Investment in LendingTree
The Company has various investments accounted for using the equity method. The following table includes the Company’s carrying amount and percentage ownership of the more significant investments in affiliates at September 30, 2019 and the carrying amount at December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
|
Percentage
ownership
|
|
Market
value
|
|
Carrying
amount
|
|
Carrying
amount
|
|
|
|
dollars in thousands
|
LendingTree (a)
|
26.6
|
%
|
|
$
|
1,069,118
|
|
|
$
|
166,819
|
|
|
174,002
|
|
Other
|
various
|
|
|
NA
|
|
|
2,020
|
|
|
3,028
|
|
|
|
|
|
|
$
|
168,839
|
|
|
177,030
|
|
|
|
|
|
|
|
|
|
(a) Both the Company's ownership interest in LendingTree and the Company's share of LendingTree's earnings (losses) are reported on a three month lag. The market value disclosed is as of September 30, 2019.
|
The Company’s share of LendingTree’s earnings (losses) was $2.0 million and $10.2 million for the three months ended September 30, 2019 and 2018, respectively. The Company's share of LendingTree's earnings (losses) was $(1.4) million and $15.5 million for the nine months ended September 30, 2019 and 2018, respectively.
Investment in Liberty Broadband
On May 18, 2016, Qurate Retail completed a $2.4 billion investment in Liberty Broadband Series C non-voting shares (for accounting purposes a related party of the Company) in connection with the merger of Charter and Time Warner Cable Inc. ("TWC"). The proceeds of this investment were used by Liberty Broadband to fund, in part, its acquisition of $5 billion of stock in the new public parent company, Charter, of the combined enterprises. Qurate Retail, along with third party investors, all of whom invested on the same terms as Qurate Retail, purchased newly issued shares of Liberty Broadband Series C common stock at a per share price of $56.23, which was determined based upon the fair value of Liberty Broadband’s net assets on a sum‑of‑the parts basis at the time the investment agreements were executed (May 2015). Qurate Retail, as part of the merger described above, exchanged, in a tax‑free transaction, its shares of TWC common stock for shares of Charter Class A common stock, on a one‑for‑one basis, and Qurate Retail granted to Liberty Broadband a proxy and a right of first refusal with respect to the shares of Charter Class A common stock held by Qurate Retail following the exchange, which proxy and right of first refusal was assigned to GCI Liberty in connection with the completion of the Transactions.
As of September 30, 2019, the Company has a 23.5% economic ownership interest in Liberty Broadband. Due to overlapping boards of directors and management, the Company has been deemed to have significant influence over Liberty Broadband for accounting purposes, even though the Company does not have any voting rights. The Company has elected to apply the fair value option for its investment in Liberty Broadband (Level 1) as it is believed that investors value this
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
investment based on the trading price of Liberty Broadband. The Company recognizes changes in the fair value of its investment in Liberty Broadband in realized and unrealized gains (losses) on financial instruments, net in the accompanying condensed consolidated statements of operations. Summarized financial information for Liberty Broadband is as follows:
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2019
|
|
2018
|
|
|
amounts in thousands
|
Current assets
|
|
$
|
94,951
|
|
|
84,574
|
|
Investment in Charter, accounted for using the equity method
|
|
12,067,329
|
|
|
12,004,376
|
|
Other assets
|
|
9,767
|
|
|
9,487
|
|
Total assets
|
|
12,172,047
|
|
|
12,098,437
|
|
Long-term debt
|
|
572,619
|
|
|
522,928
|
|
Deferred income tax liabilities
|
|
972,005
|
|
|
965,829
|
|
Other liabilities
|
|
15,251
|
|
|
11,062
|
|
Equity
|
|
10,612,172
|
|
|
10,598,618
|
|
Total liabilities and shareholders' equity
|
|
$
|
12,172,047
|
|
|
12,098,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
amounts in thousands
|
Revenue
|
|
$
|
3,713
|
|
|
3,518
|
|
|
10,918
|
|
|
18,680
|
|
Operating expenses, net
|
|
(11,301
|
)
|
|
(7,614
|
)
|
|
(31,873
|
)
|
|
(25,601
|
)
|
Operating income (loss)
|
|
(7,588
|
)
|
|
(4,096
|
)
|
|
(20,955
|
)
|
|
(6,921
|
)
|
Share of earnings (losses) of affiliates
|
|
61,633
|
|
|
84,739
|
|
|
141,882
|
|
|
126,952
|
|
Gain (loss) on dilution of investment in affiliate
|
|
(11,219
|
)
|
|
(3,203
|
)
|
|
(68,944
|
)
|
|
(35,165
|
)
|
Realized and unrealized gains (losses) on financial instruments, net
|
|
(433
|
)
|
|
5,678
|
|
|
(433
|
)
|
|
3,659
|
|
Other income (expense), net
|
|
(5,773
|
)
|
|
(5,717
|
)
|
|
(17,829
|
)
|
|
(16,371
|
)
|
Income tax benefit (expense)
|
|
(9,124
|
)
|
|
(17,762
|
)
|
|
(8,474
|
)
|
|
(17,005
|
)
|
Net earnings (loss)
|
|
$
|
27,496
|
|
|
59,639
|
|
|
25,247
|
|
|
55,149
|
|
(7) Intangible Assets
Intangible Assets Subject to Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
|
Gross
|
|
|
|
Net
|
|
Gross
|
|
|
|
Net
|
|
carrying
|
|
Accumulated
|
|
carrying
|
|
carrying
|
|
Accumulated
|
|
carrying
|
|
amount
|
|
amortization
|
|
amount
|
|
amount
|
|
amortization
|
|
amount
|
|
amounts in thousands
|
Customer relationships
|
$
|
408,267
|
|
|
(85,229
|
)
|
|
323,038
|
|
|
408,267
|
|
|
(55,417
|
)
|
|
352,850
|
|
Other amortizable intangibles
|
131,830
|
|
|
(55,825
|
)
|
|
76,005
|
|
|
122,759
|
|
|
(39,603
|
)
|
|
83,156
|
|
Total
|
$
|
540,097
|
|
|
(141,054
|
)
|
|
399,043
|
|
|
531,026
|
|
|
(95,020
|
)
|
|
436,006
|
|
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Amortization expense for intangible assets with finite useful lives was $15.2 million and $17.1 million for the three months ended September 30, 2019 and 2018, respectively. Amortization expense for intangible assets with finite useful lives was $46.5 million and $38.7 million for the nine months ended September 30, 2019 and 2018, respectively. Amortization expense for amortizable intangible assets for each of the five succeeding fiscal years is estimated to be (amounts in thousands):
|
|
|
|
|
Remainder of 2019
|
$
|
15,448
|
|
2020
|
$
|
52,633
|
|
2021
|
$
|
42,250
|
|
2022
|
$
|
36,496
|
|
2023
|
$
|
33,603
|
|
(8) Debt
Debt is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
|
|
|
|
|
principal
|
|
Carrying value
|
|
|
September 30,
|
|
September 30,
|
|
December 31,
|
|
|
2019
|
|
2019
|
|
2018
|
|
|
amounts in thousands
|
Margin Loan Facility
|
|
$
|
900,000
|
|
|
900,000
|
|
|
900,000
|
|
Exchangeable senior debentures
|
|
477,250
|
|
|
579,291
|
|
|
462,336
|
|
Senior notes
|
|
775,000
|
|
|
796,985
|
|
|
803,287
|
|
Senior credit facility
|
|
713,280
|
|
|
713,280
|
|
|
715,124
|
|
Wells Fargo note payable
|
|
7,197
|
|
|
7,197
|
|
|
7,554
|
|
Deferred financing costs
|
|
—
|
|
|
(6,370
|
)
|
|
(2,267
|
)
|
Total debt
|
|
$
|
2,872,727
|
|
|
2,990,383
|
|
|
2,886,034
|
|
Debt classified as current (included in other current liabilities)
|
|
|
|
(902,368
|
)
|
|
(900,759
|
)
|
Total long-term debt
|
|
|
|
$
|
2,088,015
|
|
|
1,985,275
|
|
Margin Loan
On December 29, 2017, Broadband Holdco, LLC ("Broadband Holdco"), a wholly owned subsidiary of, at such time, Qurate Retail, and now the Company, entered into a margin loan agreement with various lender parties consisting of a term loan in an aggregate principal amount of $1 billion (the “Margin Loan”). 42,681,842 shares of Liberty Broadband Series C common stock with a value of $4.5 billion were pledged by Broadband Holdco, LLC as collateral for the loan as of September 30, 2019. This Margin Loan has a term of two years with an interest rate of LIBOR plus 1.85% and contains an undrawn commitment fee of up to 0.75% per annum. Deferred financing costs incurred on the Margin Loan are reflected in current portion of debt, net in the accompanying condensed consolidated balance sheet. In connection with the completion of the Transactions, Broadband Holdco borrowed the full principal amount of the Margin Loan. A portion of the proceeds of the Margin Loan was used to make a distribution to Qurate Retail of $1.1 billion to be used within one year for the repurchase of QVC Group stock (now the Qurate Retail common stock) or to pay down certain debt at Qurate Retail, and for the payment of fees and other costs and expenses, in each case, pursuant to the terms of the reorganization agreement. The distributed loan proceeds constituted a portion of the cash reattributed to the QVC Group.
On October 5, 2018 (the “Closing Date”), Broadband Holdco entered into Amendment No. 1 (the “Amendment”) to the Margin Loan (the “Margin Loan Agreement”). Pursuant to the Amendment, lenders under the Margin Loan have agreed to, among other things, provide commitments (the “Revolving Commitments”) for a new revolving credit facility in an aggregate principal amount of up to $200.0 million (the “Revolving Credit Facility” and, the loans thereunder, the “Revolving Loans”). The Revolving Credit Facility established under the Margin Loan Agreement is in addition to the existing term loan credit facility under the Margin Loan Agreement (the “Term Loan Facility” and, together with Revolving Credit Facility, the “Margin Loan Facility” and the loans thereunder, the “Loans”). After giving effect to the initial borrowing of Revolving Loans and Term
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Loan Prepayment (as defined below) on the Closing Date, $800.0 million of loans under the Term Loan Facility were outstanding and $200.0 million of Revolving Loans were outstanding. Subsequent to the Closing Date, the Company repaid $100.0 million of the Revolving Credit Facility. The Amendment also amends certain covenants in the Margin Loan to permit, among other things, a designated GCI Liberty subsidiary to enter into a subordinated revolving note with GCI Liberty and certain additional investments.
Broadband Holdco is permitted to use the proceeds of the Revolving Loans for any purpose not prohibited under the Margin Loan, including, without limitation, (i) to make dividends and distributions, (ii) for the purchase of margin stock, (iii) to make investments not prohibited under the Margin Loan, (iv) to repay an intercompany loan to GCI Liberty, and/or (v) otherwise for general corporate purposes, including, without limitation, for payment of interest and fees and other costs and expenses. On the Closing Date, Broadband Holdco drew down on the full amount of the commitments under the Revolving Credit Facility and applied all of the proceeds to prepay, on the Closing Date, a portion of the loans outstanding under the Term Loan Facility (the “Term Loan Prepayment”).
The Loans will mature on December 29, 2019 (the “maturity date”) and accrue interest at a rate equal to the 3-month LIBOR rate plus a per annum spread of 1.85%, subject to certain conditions and exceptions. Undrawn Revolving Commitments shall be available to Broadband Holdco from the Closing Date to but excluding the earlier of (i) the date that is one month prior to the maturity date and (ii) the date of the termination of such Revolving Commitments pursuant to the terms of the Margin Loan. The obligations under the Revolving Credit Facility, together with the obligations under Term Loan Facility, are secured by first priority liens on the shares of Liberty Broadband owned by Broadband Holdco and certain other cash collateral provided by Broadband Holdco. In addition, the Revolving Credit Facility and the Term Loan Facility are subject to the same affirmative and negative covenants and events of default.
Exchangeable Senior Debentures
On June 18, 2018, GCI Liberty issued 1.75% exchangeable senior debentures due 2046 ("Exchangeable Senior Debentures"). Upon an exchange of debentures, GCI Liberty, at its option, may deliver Charter Class A common stock, cash or a combination of Charter Class A common stock and cash. Initially, 2.6989 shares of Charter Class A common stock are attributable to each $1,000 principal amount of debentures, representing an initial exchange price of approximately $370.52 for each share of Charter Class A common stock. A total of 1,288,051 shares of Charter Class A common stock are attributable to the debentures. Interest is payable quarterly on March 31, June 30, September 30 and December 31 of each year. The debentures may be redeemed by GCI Liberty, in whole or in part, on or after October 5, 2023. Holders of debentures also have the right to require GCI Liberty to purchase their debentures on October 5, 2023. The redemption and purchase price will generally equal 100% of the adjusted principal amount of the debentures plus accrued and unpaid interest.
Senior Notes
On June 6, 2019, GCI, LLC issued $325 million of 6.625% Senior Notes due 2024 at par ("2024 Notes"). The 2024 Notes are unsecured and the net proceeds were used to fund the redemption of $325 million aggregate outstanding principal amount of 6.75% Senior Notes due 2021. Interest on the 2024 Notes and the 6.875% Senior Notes due 2025, which were issued by GCI, Inc., which is now GCI, LLC (collectively, the “Senior Notes”), is payable semi-annually in arrears. The Senior Notes are redeemable at the Company's option, in whole or in part, at a redemption price defined in the respective indentures, and accrued and unpaid interest (if any) to the date of redemption. The Senior Notes are stated net of an aggregate unamortized premium of $22.0 million at September 30, 2019. Such premium is being amortized to interest expense in the accompanying condensed consolidated statements of operations. As of September 30, 2019, GCI, LLC exceeded the maximum leverage threshold, as measured by the terms of its Senior Notes. Accordingly, the Company, can only access additional funding under the revolving portion of the Senior Credit Facility (as defined below) so long as we are in compliance with the Senior Credit Facility covenants after giving effect to any additional borrowings.
Senior Credit Facility
On December 27, 2018, GCI, LLC, a wholly-owned subsidiary of the Company, amended and restated the Fifth Amended and Restated Credit Agreement dated as of March 9, 2018 and refinanced the revolving credit facility and term loan A with a new revolving credit facility, leaving the existing Term Loan B in place (the "Senior Credit Facility"). The Senior Credit Facility provides a $240.7 million term loan B ("Term Loan B") and a $550.0 million revolving credit facility.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
GCI, LLC's Senior Credit Facility Total Leverage Ratio (as defined in the Senior Credit Facility) may not exceed 6.50 to one and the Secured Leverage Ratio (as defined in the Senior Credit Facility) may not exceed 4.00 to one.
The revolving credit facility borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin that varies between 1.50% and 2.75% depending on the total leverage ratio. The full principal revolving credit facility included in the Senior Credit Facility will mature on December 27, 2023 or August 6, 2021 if the Term Loan B is not refinanced or repaid in full prior to such date.
The interest rate for the Term Loan B is LIBOR plus 2.25%. The Term Loan B requires principal payments of 0.25% of the original principal amount on the last day of each calendar quarter with the full amount maturing on February 2, 2022.
The terms of the Senior Credit Facility include customary representations and warranties, customary affirmative and negative covenants and customary events of default. At any time after the occurrence of an event of default under the Senior Credit Facility, the lenders may, among other options, declare any amounts outstanding under the Senior Credit Facility immediately due and payable and terminate any commitment to make further loans under the Senior Credit Facility. The obligations under the Senior Credit Facility are secured by a security interest on substantially all of the assets of GCI Holdings and the subsidiary guarantors, as defined in the Senior Credit Facility, and on the stock of GCI Holdings.
As of September 30, 2019, there is $238.3 million outstanding under the Term Loan B, $475.0 million outstanding under the revolving portion of the Senior Credit Facility and $8.1 million in letters of credit under the Senior Credit Facility, which leaves $66.9 million available for borrowing so long as we are in compliance with the debt covenants after giving effect to any additional borrowings.
Wells Fargo Note Payable
GCI Holdings issued a note to Wells Fargo that matures on July 15, 2029 and is payable in monthly installments of principal and interest (the "Wells Fargo Note Payable"). The interest rate is variable at one month LIBOR plus 2.25%.
The note is subject to similar affirmative and negative covenants as the Senior Credit Facility. The obligations under the note are secured by a security interest and lien on the building purchased with the note.
Debt Covenants
GCI, LLC is subject to covenants and restrictions under its Senior Notes and Senior Credit Facility. The Company and GCI, LLC are in compliance with all debt maintenance covenants as of September 30, 2019.
Fair Value of Debt
The fair value of the Senior Notes was $828.5 million at September 30, 2019.
Due to the variable rate nature of the Margin Loan, Senior Credit Facility and Wells Fargo Note Payable, the Company believes that the carrying amount approximates fair value at September 30, 2019.
(9) Leases
In February 2016 and subsequently, the FASB issued new guidance which revises the accounting for leases (“ASC 842”). Under the new guidance, entities that lease assets are required to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases regardless of whether they are classified as finance or operating leases. In addition, new disclosures are required to meet the objective of enabling users of the financial statements to better understand the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted this guidance on January 1, 2019 and elected the optional transition method that allowed for a cumulative-effect adjustment in the period of adoption. Results for reporting periods beginning after January 1, 2019 are presented under the new guidance, while prior period amounts were not adjusted and continue to be reported under the accounting standards in effect for those periods.
The Company elected certain of the available transition practical expedients, including those that permit it to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
existing leases, and (3) any initial direct costs for any existing leases as of the effective date. The Company did not elect the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment. The most significant impact of the new guidance was the recognition of right-of-use ("ROU") assets and lease liabilities for operating leases. In addition, the Company elected the practical expedient to account for the lease and non-lease components as a single lease component and will not recognize ROU assets or lease liabilities for short-term leases, which are those leases with a term of twelve months or less at the lease commencement date.
The Company recognized $107 million of ROU assets, $28 million of short-term operating lease liabilities and $79 million of long-term operating lease liabilities in the accompanying condensed consolidated balance sheet upon the adoption of the new standard.
In 2016 and 2017, GCI Holdings sold certain tower sites and entered into a master lease agreement in which it leased back space on those tower sites. At the time, GCI Holdings determined that it was precluded from applying sales-leaseback accounting. Upon adoption of ASC 842, GCI Holdings considered whether this transaction would have resulted in a completed sale-leaseback transaction and concluded that the transaction did not meet the criteria and should continue to be accounted for in the same manner as previously determined.
The Company has entered into finance lease agreements with satellite providers for transponder capacity to transmit voice and data traffic in rural Alaska. The Company is also party to finance lease agreements for an office building and certain retail store locations. The Company also leases office space, land for towers and communication facilities, satellite transponders, fiber capacity, and equipment. These leases are classified as operating leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future lease payments using our incremental borrowing rate at the commencement date of the lease. During the nine months ended September 30, 2019, the Company amended its lease agreement with a satellite provider that resulted in a $22.5 million reduction to the finance lease liability and a $16.0 million reduction to fixed assets, resulting in a gain of $6.5 million that is included in Other, net on the condensed consolidated statements of operations.
Our leases have remaining lease terms of less than one year to 31 years, some of which may include the option to extend for up to 40 years, and some of which include options to terminate the leases within 18 years.
The components of lease cost during the three and nine months ended September 30, 2019 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
September 30, 2019
|
|
September 30, 2019
|
|
|
amounts in thousands
|
Operating lease cost (1)
|
|
$
|
12,806
|
|
|
33,515
|
|
|
|
|
|
|
Finance lease cost
|
|
|
|
|
Depreciation of leased assets
|
|
$
|
722
|
|
|
4,321
|
|
Interest on lease liabilities
|
|
91
|
|
|
908
|
|
Total finance lease cost
|
|
$
|
813
|
|
|
5,229
|
|
(1) Included within operating lease costs were short-term lease costs and variable lease costs, which were not material to the financial statements.
For the three months ended September 30, 2018, the Company recorded depreciation expense on finance leases (previously referred to as capital leases) and operating lease expense of $2.2 million and $13.3 million, respectively. For the nine months ended September 30, 2018, the Company recorded depreciation expense on finance leases (previously referred to as capital leases) and operating lease expense of $5.0 million and $30.1 million, respectively.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The remaining weighted-average lease term and the weighted average discount rate were as follows:
|
|
|
|
|
|
|
Nine months ended
|
|
|
September 30, 2019
|
Weighted-average remaining lease term (years):
|
|
|
Finance leases
|
|
3.6
|
|
Operating leases
|
|
4.9
|
|
Weighted-average discount rate:
|
|
|
Finance leases
|
|
5.1
|
%
|
Operating leases
|
|
5.0
|
%
|
Supplemental balance sheet information related to leases was as follows:
|
|
|
|
|
|
|
|
September 30,
|
|
|
2019
|
|
|
amounts in thousands
|
Operating leases:
|
|
|
Operating lease ROU assets, net (1)
|
|
$
|
132,769
|
|
|
|
|
Current operating lease liabilities (2)
|
|
$
|
40,638
|
|
Operating lease liabilities (3)
|
|
88,931
|
|
Total operating lease liabilities
|
|
$
|
129,569
|
|
|
|
|
Finance Leases:
|
|
|
Property and equipment, at cost
|
|
$
|
18,102
|
|
Accumulated depreciation
|
|
(4,574
|
)
|
Property and equipment, net
|
|
$
|
13,528
|
|
|
|
|
Current obligations under finance leases (4)
|
|
$
|
4,894
|
|
Obligations under finance leases
|
|
8,614
|
|
Total finance lease liabilities
|
|
$
|
13,508
|
|
(1) Operating lease ROU assets, net are included within the other assets, net line item in the accompanying condensed consolidated balance sheets.
(2) Current operating lease liabilities are included within the other current liabilities line item in the accompanying condensed consolidated balance sheets.
(3) Operating lease liabilities are included within the other liabilities line item in the accompanying condensed consolidated balance sheets.
(4) Current obligations under finance leases are included within the other current liabilities line item in the accompanying condensed consolidated balance sheets.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Supplemental cash flow information related to leases was as follows:
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
September 30, 2019
|
|
|
amounts in thousands
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
Operating cash flows from operating leases
|
|
$
|
33,710
|
|
Operating cash flows from finance leases
|
|
$
|
983
|
|
Financing cash flows from finance leases
|
|
$
|
6,405
|
|
ROU assets obtained in exchange for lease obligations
|
|
|
Operating leases
|
|
$
|
39,178
|
|
Finance leases
|
|
$
|
—
|
|
Future lease payments under finance leases, operating leases and tower obligations with initial terms of one year or more at September 30, 2019 consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
Finance Leases
|
|
Operating Leases
|
|
Tower Obligations
|
|
amounts in thousands
|
Remainder of 2019
|
$
|
1,373
|
|
|
12,059
|
|
|
1,932
|
|
2020
|
5,491
|
|
|
44,512
|
|
|
7,797
|
|
2021
|
4,076
|
|
|
35,435
|
|
|
7,953
|
|
2022
|
1,973
|
|
|
21,683
|
|
|
8,112
|
|
2023
|
678
|
|
|
14,552
|
|
|
8,274
|
|
Thereafter
|
1,734
|
|
|
23,185
|
|
|
142,825
|
|
Total lease payments
|
15,325
|
|
|
151,426
|
|
|
176,893
|
|
Less: imputed interest
|
(1,817
|
)
|
|
(21,857
|
)
|
|
(85,247
|
)
|
Total lease liabilities
|
$
|
13,508
|
|
|
129,569
|
|
|
91,646
|
|
(10) Preferred Stock
GCI Liberty Series A Cumulative Redeemable Preferred Stock (the "Preferred Stock") was issued as a result of the auto conversion that occurred on March 8, 2018. The Company is required to redeem all outstanding shares of Preferred Stock out of funds legally available, at the liquidation price plus all unpaid dividends (whether or not declared) accrued from the most recent dividend payment date through the redemption date, on the first business day following the twenty-first anniversary of the March 8, 2018 auto conversion. There were 7,500,000 shares of Preferred Stock authorized and 7,211,759 shares issued and outstanding at September 30, 2019. An additional 42,500,000 shares of preferred stock of the Company are authorized and are undesignated as to series. The Preferred Stock is accounted for as a liability in the accompanying condensed consolidated balance sheets because it is mandatorily redeemable. As a result, all dividends paid on the Preferred Stock are recorded as interest expense in the accompanying condensed consolidated statements of operations.
The liquidation price is measured per share and shall mean the sum of (i) $25, plus (ii) an amount equal to all unpaid dividends (whether or not declared) accrued with respect to such share have been added to and then remain part of the liquidation price as of such date.
The holders of shares of Preferred Stock are entitled to receive, when and as declared by the GCI Liberty Board of Directors, out of legally available funds, preferential dividends that accrue and cumulate as provided in the restated GCI Liberty certificate of incorporation.
Dividends on each share of Preferred Stock accrued on a daily basis at an initial rate of 5.00% per annum of the liquidation price, and increased to 7.00% per annum of the liquidation price effective July 16, 2018 as a result of the Reincorporation Merger in the State of Delaware in May 2018.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Accrued dividends are payable quarterly on each dividend payment date, which is January 15, April 15, July 15, and October 15 of each year, commencing on the first such date following the auto conversion, which occurred immediately after the market closed on March 8, 2018. If GCI Liberty fails to pay cash dividends on the Preferred Stock in full for any four consecutive or non-consecutive dividend periods then the dividend rate shall increase by 2.00% per annum of the liquidation price until cured. On September 16, 2019, the Company announced that it declared a quarterly cash dividend of approximately $0.44 per share of Preferred Stock which was paid on October 15, 2019 to shareholders of record of the Preferred Stock at the close of business on September 30, 2019.
(11) Variable Interest Entities
New Markets Tax Credit Entities
GCI entered into several arrangements under the New Markets Tax Credit ("NMTC") program with US Bancorp to help fund various projects that extended terrestrial broadband service for the first time to rural Northwestern Alaska communities via a high capacity hybrid fiber optic and microwave network. The NMTC program was provided for in the Community Renewal Tax Relief Act of 2000 (the “Act”) to induce capital investment in qualified lower income communities. The Act permits taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities (“CDEs”). CDEs are privately managed investment institutions that are certified to make qualified low-income community investments.
Each of the transactions has an investment fund, which is a special purpose entity created to effect the financing arrangement. In each of the transactions, the Company loaned money to the investment fund and US Bancorp invested money in the investment fund. The investment fund would then contribute the funds from the Company's loan and US Bancorp's investment to a CDE. The CDE, in turn, would loan the funds to the Company's wholly owned subsidiary, Unicom, Inc. ("Unicom") as partial financing for the projects.
US Bancorp is entitled to substantially all of the benefits derived from the NMTCs. All of the loan proceeds to Unicom, net of syndication and arrangement fees, were restricted for use on the projects. Restricted cash of $0.7 million was held by Unicom at September 30, 2019 and is included in the accompanying condensed consolidated balance sheets. The Company completed construction of the projects partially funded by these transactions.
These transactions include put/call provisions whereby the Company may be obligated or entitled to repurchase US Bancorp’s interest in each investment fund for a nominal amount. The Company believes that US Bancorp will exercise the put options at the end of the compliance periods for each of the transactions. The NMTCs are subject to 100% recapture for a period of seven years as provided in the Internal Revenue Code of 1986, as amended. The Company is required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangements. Non-compliance with applicable requirements could result in projected tax benefits not being realized by US Bancorp. The Company has agreed to indemnify US Bancorp for any loss or recapture of NMTCs until such time as its obligation to deliver tax benefits is relieved. There have been no credit recaptures as of September 30, 2019. The value attributed to the put/calls is nominal.
The Company has determined that each of the investment funds are variable interest entities ("VIEs"). The consolidated financial statements of each of the investment funds include the CDEs. The ongoing activities of the VIEs – collecting and remitting interest and fees and NMTC compliance – were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the VIEs. Management considered the contractual arrangements that obligate the Company to deliver tax benefits and provide various other guarantees to US Bancorp; US Bancorp’s lack of a material interest in the underlying economics of the project; and the fact that the Company is obligated to absorb losses of the VIEs. The Company concluded that it is the primary beneficiary of each and consolidated the VIEs in accordance with the accounting standard for consolidation.
The assets and liabilities of the consolidated VIEs were $89 million and $63 million, respectively, as of September 30, 2019.
The assets of the VIEs serve as the sole source of repayment for the debt issued by these entities. US Bank does not have recourse to us or our other assets, with the exception of customary representations and indemnities the Company has provided. The Company is not required and does not currently intend to provide additional financial support to these VIEs.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
While these subsidiaries are included in the Company's consolidated financial statements, these subsidiaries are separate legal entities and their assets are legally owned by them and not available to the Company's creditors.
The following table summarizes the key terms of each of the NMTC transactions:
|
|
|
|
|
|
|
|
|
|
|
Financing Arrangement
|
Investment Funds
|
Transaction Date
|
Loan Amount
|
Interest Rate on Loan to Investment Fund
|
Maturity Date
|
US Bancorp Investment
|
Loan to Unicom
|
Interest Rate on Loan(s) to Unicom
|
Expected Put Option Exercise
|
NMTC #2
|
TIF 2 & TIF 2-USB
|
October 3, 2012
|
$37.7 million
|
1%
|
October 2, 2042
|
$17.5 million
|
$52.0 million
|
0.71% to 0.77%
|
October 2019
|
NMTC #3
|
TIF 3
|
December 11, 2012
|
$8.2 million
|
1%
|
December 10, 2042
|
$3.8 million
|
$12.0 million
|
1.35%
|
December 2019
|
NMTC #4
|
TIF 4
|
March 21, 2017
|
$6.7 million
|
1%
|
March 21, 2040
|
$3.3 million
|
$9.8 million
|
0.73%
|
March 2024
|
NMTC #5
|
TIF 5-1 and TIF 5-2
|
December 22, 2017
|
$10.4 million
|
1%
|
December 22, 2047
|
$5.1 million
|
$14.7 million
|
0.67% to 1.24%
|
December 2024
|
(12) Stock-Based Compensation
GCI Liberty has granted to certain directors, employees and employees of its subsidiaries, restricted shares (“RSAs”), restricted stock units (“RSUs”) and options to purchase shares of GCI Liberty’s common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options, RSAs and RSUs) 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 selling, general and administrative expenses in the accompanying condensed consolidated statements of operations are $5.8 million and $7.8 million of stock based compensation during the three months ended September 30, 2019 and 2018, respectively, and $18.2 million and $20.9 million during the nine months ended September 30, 2019 and 2018, respectively.
During the nine months ended September 30, 2019, and in connection with our CEO's employment agreement, GCI Liberty granted 22 thousand options to purchase shares of GCI Liberty Series B common stock and 51 thousand performance-based RSUs of GCI Liberty Series B common stock to our CEO. Such options had a GDFV of $18.27 per share. The RSUs had a GDFV of $53.78 per share at the time they were granted. The options cliff vested immediately upon grant, and the RSUs cliff vest in one year from the month of grant, subject to the 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.
The Company has calculated the GDFV for all of its equity classified Awards and any subsequent remeasurement of its liability classified Awards using the Black-Scholes-Merton 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 GCI Liberty's stock and the implied volatility of publicly traded GCI Liberty 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.
GCI Liberty-Outstanding Awards
The following tables present the number and weighted average exercise price ("WAEP") of Awards to purchase GCI Liberty 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.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
|
|
|
|
Weighted
|
|
Aggregate
|
|
|
|
|
|
|
average
|
|
intrinsic
|
|
|
Awards
|
|
|
|
remaining
|
|
value
|
|
|
(000's)
|
|
WAEP
|
|
life
|
|
(millions)
|
Outstanding at January 1, 2019
|
|
1,650
|
|
|
$
|
47.61
|
|
|
|
|
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
Exercised
|
|
(275
|
)
|
|
$
|
24.66
|
|
|
|
|
|
|
Forfeited/Cancelled
|
|
(49
|
)
|
|
$
|
55.65
|
|
|
|
|
|
|
Outstanding at September 30, 2019
|
|
1,326
|
|
|
$
|
52.08
|
|
|
1.1
|
years
|
|
$
|
13
|
|
Exercisable at September 30, 2019
|
|
1,053
|
|
|
$
|
54.02
|
|
|
0.6
|
years
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B
|
|
|
|
|
|
|
Weighted
|
|
Aggregate
|
|
|
|
|
|
|
average
|
|
intrinsic
|
|
|
Awards
|
|
|
|
remaining
|
|
value
|
|
|
(000's)
|
|
WAEP
|
|
life
|
|
(millions)
|
Outstanding at January 1, 2019
|
|
1,223
|
|
|
$
|
56.10
|
|
|
|
|
|
|
Granted
|
|
22
|
|
|
$
|
58.11
|
|
|
|
|
|
|
Exercised
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
Forfeited/Cancelled
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
Outstanding at September 30, 2019
|
|
1,245
|
|
|
$
|
56.14
|
|
|
3.3
|
years
|
|
$
|
8
|
|
Exercisable at September 30, 2019
|
|
926
|
|
|
$
|
56.05
|
|
|
3.7
|
years
|
|
$
|
6
|
|
As of September 30, 2019, the total unrecognized compensation cost related to unvested options and RSA/RSUs was approximately $4 million and $20 million, respectively. Such amounts will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 1.4 years and 2.5 years, respectively.
As of September 30, 2019, GCI Liberty had 485 thousand RSUs outstanding.
As of September 30, 2019, GCI Liberty reserved for issuance upon exercise of outstanding stock options approximately 1.3 million shares of GCI Liberty Series A common stock and 1.2 million shares of GCI Liberty Series B common stock.
(13) Commitments and Contingencies
Rural Health Care (“RHC”) Program
Subsidiaries of GCI Holdings receive support from various Universal Service Fund ("USF") programs including the RHC Program. The USF programs are subject to change by regulatory actions taken by the Federal Communications Commission ("FCC") or legislative actions. The following paragraphs describe certain separate matters related to the RHC Program that impact or could impact the revenue earned by the Company.
On November 30, 2018, a subsidiary of GCI Holdings received multiple funding denial notices from Universal Service Administrative Company ("USAC"), denying requested funding from the RHC Program operated by a rural health customer (the "Customer") for the funding year that ended on June 30, 2018. In November 2017, USAC requested information from the Customer related to bidding process documentation for two separate service contracts a subsidiary of GCI Holdings has with the Customer. Although the Customer timely responded, USAC found that bids previously received were not submitted with the original funding request and/or that bidding information submitted was related to the wrong bidding year. The Customer filed an appeal with USAC on January 29, 2019 and made a supplemental filing on March 12, 2019.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
On May 6, 2019, the Customer received a letter from USAC that denied the Customer’s appeal for all requested funding on the basis that the Customer failed to indicate that it had received, and failed to submit copies of, the responses or bids received, when it originally sought funding from the RHC Program under the two service contracts that a subsidiary of GCI Holdings has with the Customer. The Customer appealed USAC’s decision to the Wireline Competition Bureau of the FCC on July 5, 2019 but resolution and the timing of the appeal are unknown at this time. As of March 31, 2019, GCI Holdings had accounts receivable of approximately $21.3 million outstanding associated with these two service contracts, which is dependent upon receipt of funding from USAC. Given that USAC has denied the Customer’s appeal as specifically outlined in the May 6, 2019 letter received by the Customer, it is probable that GCI Holdings has incurred a loss and an accounts receivable reserve has been recorded in the amount of $21.3 million and an associated bad debt expense has been recorded during the first quarter of 2019, and included within selling, general, and administrative expense in the condensed consolidated statements of operations. Additionally, because of the uncertainty of the Customer's future appeals process and uncertainty relating to our ability to recover payment directly from the Customer, we no longer believe revenue associated with the two service contracts should be recognized due to the unpredictability surrounding the collection of consideration under these two service contracts currently being denied by USAC. Revenue has not been recognized beyond the first quarter of 2019 and will not be recognized until an adequate level of clarity is reached on the matter and the applicable revenue recognition criteria are met.
(14) Information About the Company's Operating Segments
The Company, through its interests in subsidiaries and other companies, is primarily engaged in the broadband communications services industry. The Company identifies its reportable segments as (A) those consolidated companies that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of the Company’s annual pre‑tax earnings.
The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA (as defined below), and subscriber metrics.
For the three and nine months ended September 30, 2019, the Company has identified the following subsidiary as a reportable segment:
|
|
•
|
GCI Holdings-provides a full range of wireless, data, video, voice, and managed services to residential, businesses, governmental entities, and educational and medical institutions primarily in Alaska.
|
For presentation purposes the Company is providing financial information for Liberty Broadband. While the Company’s equity method investment in Liberty Broadband does not meet the reportable segment threshold defined above, the Company believes that the inclusion of such information is relevant to users of these financial statements.
|
|
•
|
Liberty Broadband-an equity method affiliate of the Company, accounted for at fair value, has a non‑controlling interest in Charter, and a wholly‑owned subsidiary, Skyhook Wireless, Inc. ("Skyhook"). Charter is the second largest cable operator in the United States and a leading broadband communications services company providing video, Internet and voice services. Skyhook provides a Wi‑Fi based location platform focused on providing positioning technology and contextual location intelligence solutions.
|
The Company’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 consolidated subsidiaries included in the segments are the same as those described in the Company’s Summary of Significant Accounting Policies in note 2 to the accompanying consolidated financial statements to the Annual Report on Form 10-K for the year ended December 31, 2018.
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Performance Measures
Revenue by segment from contracts with customers, classified by customer type and significant service offerings follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
September 30,
|
|
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
amounts in thousands
|
GCI Holdings
|
|
|
|
|
|
|
|
Consumer Revenue
|
|
|
|
|
|
|
|
Wireless
|
$
|
29,509
|
|
|
25,584
|
|
|
84,506
|
|
|
62,312
|
|
Data
|
42,920
|
|
|
39,652
|
|
|
125,555
|
|
|
88,921
|
|
Video
|
21,194
|
|
|
22,272
|
|
|
63,255
|
|
|
50,180
|
|
Voice
|
4,051
|
|
|
4,368
|
|
|
12,833
|
|
|
10,246
|
|
Business Revenue
|
|
|
|
|
|
|
|
Wireless
|
20,060
|
|
|
18,071
|
|
|
57,837
|
|
|
44,889
|
|
Data
|
69,960
|
|
|
59,585
|
|
|
201,803
|
|
|
154,239
|
|
Video
|
4,115
|
|
|
4,927
|
|
|
11,928
|
|
|
9,436
|
|
Voice
|
6,747
|
|
|
6,361
|
|
|
19,587
|
|
|
14,282
|
|
Lease, grant, and revenue from subsidies
|
22,472
|
|
|
24,226
|
|
|
67,914
|
|
|
55,114
|
|
Total GCI Holdings
|
221,028
|
|
|
205,046
|
|
|
645,218
|
|
|
489,619
|
|
Corporate and other
|
6,016
|
|
|
5,100
|
|
|
17,128
|
|
|
15,221
|
|
Total
|
$
|
227,044
|
|
|
210,146
|
|
|
662,346
|
|
|
504,840
|
|
Liberty Broadband revenue totaled $3.7 million and $3.5 million for the three months ended September 30, 2019 and 2018, respectively and $10.9 million and $18.7 million for the nine months ended September 30, 2019 and 2018, respectively.
The Company had gross receivables of $216 million and deferred revenue of $38 million at September 30, 2019 from contracts with customers, which amounts exclude receivables and deferred revenue arising from leases, grants, and subsidies. Our customers generally pay for services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in the accompanying condensed consolidated statements of operations as the services are provided. Changes in the contract liability balance for the Company during the nine months ended September 30, 2019 were not materially impacted by other factors.
The Company expects to recognize revenue in the future related to performance obligations that are unsatisfied (or partially unsatisfied) of approximately $63 million in the remainder of 2019, $233 million in 2020, $164 million in 2021, $112 million in 2022 and $97 million in 2023 and thereafter.
The Company applies certain practical expedients as permitted under ASC 606 and does not disclose information about remaining performance obligations that have original expected durations of one year or less, information about revenue remaining from usage based performance obligations that are recognized over time as-invoiced, or variable consideration allocated to wholly unsatisfied performance obligations.
For segment reporting purposes, the Company defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock‑based compensation). The Company 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, insurance proceeds and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in
GCI LIBERTY, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP.
Adjusted OIBDA is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
amounts in thousands
|
GCI Holdings
|
$
|
71,960
|
|
|
57,945
|
|
|
182,552
|
|
|
156,608
|
|
Liberty Broadband
|
(4,586
|
)
|
|
(2,198
|
)
|
|
(11,877
|
)
|
|
(414
|
)
|
Corporate and other
|
(5,382
|
)
|
|
(7,205
|
)
|
|
(17,199
|
)
|
|
(20,256
|
)
|
|
61,992
|
|
|
48,542
|
|
|
153,476
|
|
|
135,938
|
|
Eliminate Liberty Broadband
|
4,586
|
|
|
2,198
|
|
|
11,877
|
|
|
414
|
|
|
$
|
66,578
|
|
|
50,740
|
|
|
165,353
|
|
|
136,352
|
|
Other Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
|
Total
|
|
Investments
|
|
Capital
|
|
|
assets
|
|
in affiliates
|
|
expenditures
|
|
|
amounts in thousands
|
GCI Holdings
|
|
$
|
3,346,168
|
|
|
580
|
|
|
107,431
|
|
Liberty Broadband
|
|
12,172,047
|
|
|
12,067,329
|
|
|
75
|
|
Corporate and other
|
|
7,299,135
|
|
|
168,259
|
|
|
1,202
|
|
Eliminate Liberty Broadband
|
|
(12,172,047
|
)
|
|
(12,067,329
|
)
|
|
(75
|
)
|
Consolidated
|
|
$
|
10,645,303
|
|
|
168,839
|
|
|
108,633
|
|
The following table provides a reconciliation of Adjusted OIBDA to operating income (loss) and earnings (loss) from continuing operations before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
amounts in thousands
|
Adjusted OIBDA
|
$
|
66,578
|
|
|
50,740
|
|
|
165,353
|
|
|
136,352
|
|
Stock‑based compensation
|
(5,768
|
)
|
|
(7,761
|
)
|
|
(18,153
|
)
|
|
(20,926
|
)
|
Depreciation and amortization
|
(66,466
|
)
|
|
(62,848
|
)
|
|
(200,035
|
)
|
|
(143,257
|
)
|
Insurance proceeds and restructuring, net
|
1,482
|
|
|
—
|
|
|
(236
|
)
|
|
—
|
|
Operating income (loss)
|
(4,174
|
)
|
|
(19,869
|
)
|
|
(53,071
|
)
|
|
(27,831
|
)
|
Interest expense
|
(38,353
|
)
|
|
(37,614
|
)
|
|
(116,357
|
)
|
|
(81,304
|
)
|
Share of earnings (loss) of affiliates, net
|
1,921
|
|
|
10,856
|
|
|
(2,443
|
)
|
|
18,714
|
|
Realized and unrealized gains (losses) on financial instruments, net
|
156,165
|
|
|
495,509
|
|
|
1,844,863
|
|
|
(4,328
|
)
|
Tax Sharing Agreement
|
2,362
|
|
|
2,492
|
|
|
18,895
|
|
|
(25,456
|
)
|
Other, net
|
(540
|
)
|
|
(834
|
)
|
|
13,824
|
|
|
(982
|
)
|
Earnings (loss) from continuing operations before income taxes
|
$
|
117,381
|
|
|
450,540
|
|
|
1,705,711
|
|
|
(121,187
|
)
|