Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 15, 2019 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36713 | |
Entity Registrant Name | LIBERTY BROADBAND CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-1211994 | |
Entity Address, Address Line One | 12300 Liberty Boulevard | |
Entity Address, City or Town | Englewood | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112 | |
City Area Code | 720 | |
Local Phone Number | 875-5700 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001611983 | |
Amendment Flag | false | |
Series A common stock | ||
Title of 12(b) Security | Series A common stock | |
Trading Symbol | LBRDA | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 26,370,812 | |
Series B common stock | ||
Entity Common Stock, Shares Outstanding | 2,454,520 | |
Series C common stock | ||
Title of 12(b) Security | Series C common stock | |
Trading Symbol | LBRDK | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 152,715,757 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 67,134 | $ 83,103 |
Other current assets | 7,181 | 1,471 |
Total current assets | 74,315 | 84,574 |
Investment in Charter, accounted for using the equity method (note 4) | 12,023,742 | 12,004,376 |
Other assets | 9,112 | 9,487 |
Total assets | 12,107,169 | 12,098,437 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 19,429 | 3,504 |
Deferred revenue and other current liabilities | 9,952 | 4,691 |
Total current liabilities | 29,381 | 8,195 |
Debt (note 5) | 523,549 | 522,928 |
Deferred income tax liabilities | 964,584 | 965,829 |
Other liabilities | 2,595 | 2,867 |
Total liabilities | 1,520,109 | 1,499,819 |
Equity | ||
Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued | ||
Additional paid-in capital | 7,929,046 | 7,938,357 |
Accumulated other comprehensive earnings, net of taxes | 7,778 | 7,778 |
Retained earnings | 2,648,420 | 2,650,669 |
Total equity | 10,587,060 | 10,598,618 |
Commitments and contingencies (note 7) | ||
Total liabilities and equity | 12,107,169 | 12,098,437 |
Series A common stock | ||
Equity | ||
Common stock | 264 | 263 |
Series B common stock | ||
Equity | ||
Common stock | 25 | 25 |
Series C common stock | ||
Equity | ||
Common stock | $ 1,527 | $ 1,526 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 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 | 26,370,787 | 26,311,681 |
Common Stock, Shares, Outstanding | 26,370,787 | 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 | 152,715,703 | 152,591,939 |
Common Stock, Shares, Outstanding | 152,715,703 | 152,591,939 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue: | ||||
Total Revenue | $ 3,747 | $ 3,371 | $ 7,205 | $ 15,162 |
Revenue, Product and Service [Extensible List] | us-gaap:LicenseAndServiceMember | us-gaap:LicenseAndServiceMember | us-gaap:LicenseAndServiceMember | us-gaap:LicenseAndServiceMember |
Operating costs and expenses | ||||
Operating, including stock-based compensation (note 6) | $ 2,227 | $ 2,029 | $ 4,480 | $ 3,938 |
Selling, general and administrative, including stock-based compensation (note 6) | 8,217 | 5,514 | 15,155 | 12,241 |
Depreciation and amortization | 469 | 899 | 937 | 1,808 |
Total operating costs and expenses | 10,913 | 8,442 | 20,572 | 17,987 |
Operating income (loss) | (7,166) | (5,071) | (13,367) | (2,825) |
Other income (expense): | ||||
Interest expense | (6,342) | (6,035) | (12,885) | (11,072) |
Share of earnings (losses) of affiliates (note 4) | 45,400 | 32,911 | 80,249 | 42,213 |
Gain (loss) on dilution of investment in affiliate (note 4) | (16,322) | (5,205) | (57,725) | (31,962) |
Realized and unrealized gains (losses) on financial instruments, net (note 3) | (2,019) | (2,019) | ||
Other, net | 406 | 193 | 829 | 418 |
Net earnings (loss) before income taxes | 15,976 | 14,774 | (2,899) | (5,247) |
Income tax benefit (expense) | (3,924) | (4,194) | 650 | 757 |
Net earnings (loss) attributable to Liberty Broadband shareholders | $ 12,052 | $ 10,580 | $ (2,249) | $ (4,490) |
Basic net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2) | $ 0.07 | $ 0.06 | $ (0.01) | $ (0.02) |
Diluted net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share (note 2) | $ 0.07 | $ 0.06 | $ (0.01) | $ (0.02) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||||
Net earnings (loss) | $ (2,249) | $ (4,490) | ||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | $ 469 | $ 899 | 937 | 1,808 |
Stock-based compensation | 5,139 | 2,801 | ||
Share of (earnings) losses of affiliates, net | (45,400) | (32,911) | (80,249) | (42,213) |
(Gain) loss on dilution of investment in affiliate | 16,322 | 5,205 | 57,725 | 31,962 |
Realized and unrealized (gains) losses on financial instruments, net | 2,019 | 2,019 | ||
Deferred income tax expense (benefit) | (650) | (756) | ||
Other, net | 576 | 447 | ||
Changes in operating assets and liabilities: | ||||
Current and other assets | (5,764) | 335 | ||
Payables and other liabilities | 4,461 | 1,494 | ||
Net cash provided (used) by operating activities | (20,074) | (6,593) | ||
Cash flows from investing activities: | ||||
Capital expended for property and equipment | (50) | (24) | ||
Net cash provided (used) by investing activities | (50) | (24) | ||
Cash flows from financing activities: | ||||
Borrowings of debt | 25,000 | |||
Payments from issuances of financial instruments | (94,249) | |||
Proceeds from settlements of financial instruments | 46,483 | |||
Other financing activities, net | 4,155 | 588 | ||
Net cash provided (used) by financing activities | 4,155 | (22,178) | ||
Net increase (decrease) in cash | (15,969) | (28,795) | ||
Cash, cash equivalents and restricted cash, beginning of period | 83,103 | 81,257 | ||
Cash, cash equivalents and restricted cash, end of period | $ 67,134 | $ 52,462 | $ 67,134 | $ 52,462 |
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) | (4,490) | (4,490) | |||||
Other comprehensive earnings (loss) | (172) | (172) | |||||
Stock-based compensation | 2,703 | 2,703 | |||||
Issuance of common stock upon exercise of stock options | 1 | 587 | 588 | ||||
Noncontrolling interest activity at Charter | 28,928 | 28,928 | |||||
Balance at Jun. 30, 2018 | 263 | 25 | 1,526 | 7,940,118 | 8,252 | 2,571,299 | 10,521,483 |
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 | |||||||
Net earnings (loss) | 10,580 | 10,580 | |||||
Other comprehensive earnings (loss) | (172) | (172) | |||||
Stock-based compensation | 1,351 | 1,351 | |||||
Issuance of common stock upon exercise of stock options | 47 | 47 | |||||
Noncontrolling interest activity at Charter | (1,718) | (1,718) | |||||
Balance at Jun. 30, 2018 | 263 | 25 | 1,526 | 7,940,118 | 8,252 | 2,571,299 | 10,521,483 |
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) | (2,249) | (2,249) | |||||
Stock-based compensation | 5,010 | 5,010 | |||||
Issuance of common stock upon exercise of stock options | 1 | 1 | 4,153 | 4,155 | |||
Tax Sharing arrangement with former parent | (16,090) | (16,090) | |||||
Noncontrolling interest activity at Charter | (2,384) | (2,384) | |||||
Balance at Jun. 30, 2019 | 264 | 25 | 1,527 | 7,929,046 | 7,778 | 2,648,420 | 10,587,060 |
Balance at Mar. 31, 2019 | 263 | 25 | 1,526 | 7,943,795 | 7,778 | 2,636,368 | 10,589,755 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings (loss) | 12,052 | 12,052 | |||||
Stock-based compensation | 2,487 | 2,487 | |||||
Issuance of common stock upon exercise of stock options | 1 | 1 | 2,500 | 2,502 | |||
Tax Sharing arrangement with former parent | (16,090) | (16,090) | |||||
Noncontrolling interest activity at Charter | (3,646) | (3,646) | |||||
Balance at Jun. 30, 2019 | $ 264 | $ 25 | $ 1,527 | $ 7,929,046 | $ 7,778 | $ 2,648,420 | $ 10,587,060 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 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 $17.0 million and $0.9 million was reimbursable to Liberty for the three months ended June 30, 2019 and 2018, respectively, and $17.9 million and $1.8 million was reimbursable to Liberty for the six months ended June 30, 2019 and 2018, respectively. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 6 Months Ended |
Jun. 30, 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 Six months Six months ended ended ended ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (numbers of shares in thousands) Basic WASO 181,450 181,323 181,409 181,319 Potentially dilutive shares (1) 1,382 1,148 1,340 1,273 Diluted WASO 182,832 182,471 182,749 182,592 (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 | 6 Months Ended |
Jun. 30, 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: June 30, 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 $ 58,129 58,129 — 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. Realized and Unrealized Gains (Losses) on Financial Instruments Three months ended Six months ended June 30, June 30, 2019 2018 2019 2018 (amounts in thousands) Derivative instruments (1) $ — (2,019) — (2,019) $ — (2,019) — (2,019) (1) In April 2018, the Company entered into a zero-strike call option on 610,325 shares of Liberty Broadband Series C common stock and prepaid a premium of $47.8 million. Liberty Broadband exercised its option to settle the contract in cash in June 2018 for cash proceeds of $46.5 million, and recognized a realized loss on the options as of June 30, 2018. In June 2018, the Company entered into another zero-strike call option on 632,911 shares of Liberty Broadband Series C common stock. The Company recognized an unrealized loss on the options as of June 30, 2018. The Company settled all zero-strike call options during 2018 and had no outstanding zero-strike call options as of June 30, 2019. |
Investment in Charter Accounted
Investment in Charter Accounted for Using the Equity Method | 6 Months Ended |
Jun. 30, 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 June 30, 2019, the carrying value of Liberty Broadband’s ownership in Charter was approximately $12,024 million. The market value of Liberty Broadband’s ownership in Charter as of June 30, 2019 was approximately $21,368 million, which represented an approximate economic ownership of 24.4% 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 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 $3,409 million as of June 30, 2019 is allocated within memo accounts used for equity accounting purposes as follows (amounts in millions): June 30, December 31, 2019 2018 Property and equipment $ 277 328 Customer relationships 754 721 Franchise fees 1,853 1,821 Trademarks 29 29 Goodwill 1,279 1,202 Debt (74) (105) Deferred income tax liability (709) (698) $ 3,409 3,298 Property and equipment and customer relationships have remaining useful lives of approximately 5 years and 9 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 six months ended June 30, 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 $30.4 million and $29.2 million, net of related taxes, for the three months ended June 30, 2019 and 2018, respectively, and expenses of $56.0 million and $57.9 million, net of related taxes, for the six months ended June 30, 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 $16.3 million and $5.2 million during the three months ended June 30, 2019 and 2018, respectively, and a dilution loss of $57.7 million and $32.0 million during the six months ended June 30, 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 June 30, 2019 December 31, 2018 Current assets $ 3,490 2,944 Property and equipment, net 34,475 35,126 Goodwill 29,554 29,554 Intangible assets, net 75,780 76,884 Other assets 2,786 1,622 Total assets $ 146,085 146,130 Current liabilities 9,875 12,095 Deferred income taxes 17,522 17,389 Long-term debt 71,784 69,537 Other liabilities 3,810 2,837 Equity 43,094 44,272 Total liabilities and shareholders’ equity $ 146,085 146,130 Charter condensed consolidated statements of operations Three months ended Six months ended June 30, June 30, 2019 2018 2019 2018 Revenue $ 11,347 10,854 22,553 21,511 Cost and expenses: Operating costs and expenses (excluding depreciation and amortization) 7,244 6,873 14,480 13,709 Depreciation and amortization 2,500 2,592 5,050 5,302 Other operating (income) expenses, net 62 29 57 98 9,806 9,494 19,587 19,109 Operating income 1,541 1,360 2,966 2,402 Interest expense, net (945) (878) (1,870) (1,729) Other income (expense), net (126) (102) (190) (42) Income tax benefit (expense) (84) (41) (203) (69) Net income (loss) 386 339 703 562 Less: Net income attributable to noncontrolling interests (72) (66) (136) (121) Net income (loss) attributable to Charter shareholders $ 314 273 567 441 |
Debt
Debt | 6 Months Ended |
Jun. 30, 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 June 30, 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 June 30, 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 3.83% per annum at June 30, 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. 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. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 2019 and 2018 (amounts in thousands): Three months Six months ended ended June 30, June 30, 2019 2018 2019 2018 Operating expense $ 11 10 48 27 Selling, general and administrative 2,512 1,386 5,091 2,774 $ 2,523 1,396 5,139 2,801 Liberty Broadband – Grants of Stock Options During the six months ended June 30, 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 six months ended June 30, 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 (90) $ 33.21 Forfeited/cancelled — $ — Outstanding at June 30, 2019 303 $ 33.34 0.5 $ 21 Exercisable at June 30, 2019 303 $ 33.34 0.5 $ 21 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 (181) $ 33.14 Forfeited/cancelled — $ — Outstanding at June 30, 2019 2,216 $ 45.48 4.1 $ 130 Exercisable at June 30, 2019 1,415 $ 42.57 3.3 $ 87 As of June 30, 2019, the total unrecognized compensation cost related to unvested Awards was approximately $2.9 million. Such amount will be recognized in the Company's condensed consolidated statements of operations over a weighted average period of approximately one year. As of June 30, 2019, Liberty Broadband reserved 2.5 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 June 30, 2019 and December 31, 2018, $1.0 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 | 6 Months Ended |
Jun. 30, 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 70% and 72% of total revenue for the three months ended June 30, 2019 and 2018, respectively, and 72% and 67% of total revenue for the six months ended June 30, 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 | 6 Months Ended |
Jun. 30, 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, a non-GAAP measure, 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, 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 six months ended June 30, 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 included in our Annual Report on Form 10-K for the year ended December 31, 2018. 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 June 30, 2019 2018 Adjusted Adjusted Revenue OIBDA Revenue OIBDA (amounts in thousands) Skyhook $ 3,747 (876) 3,371 (1,023) Charter 11,347,000 4,123,000 10,854,000 4,022,000 Corporate and other — (3,298) — (1,753) 11,350,747 4,118,826 10,857,371 4,019,224 Eliminate equity method affiliate (11,347,000) (4,123,000) (10,854,000) (4,022,000) Consolidated Liberty Broadband $ 3,747 (4,174) 3,371 (2,776) Six months ended June 30, 2019 2018 Adjusted Adjusted Revenue OIBDA Revenue OIBDA (amounts in thousands) Skyhook $ 7,205 (2,069) 15,162 5,076 Charter 22,553,000 8,183,000 21,511,000 7,846,000 Corporate and other — (5,222) — (3,292) 22,560,205 8,175,709 21,526,162 7,847,784 Eliminate equity method affiliate (22,553,000) (8,183,000) (21,511,000) (7,846,000) Consolidated Liberty Broadband $ 7,205 (7,291) 15,162 1,784 Other Information June 30, 2019 Total Investments Capital assets in affiliates expenditures (amounts in thousands) Skyhook $ 22,765 — 50 Charter 146,085,000 — 3,262,000 Corporate and other 12,084,404 12,023,742 — 158,192,169 12,023,742 3,262,050 Eliminate equity method affiliate (146,085,000) — (3,262,000) Consolidated Liberty Broadband $ 12,107,169 12,023,742 50 The following table provides a reconciliation of consolidated segment Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes: Three months ended Six months June 30, ended June 30, 2019 2018 2019 2018 (amounts in thousands) Consolidated segment Adjusted OIBDA $ (4,174) (2,776) (7,291) 1,784 Stock-based compensation (2,523) (1,396) (5,139) (2,801) Depreciation and amortization (469) (899) (937) (1,808) Operating income (loss) (7,166) (5,071) (13,367) (2,825) Interest expense (6,342) (6,035) (12,885) (11,072) Share of earnings (loss) of affiliates, net 45,400 32,911 80,249 42,213 Gain (loss) on dilution of investment in affiliate (16,322) (5,205) (57,725) (31,962) Realized and unrealized gains (losses) on financial instruments, net — (2,019) — (2,019) Other, net 406 193 829 418 Earnings (loss) before income taxes $ 15,976 14,774 (2,899) (5,247) |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings (Loss) per Share | |
Schedule of weighted average number of shares | Liberty Broadband Common Stock Three months Three months Six months Six months ended ended ended ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 (numbers of shares in thousands) Basic WASO 181,450 181,323 181,409 181,319 Potentially dilutive shares (1) 1,382 1,148 1,340 1,273 Diluted WASO 182,832 182,471 182,749 182,592 (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) | 6 Months Ended |
Jun. 30, 2019 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | June 30, 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 $ 58,129 58,129 — 67,329 67,329 — |
Schedule of realized and unrealized gains (losses) on financial instruments | Three months ended Six months ended June 30, June 30, 2019 2018 2019 2018 (amounts in thousands) Derivative instruments (1) $ — (2,019) — (2,019) $ — (2,019) — (2,019) (1) In April 2018, the Company entered into a zero-strike call option on 610,325 shares of Liberty Broadband Series C common stock and prepaid a premium of $47.8 million. Liberty Broadband exercised its option to settle the contract in cash in June 2018 for cash proceeds of $46.5 million, and recognized a realized loss on the options as of June 30, 2018. In June 2018, the Company entered into another zero-strike call option on 632,911 shares of Liberty Broadband Series C common stock. The Company recognized an unrealized loss on the options as of June 30, 2018. The Company settled all zero-strike call options during 2018 and had no outstanding zero-strike call options as of June 30, 2019. |
Investment in Charter Account_2
Investment in Charter Accounted for Using the Equity Method (Tables) | 6 Months Ended |
Jun. 30, 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 $3,409 million as of June 30, 2019 is allocated within memo accounts used for equity accounting purposes as follows (amounts in millions): June 30, December 31, 2019 2018 Property and equipment $ 277 328 Customer relationships 754 721 Franchise fees 1,853 1,821 Trademarks 29 29 Goodwill 1,279 1,202 Debt (74) (105) Deferred income tax liability (709) (698) $ 3,409 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 June 30, 2019 December 31, 2018 Current assets $ 3,490 2,944 Property and equipment, net 34,475 35,126 Goodwill 29,554 29,554 Intangible assets, net 75,780 76,884 Other assets 2,786 1,622 Total assets $ 146,085 146,130 Current liabilities 9,875 12,095 Deferred income taxes 17,522 17,389 Long-term debt 71,784 69,537 Other liabilities 3,810 2,837 Equity 43,094 44,272 Total liabilities and shareholders’ equity $ 146,085 146,130 Charter condensed consolidated statements of operations Three months ended Six months ended June 30, June 30, 2019 2018 2019 2018 Revenue $ 11,347 10,854 22,553 21,511 Cost and expenses: Operating costs and expenses (excluding depreciation and amortization) 7,244 6,873 14,480 13,709 Depreciation and amortization 2,500 2,592 5,050 5,302 Other operating (income) expenses, net 62 29 57 98 9,806 9,494 19,587 19,109 Operating income 1,541 1,360 2,966 2,402 Interest expense, net (945) (878) (1,870) (1,729) Other income (expense), net (126) (102) (190) (42) Income tax benefit (expense) (84) (41) (203) (69) Net income (loss) 386 339 703 562 Less: Net income attributable to noncontrolling interests (72) (66) (136) (121) Net income (loss) attributable to Charter shareholders $ 314 273 567 441 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
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 and six months ended June 30, 2019 and 2018 (amounts in thousands): Three months Six months ended ended June 30, June 30, 2019 2018 2019 2018 Operating expense $ 11 10 48 27 Selling, general and administrative 2,512 1,386 5,091 2,774 $ 2,523 1,396 5,139 2,801 |
Series A common stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
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 (90) $ 33.21 Forfeited/cancelled — $ — Outstanding at June 30, 2019 303 $ 33.34 0.5 $ 21 Exercisable at June 30, 2019 303 $ 33.34 0.5 $ 21 |
Series C common stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
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 (181) $ 33.14 Forfeited/cancelled — $ — Outstanding at June 30, 2019 2,216 $ 45.48 4.1 $ 130 Exercisable at June 30, 2019 1,415 $ 42.57 3.3 $ 87 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Information | |
Schedule of performance measures | Three months ended June 30, 2019 2018 Adjusted Adjusted Revenue OIBDA Revenue OIBDA (amounts in thousands) Skyhook $ 3,747 (876) 3,371 (1,023) Charter 11,347,000 4,123,000 10,854,000 4,022,000 Corporate and other — (3,298) — (1,753) 11,350,747 4,118,826 10,857,371 4,019,224 Eliminate equity method affiliate (11,347,000) (4,123,000) (10,854,000) (4,022,000) Consolidated Liberty Broadband $ 3,747 (4,174) 3,371 (2,776) Six months ended June 30, 2019 2018 Adjusted Adjusted Revenue OIBDA Revenue OIBDA (amounts in thousands) Skyhook $ 7,205 (2,069) 15,162 5,076 Charter 22,553,000 8,183,000 21,511,000 7,846,000 Corporate and other — (5,222) — (3,292) 22,560,205 8,175,709 21,526,162 7,847,784 Eliminate equity method affiliate (22,553,000) (8,183,000) (21,511,000) (7,846,000) Consolidated Liberty Broadband $ 7,205 (7,291) 15,162 1,784 |
Schedule of segment reporting information | June 30, 2019 Total Investments Capital assets in affiliates expenditures (amounts in thousands) Skyhook $ 22,765 — 50 Charter 146,085,000 — 3,262,000 Corporate and other 12,084,404 12,023,742 — 158,192,169 12,023,742 3,262,050 Eliminate equity method affiliate (146,085,000) — (3,262,000) Consolidated Liberty Broadband $ 12,107,169 12,023,742 50 |
Schedule of reconciliation of segment Adjusted OIBDA to earnings (loss) before income taxes | Three months ended Six months June 30, ended June 30, 2019 2018 2019 2018 (amounts in thousands) Consolidated segment Adjusted OIBDA $ (4,174) (2,776) (7,291) 1,784 Stock-based compensation (2,523) (1,396) (5,139) (2,801) Depreciation and amortization (469) (899) (937) (1,808) Operating income (loss) (7,166) (5,071) (13,367) (2,825) Interest expense (6,342) (6,035) (12,885) (11,072) Share of earnings (loss) of affiliates, net 45,400 32,911 80,249 42,213 Gain (loss) on dilution of investment in affiliate (16,322) (5,205) (57,725) (31,962) Realized and unrealized gains (losses) on financial instruments, net — (2,019) — (2,019) Other, net 406 193 829 418 Earnings (loss) before income taxes $ 15,976 14,774 (2,899) (5,247) |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)product | Jun. 30, 2018USD ($) | |
Liberty | ||||
Reimbursable amount | $ | $ 17 | $ 0.9 | $ 17.9 | $ 1.8 |
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings (Loss) per Share | ||||
Basic WASO | 181,450 | 181,323 | 181,409 | 181,319 |
Potentially dilutive shares | 1,382 | 1,148 | 1,340 | 1,273 |
Diluted WASO | 182,832 | 182,471 | 182,749 | 182,592 |
Assets and Liabilities Measur_3
Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets and Liabilities Measured at Fair Value | ||
Cash equivalents | $ 58,129 | $ 67,329 |
Level 1 | ||
Assets and Liabilities Measured at Fair Value | ||
Cash equivalents | $ 58,129 | $ 67,329 |
Assets and Liabilities Measur_4
Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Apr. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2019 | |
Realized and Unrealized Gains (Losses) on Financial Instruments | |||||
Realized and unrealized gains (losses) on financial instruments, net | $ (2,019) | $ (2,019) | |||
Series C common stock | Zero-strike call option | |||||
Realized and Unrealized Gains (Losses) on Financial Instruments | |||||
Realized and unrealized gains (losses) on financial instruments, net | $ (2,019) | $ (2,019) | |||
Derivative underlying share amount | 632,911 | 610,325 | 632,911 | 632,911 | 0 |
Derivative premium paid | $ 47,800 | ||||
Derivative settlement proceeds | $ 46,500 |
Investments in Charter Accounte
Investments in Charter Accounted for Using the Equity Method (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Investments in affiliates accounted for using the Equity Method | ||
Carrying value of equity method investment | $ 12,023,742 | $ 12,004,376 |
Charter | ||
Investments in affiliates accounted for using the Equity Method | ||
Carrying value of equity method investment | 12,024,000 | |
Market value of equity method investment | $ 21,368,000 | |
Ownership percentage | 24.40% | |
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 | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Excess basis allocation within memo accounts | |||||
Loss on dilution of investment in affiliate | $ (16,322) | $ (5,205) | $ (57,725) | $ (31,962) | |
Charter | |||||
Excess basis allocation within memo accounts | |||||
Property and equipment | 277,000 | 277,000 | $ 328,000 | ||
Customer relationships | 754,000 | 754,000 | 721,000 | ||
Franchise fees | 1,853,000 | 1,853,000 | 1,821,000 | ||
Trademarks | 29,000 | 29,000 | 29,000 | ||
Goodwill | 1,279,000 | 1,279,000 | 1,202,000 | ||
Debt | (74,000) | (74,000) | (105,000) | ||
Deferred income tax liability | (709,000) | (709,000) | (698,000) | ||
Total | 3,409,000 | 3,409,000 | $ 3,298,000 | ||
Excess basis amortization of debt and intangible assets | 30,400 | 29,200 | 56,000 | 57,900 | |
Loss on dilution of investment in affiliate | $ (16,300) | $ (5,200) | $ (57,700) | $ (32,000) | |
Charter | Customer relationships | |||||
Excess basis allocation within memo accounts | |||||
Remaining useful lives of customer relationships | 9 years | ||||
Charter | Property, Plant and Equipment | |||||
Excess basis allocation within memo accounts | |||||
Remaining useful lives of property and equipment | 5 years |
Investments in Charter Accoun_3
Investments in Charter Accounted for Using the Equity Method (Details) - Charter - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Charter consolidated balance sheet | |||||
Current assets | $ 3,490 | $ 3,490 | $ 2,944 | ||
Property and equipment, net | 34,475 | 34,475 | 35,126 | ||
Goodwill | 29,554 | 29,554 | 29,554 | ||
Intangible assets, net | 75,780 | 75,780 | 76,884 | ||
Other assets | 2,786 | 2,786 | 1,622 | ||
Total assets | 146,085 | 146,085 | 146,130 | ||
Current liabilities | 9,875 | 9,875 | 12,095 | ||
Deferred income taxes | 17,522 | 17,522 | 17,389 | ||
Long-term debt | 71,784 | 71,784 | 69,537 | ||
Other liabilities | 3,810 | 3,810 | 2,837 | ||
Equity | 43,094 | 43,094 | 44,272 | ||
Total liabilities and shareholders' equity | 146,085 | 146,085 | $ 146,130 | ||
Charter consolidated statement of operations | |||||
Revenue | 11,347 | $ 10,854 | 22,553 | $ 21,511 | |
Operating costs and expenses (excluding depreciation and amortization) | 7,244 | 6,873 | 14,480 | 13,709 | |
Depreciation and amortization | 2,500 | 2,592 | 5,050 | 5,302 | |
Other operating (income) expenses, net | 62 | 29 | 57 | 98 | |
Total operating costs and expenses | 9,806 | 9,494 | 19,587 | 19,109 | |
Operating income | 1,541 | 1,360 | 2,966 | 2,402 | |
Interest expense, net | (945) | (878) | (1,870) | (1,729) | |
Other income (expense), net | (126) | (102) | (190) | (42) | |
Income tax benefit (expense) | (84) | (41) | (203) | (69) | |
Net income (loss) | 386 | 339 | 703 | 562 | |
Less: Net income attributable to noncontrolling interests | (72) | (66) | (136) | (121) | |
Net income (loss) attributable to Charter shareholders | $ 314 | $ 273 | $ 567 | $ 441 |
Debt (Details)
Debt (Details) - Amended 2017 Margin Loan Agreement $ in Thousands | Aug. 24, 2018USD ($) | Mar. 21, 2016loan | Oct. 30, 2014loan | Jun. 30, 2019USD ($)shares | Dec. 31, 2018USD ($) |
Charter | |||||
Debt disclosures | |||||
Number of common shares pledged as collateral | shares | 6,800,000 | ||||
Value of pledged collateral | $ 2,700,000 | ||||
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 | 3.83% | ||||
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock Based Compensation | ||||
Stock-based compensation | $ 2,523 | $ 1,396 | $ 5,139 | $ 2,801 |
Operating expense | ||||
Stock Based Compensation | ||||
Stock-based compensation | 11 | 10 | 48 | 27 |
Selling, general and administrative | ||||
Stock Based Compensation | ||||
Stock-based compensation | $ 2,512 | $ 1,386 | $ 5,091 | $ 2,774 |
Stock-Based Compensation - Gran
Stock-Based Compensation - Grants of Stock Options (Details) - CEO - Series C common stock shares in Thousands | 6 Months Ended |
Jun. 30, 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 | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
2014 Plan | Options | ||
Fair value assumptions | ||
Dividend rate | 0.00% | |
Options | ||
Unrecognized compensation cost options | $ 2.9 | |
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) | (90,000) | |
Outstanding ending balance (in shares) | 303,000 | |
Number of awards exercisable (in shares) | 303,000 | |
WAEP Outstanding beginning balance (in dollars per share) | $ 33.31 | |
WAEP options exercised (in dollars per share) | 33.21 | |
WAEP Outstanding ending balance (in dollars per share) | 33.34 | |
WAEP options exercisable (in dollars per share) | $ 33.34 | |
Weighted average remaining contractual life outstanding | 6 months | |
Weighted average remaining contractual life exercisable | 6 months | |
Aggregate intrinsic value outstanding | $ 21 | |
Aggregate intrinsic value exercisable | $ 21 | |
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) | (181,000) | |
Outstanding ending balance (in shares) | 2,216,000 | |
Number of awards exercisable (in shares) | 1,415,000 | |
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) | 33.14 | |
WAEP Outstanding ending balance (in dollars per share) | 45.48 | |
WAEP options exercisable (in dollars per share) | $ 42.57 | |
Weighted average remaining contractual life outstanding | 4 years 1 month 6 days | |
Weighted average remaining contractual life exercisable | 3 years 3 months 18 days | |
Aggregate intrinsic value outstanding | $ 130 | |
Aggregate intrinsic value exercisable | $ 87 | |
2014 Plan | Options | Common Stock Class A and C | ||
Options | ||
Common Stock, Capital Shares Reserved for Future Issuance | 2,500,000 | |
Skyhook | LTIPs | PARs and PSUs | Other liabilities | Level 2 | ||
Options | ||
Deferred compensation | $ 1 | $ 1.1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | Customer concentration | ||||
Certain Risks and Concentrations | ||||
Concentration Risk, Percentage | 70.00% | 72.00% | 72.00% | 67.00% |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Segment information | |||||
Total Revenue | $ 3,747 | $ 3,371 | $ 7,205 | $ 15,162 | |
Adjusted OIBDA | (4,174) | (2,776) | (7,291) | 1,784 | |
Total assets | 12,107,169 | 12,107,169 | $ 12,098,437 | ||
Investments in affiliates | 12,023,742 | 12,023,742 | $ 12,004,376 | ||
Capital expenditures | $ 50 | ||||
Charter | |||||
Segment information | |||||
Financial results included in the disclosure (as a percent) | 100.00% | ||||
Operating segments | Skyhook | |||||
Segment information | |||||
Total Revenue | 3,747 | 3,371 | $ 7,205 | 15,162 | |
Adjusted OIBDA | (876) | (1,023) | (2,069) | 5,076 | |
Total assets | 22,765 | 22,765 | |||
Capital expenditures | 50 | ||||
Operating segments | Charter | |||||
Segment information | |||||
Total Revenue | 11,347,000 | 10,854,000 | 22,553,000 | 21,511,000 | |
Adjusted OIBDA | 4,123,000 | 4,022,000 | 8,183,000 | 7,846,000 | |
Total assets | 146,085,000 | 146,085,000 | |||
Capital expenditures | 3,262,000 | ||||
Corporate and other | |||||
Segment information | |||||
Adjusted OIBDA | (3,298) | (1,753) | (5,222) | (3,292) | |
Total assets | 12,084,404 | 12,084,404 | |||
Investments in affiliates | 12,023,742 | 12,023,742 | |||
Operating Segments and Corporate and Other | |||||
Segment information | |||||
Total Revenue | 11,350,747 | 10,857,371 | 22,560,205 | 21,526,162 | |
Adjusted OIBDA | 4,118,826 | 4,019,224 | 8,175,709 | 7,847,784 | |
Total assets | 158,192,169 | 158,192,169 | |||
Investments in affiliates | 12,023,742 | 12,023,742 | |||
Capital expenditures | 3,262,050 | ||||
Eliminate equity method affiliate | |||||
Segment information | |||||
Total Revenue | (11,347,000) | (10,854,000) | (22,553,000) | (21,511,000) | |
Adjusted OIBDA | (4,123,000) | $ (4,022,000) | (8,183,000) | $ (7,846,000) | |
Total assets | $ (146,085,000) | (146,085,000) | |||
Capital expenditures | $ (3,262,000) |
Segment Information (Details)_2
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reconciliation of consolidated segment Adjusted OIBDA to earnings (loss) before income taxes | ||||
Consolidated segment Adjusted OIBDA | $ (4,174) | $ (2,776) | $ (7,291) | $ 1,784 |
Stock-based compensation | (2,523) | (1,396) | (5,139) | (2,801) |
Depreciation and amortization | (469) | (899) | (937) | (1,808) |
Operating income (loss) | (7,166) | (5,071) | (13,367) | (2,825) |
Interest expense | (6,342) | (6,035) | (12,885) | (11,072) |
Share of earnings (loss) of affiliates, net | 45,400 | 32,911 | 80,249 | 42,213 |
Gain (loss) on dilution of investment in affiliate | (16,322) | (5,205) | (57,725) | (31,962) |
Realized and unrealized gains (losses) on financial instruments, net | (2,019) | (2,019) | ||
Other, net | 406 | 193 | 829 | 418 |
Net earnings (loss) before income taxes | $ 15,976 | $ 14,774 | $ (2,899) | $ (5,247) |