,272 Total liabilities and shareholders’ equity $ 147,257 146,130 Charter condensed consolidated statements of operations Three months ended March 31, 2019 2018 Revenue $ 11,206 10,657 Cost and expenses: Operating costs and expenses (excluding depreciation and amortization) 7,236 6,836 Depreciation and amortization 2,550 2,710 Other operating (income) expenses, net (5) 69 9,781 9,615 Operating income 1,425 1,042 Interest expense, net (925) (851) Other income (expense), net (64) 60 Income tax benefit (expense) (119) (28) Net income (loss) 317 223 Less: Net income attributable to noncontrolling interests (64) (55) Net income (loss) attributable to Charter shareholders $ 253 168

Debt

Debt	3 Months Ended
	Mar. 31, 2019
Debt
Debt	(5) Debt Amended 2017 Margin Loan Facility On August 24, 2018, a bankruptcy remote wholly owned subsidiary of the Company (“SPV”), entered into Amendment No. 1 to its multi-draw margin loan credit facility (the “Amended 2017 Margin Loan Facility” and, the credit agreement governing such facility, the “Amended 2017 Margin Loan Agreement”) with Wilmington Trust, National Association as the successor administrative agent, BNP Paribas, Dublin Branch, as the successor calculation agent, and the lenders thereunder. SPV is permitted, subject to certain funding conditions, to borrow term loans up to an aggregate principal amount equal to $1.0 billion. SPV will also have the ability from time to time to request additional loans in an aggregate principal amount of up to $1.0 billion on an uncommitted basis subject to certain conditions. SPV had borrowed $525 million as of March 31, 2019 and December 31, 2018. SPV had $475 million available to be drawn until August 27, 2019. The maturity date of the loans under the Amended 2017 Margin Loan Agreement is August 24, 2020 (except for any incremental loans incurred thereunder to the extent SPV and the incremental lenders agree to a later maturity date). Accordingly, the debt is classified as noncurrent as of March 31, 2019. Borrowings under the Amended 2017 Margin Loan Agreement bear interest at the three-month LIBOR rate plus a per annum spread of 1.5%. Borrowings outstanding under this margin loan bore interest at a rate of 4.10% per annum at March 31, 2019. Interest is payable quarterly in arrears beginning on September 29, 2017. SPV used available cash and a portion of the proceeds of the loans under the Amended 2017 Margin Loan Facility to repay the two margin loan agreements entered into by a wholly-owned special purpose subsidiary of the Company on October 30, 2014 and two margin loan agreements entered into by another wholly-owned special purpose subsidiary of the Company on March 21, 2016. Borrowings may also be used for distribution as a dividend or a return of capital, for the purchase of margin stock and for general corporate purposes. The Amended 2017 Margin Loan Agreement contains various affirmative and negative covenants that restrict the activities of the SPV (and, in some cases, the Company and its subsidiaries with respect to shares of Charter owned by the Company and its subsidiaries). The Amended 2017 Margin Loan Agreement does not include any financial covenants. The Amended 2017 Margin Loan Agreement also contains restrictions related to additional indebtedness and events of default customary for margin loans of this type. SPV’s obligations under the Amended 2017 Margin Loan Agreement are secured by first priority liens on a portion of the Company’s ownership interest in Charter, sufficient for SPV to meet the loan to value requirements under the Amended 2017 Margin Loan Agreement. The Amended 2017 Margin Loan Agreement indicates that no lender party shall have any voting rights with respect to the shares transferred, except to the extent that a lender party buys any shares in a sale or other disposition made pursuant to the terms of the loan agreements. As of March 31, 2019, 6.8 million shares of Charter with a value of $2.3 billion were pledged as collateral pursuant to the Amended 2017 Margin Loan Agreement.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2019
Stock-Based Compensation
Stock-Based Compensation	(6) Stock-Based Compensation Liberty Broadband grants, to certain of its directors, employees and employees of its subsidiaries, restricted stock and stock options to purchase shares of its common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Included in the accompanying condensed consolidated statements of operations are the following amounts of stock-based compensation for the three months ended March 31, 2019 and 2018 (amounts in thousands): Three months ended March 31, 2019 2018 Operating expense $ 37 17 Selling, general and administrative 2,579 1,388 $ 2,616 1,405 Liberty Broadband – Grants of Stock Options During the three months ended March 31, 2019, Liberty Broadband granted 41 thousand options to purchase shares of Series C Liberty Broadband common stock and 25 thousand performance-based restricted stock units (“RSUs”) of Series C Liberty Broadband common stock to our CEO. Such options had a GDFV of $25.46 per share. The RSUs had a GDFV of $88.99 per share at the time they were granted. The options vest on December 31, 2019, and the RSUs cliff vest in one year, subject to satisfaction of certain performance objectives. Performance objectives, which are subjective, are considered in determining the timing and amount of the compensation expense recognized. When the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The probability of satisfying the performance objectives is assessed at the end of each reporting period. There were no options to purchase shares of Series A or Series B common stock granted during the three months ended March 31, 2019. The Company calculates the GDFV for all of its equity classified awards and any subsequent remeasurement of its liability classified awards using the Black-Scholes Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of Liberty Broadband common stock and the implied volatility of publicly traded Liberty Broadband options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options. Liberty Broadband – Outstanding Awards The following tables present the number and weighted average exercise price (“WAEP”) of Awards to purchase Liberty Broadband common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the Awards. Weighted average remaining Aggregate contractual intrinsic Series A WAEP life value (in thousands) (in years) (in millions) Outstanding at January 1, 2019 393 $ 33.31 Granted — $ — Exercised (42) $ 33.05 Forfeited/cancelled — $ — Outstanding at March 31, 2019 351 $ 33.35 0.8 $ 20 Exercisable at March 31, 2019 350 $ 33.30 0.8 $ 20 Weighted average remaining Aggregate contractual intrinsic Series C WAEP life value (in thousands) (in years) (in millions) Outstanding at January 1, 2019 2,356 $ 43.77 Granted 41 $ 88.99 Exercised (62) $ 32.95 Forfeited/cancelled — $ — Outstanding at March 31, 2019 2,335 $ 44.86 4.2 $ 109 Exercisable at March 31, 2019 1,533 $ 41.83 3.3 $ 76 As of March 31, 2019 , the total unrecognized compensation cost related to unvested Awards was approximately $4.4 million . Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately 1.0 year. As of March 31, 2019, Liberty Broadband reserved 2.7 million shares of Series A and Series C common stock for issuance under exercise privileges of outstanding stock Awards. Skyhook Equity Incentive Plans Long-Term Incentive Plans Skyhook has a long-term incentive plan which provides for the granting of phantom stock appreciation rights (“PARs”) and phantom stock units (“PSUs”) to employees, directors, and consultants of Skyhook that is not significant to Liberty Broadband. As of March 31, 2019 and December 31, 2018, $1.2 million and $1.1 million, respectively, are included in other liabilities for the fair value (Level 2) of the Company’s long-term incentive plan obligations.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies
Commitments and Contingencies	(7) Commitments and Contingencies General Litigation In the ordinary course of business, the Company and its consolidated subsidiary are parties to legal proceedings and claims involving alleged infringement of third-party intellectual property rights, defamation, and other claims. Although it is reasonably possible that the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements. Certain Risks and Concentrations The Skyhook business is subject to certain risks and concentrations including dependence on relationships with its customers. The Company’s largest customers, that accounted for greater than 10% of revenue, aggregated 73% and 72% of total revenue for the three months ended March 31, 2019 and 2018, respectively. Off-Balance Sheet Arrangements Liberty Broadband did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures or capital resources.

Segment Information

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)

Earnings (Loss) per Share (Tabl

Earnings (Loss) per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Summary of Significant Accounting Policies
Schedule of weighted average number of shares	Liberty Broadband Common Stock Three months Three months ended ended March 31, 2019 March 31, 2018 (numbers of shares in thousands) Basic WASO 181,366 181,316 Potentially dilutive shares (1) 1,299 1,398 Diluted WASO 182,665 182,714 (1) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive.

Assets and Liabilities Measur_2

Assets and Liabilities Measured at Fair Value (Tables)	3 Months Ended
	Mar. 31, 2019
Assets and Liabilities Measured at Fair Value
Schedule of assets and liabilities measured at fair value	March 31, 2019 December 31, 2018 Quoted prices Significant Quoted prices Significant in active other in active other markets for observable markets for observable identical assets inputs identical assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) (amounts in thousands) Cash equivalents $ 63,735 63,735 — 67,329 67,329 —

Investment in Charter Account_2

Investment in Charter Accounted for Using the Equity Method (Tables)	3 Months Ended
	Mar. 31, 2019
Investment in Charter Accounted for Using the Equity Method
Schedule of allocation of excess basis within memo accounts used for equity accounting purposes	The excess basis in our investment in Charter of $3,351 million as of March 31, 2019 is allocated within memo accounts used for equity accounting purposes as follows (amounts in millions): March 31, December 31, 2019 2018 Property and equipment $ 302 328 Customer relationships 736 721 Franchise fees 1,836 1,821 Trademarks 29 29 Goodwill 1,238 1,202 Debt (87) (105) Deferred income tax liability (703) (698) $ 3,351 3,298
Summary of financial information for Charter	Summarized unaudited financial information for Charter is as follows (amounts in millions): Charter condensed consolidated balance sheets March 31, 2019 December 31, 2018 Current assets $ 3,926 2,944 Property and equipment, net 34,859 35,126 Goodwill 29,554 29,554 Intangible assets, net 76,316 76,884 Other assets 2,602 1,622 Total assets $ 147,257 146,130 Current liabilities 11,950 12,095 Deferred income taxes 17,473 17,389 Long-term debt 70,567 69,537 Other liabilities 3,624 2,837 Equity 43,643 44,272 Total liabilities and shareholders’ equity $ 147,257 146,130 Charter condensed consolidated statements of operations Three months ended March 31, 2019 2018 Revenue $ 11,206 10,657 Cost and expenses: Operating costs and expenses (excluding depreciation and amortization) 7,236 6,836 Depreciation and amortization 2,550 2,710 Other operating (income) expenses, net (5) 69 9,781 9,615 Operating income 1,425 1,042 Interest expense, net (925) (851) Other income (expense), net (64) 60 Income tax benefit (expense) (119) (28) Net income (loss) 317 223 Less: Net income attributable to noncontrolling interests (64) (55) Net income (loss) attributable to Charter shareholders $ 253 168

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2019
Schedule of stock-based compensation expense	Included in the accompanying condensed consolidated statements of operations are the following amounts of stock-based compensation for the three months ended March 31, 2019 and 2018 (amounts in thousands): Three months ended March 31, 2019 2018 Operating expense $ 37 17 Selling, general and administrative 2,579 1,388 $ 2,616 1,405
Series A common stock
Schedule of stock awards activity	Weighted average remaining Aggregate contractual intrinsic Series A WAEP life value (in thousands) (in years) (in millions) Outstanding at January 1, 2019 393 $ 33.31 Granted — $ — Exercised (42) $ 33.05 Forfeited/cancelled — $ — Outstanding at March 31, 2019 351 $ 33.35 0.8 $ 20 Exercisable at March 31, 2019 350 $ 33.30 0.8 $ 20
Series C common stock
Schedule of stock awards activity	Weighted average remaining Aggregate contractual intrinsic Series C WAEP life value (in thousands) (in years) (in millions) Outstanding at January 1, 2019 2,356 $ 43.77 Granted 41 $ 88.99 Exercised (62) $ 32.95 Forfeited/cancelled — $ — Outstanding at March 31, 2019 2,335 $ 44.86 4.2 $ 109 Exercisable at March 31, 2019 1,533 $ 41.83 3.3 $ 76

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2019
Segment Information
Schedule of 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
Schedule of segment reporting 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
Schedule of reconciliation of segment Adjusted OIBDA to 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)

Basis of Presentation (Details)

Basis of Presentation (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)product	Mar. 31, 2018USD ($)
Liberty
Related Party Transaction, Amounts of Transaction | $	$ 924	$ 950
Skyhook
Number Of Primary Products | product	2
Charter
Investment control percentage	25.01%

Earnings (loss) per Share (Deta

Earnings (loss) per Share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings (loss) per Share
Basic WASO	181,366	181,316
Potentially dilutive shares	1,299	1,398
Diluted WASO	182,665	182,714

Assets and Liabilities Measur_3

Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets and Liabilities Measured at Fair Value
Cash equivalents	$ 63,735	$ 67,329
Level 1
Assets and Liabilities Measured at Fair Value
Cash equivalents	$ 63,735	$ 67,329

Investments in Charter Accounte

Investments in Charter Accounted for Using the Equity Method (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Investments in affiliates accounted for using the Equity Method
Carrying value of equity method investment	$ 11,999,494	$ 12,004,376
Charter
Investments in affiliates accounted for using the Equity Method
Carrying value of equity method investment	11,999,000
Market value of equity method investment	$ 18,758,000
Ownership percentage	24.20%
Investment control percentage	25.01%
A/N | Charter
Investments in affiliates accounted for using the Equity Method
Proxy agreement term	5 years
Trading days before proposed sale of A/N	2 days
first | A/N | Charter
Investments in affiliates accounted for using the Equity Method
Maximum percentage of New Charter shares that may be voted by proxy	7.00%
last | A/N | Charter
Investments in affiliates accounted for using the Equity Method
Maximum percentage of New Charter shares that may be voted by proxy	7.00%

Investments in Charter Accoun_2

Investments in Charter Accounted for Using the Equity Method (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Excess basis allocation within memo accounts
Loss on dilution of investment in affiliate	$ (41,403)	$ (26,757)
Charter
Excess basis allocation within memo accounts
Property and equipment	302,000		$ 328,000
Customer relationships	736,000		721,000
Franchise fees	1,836,000		1,821,000
Trademarks	29,000		29,000
Goodwill	1,238,000		1,202,000
Debt	(87,000)		(105,000)
Deferred income tax liability	(703,000)		(698,000)
Total	3,351,000		$ 3,298,000
Excess basis amortization of debt and intangible assets	25,600	28,700
Loss on dilution of investment in affiliate	$ (41,400)	$ (26,800)
Charter | Customer relationships
Excess basis allocation within memo accounts
Remaining useful lives of customer relationships	11 years
Charter | Property, Plant and Equipment
Excess basis allocation within memo accounts
Remaining useful lives of property and equipment	7 years

Investments in Charter Accoun_3

Investments in Charter Accounted for Using the Equity Method (Details) - Charter - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Charter consolidated balance sheet
Current assets	$ 3,926		$ 2,944
Property and equipment, net	34,859		35,126
Goodwill	29,554		29,554
Intangible assets, net	76,316		76,884
Other assets	2,602		1,622
Total assets	147,257		146,130
Current liabilities	11,950		12,095
Deferred income taxes	17,473		17,389
Long-term debt	70,567		69,537
Other liabilities	3,624		2,837
Equity	43,643		44,272
Total liabilities and shareholders' equity	147,257		$ 146,130
Charter consolidated statement of operations
Revenue	11,206	$ 10,657
Operating costs and expenses (excluding depreciation and amortization)	7,236	6,836
Depreciation and amortization	2,550	2,710
Other operating (income) expenses, net	(5)	69
Total operating costs and expenses	9,781	9,615
Operating income	1,425	1,042
Interest expense, net	(925)	(851)
Other income (expense), net	(64)	60
Income tax benefit (expense)	(119)	(28)
Net income (loss)	317	223
Less: Net income attributable to noncontrolling interests	(64)	(55)
Net income (loss) attributable to Charter shareholders	$ 253	$ 168

Debt (Details)

Debt (Details) - Amended 2017 Margin Loan Agreement $ in Thousands	Aug. 24, 2018USD ($)	Mar. 21, 2016loan	Oct. 30, 2014loan	Mar. 31, 2019USD ($)shares	Dec. 31, 2018USD ($)
Charter
Debt disclosures
Number of common shares pledged as collateral | shares				6,800,000
Value of pledged collateral				$ 2,300,000
SPV
Debt disclosures
Number of debt agreements repaid | loan		2	2
Maximum borrowing capacity	$ 1,000,000
Additional allowed borrowing capacity	$ 1,000,000
Remaining borrowing capacity				$ 475,000
Debt Instrument, Interest Rate, Effective Percentage				4.10%
Amount outstanding				$ 525,000	$ 525,000
SPV | Three-month LIBOR
Debt disclosures
Interest rate basis	three-month LIBOR
Basis spread on variable rate	1.50%

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock Based Compensation
Stock-based compensation	$ 2,616	$ 1,405
Operating expense
Stock Based Compensation
Stock-based compensation	37	17
Selling, general and administrative
Stock Based Compensation
Stock-based compensation	$ 2,579	$ 1,388

Stock-Based Compensation - Gran

Stock-Based Compensation - Grants of Stock Options (Details) - CEO - Series C common stock shares in Thousands	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Options
Stock Based Compensation
Options granted (in shares) | shares	41
Grant date fair value | $ / shares	$ 25.46
RSU
Stock Based Compensation
Granted (in shares) | shares	25
Grant date fair value | $ / shares	$ 88.99
Vesting period	1 year

Stock-Based Compensation - Outs

Stock-Based Compensation - Outstanding Awards (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
2014 Plan | Options
Fair value assumptions
Dividend rate	0.00%
Options
Unrecognized compensation cost options	$ 4.4
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year
2014 Plan | Options | Series A common stock
Options
Outstanding beginning balance (in shares)	393,000
Options granted (in shares)	0
Exercised (in shares)	(42,000)
Outstanding ending balance (in shares)	351,000
Number of awards exercisable (in shares)	350,000
WAEP Outstanding beginning balance (in dollars per share)	$ 33.31
WAEP options exercised (in dollars per share)	33.05
WAEP Outstanding ending balance (in dollars per share)	33.35
WAEP options exercisable (in dollars per share)	$ 33.30
Weighted average remaining contractual life outstanding	9 months 18 days
Weighted average remaining contractual life exercisable	9 months 18 days
Aggregate intrinsic value outstanding	$ 20
Aggregate intrinsic value exercisable	$ 20
2014 Plan | Options | Series B common stock
Options
Options granted (in shares)	0
2014 Plan | Options | Series C common stock
Options
Outstanding beginning balance (in shares)	2,356,000
Options granted (in shares)	41,000
Exercised (in shares)	(62,000)
Outstanding ending balance (in shares)	2,335,000
Number of awards exercisable (in shares)	1,533,000
WAEP Outstanding beginning balance (in dollars per share)	$ 43.77
WAEP Options granted (in dollars per share)	88.99
WAEP options exercised (in dollars per share)	32.95
WAEP Outstanding ending balance (in dollars per share)	44.86
WAEP options exercisable (in dollars per share)	$ 41.83
Weighted average remaining contractual life outstanding	4 years 2 months 12 days
Weighted average remaining contractual life exercisable	3 years 3 months 18 days
Aggregate intrinsic value outstanding	$ 109
Aggregate intrinsic value exercisable	$ 76
2014 Plan | Options | Common Stock Class A and C
Options
Common Stock, Capital Shares Reserved for Future Issuance	2,700,000
Skyhook | LTIPs | PARs and PSUs | Other liabilities | Level 2
Options
Deferred compensation	$ 1.2	$ 1.1

Commitments and Contingencies (

Commitments and Contingencies (Details)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue | Customer concentration
Certain Risks and Concentrations
Concentration Risk, Percentage	73.00%	72.00%

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Segment information
Total Revenue	$ 3,458	$ 11,791
Adjusted OIBDA	(3,117)	4,560
Total assets	12,083,378		$ 12,098,437
Investments in affiliates	11,999,494		$ 12,004,376
Capital expenditures	$ 17
Charter
Segment information
Financial results included in the disclosure (as a percent)	100.00%
Operating segments | Skyhook
Segment information
Total Revenue	$ 3,458	11,791
Adjusted OIBDA	(1,193)	6,099
Total assets	18,037
Capital expenditures	17
Operating segments | Charter
Segment information
Total Revenue	11,206,000	10,657,000
Adjusted OIBDA	4,060,000	3,824,000
Total assets	147,257,000
Capital expenditures	1,665,000
Corporate and other
Segment information
Adjusted OIBDA	(1,924)	(1,539)
Total assets	12,065,341
Investments in affiliates	11,999,494
Operating Segments and Corporate and Other
Segment information
Total Revenue	11,209,458	10,668,791
Adjusted OIBDA	4,056,883	3,828,560
Total assets	159,340,378
Investments in affiliates	11,999,494
Capital expenditures	1,665,017
Eliminate equity method affiliate
Segment information
Total Revenue	(11,206,000)	(10,657,000)
Adjusted OIBDA	(4,060,000)	$ (3,824,000)
Total assets	(147,257,000)
Capital expenditures	$ (1,665,000)

Segment Information (Details)_2

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reconciliation of segment Adjusted OIBDA to earnings (loss) before income taxes
Combined 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 (losses) of affiliates (note 4)	34,849	9,302
Gain (loss) on dilution of investment in affiliate	(41,403)	(26,757)
Other, net	5
Net earnings (loss) before income taxes	$ (18,875)	$ (20,021)