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Acquisition | 3 Months Ended
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Mar. 31, 2021
Acquisition |
Acquisition | (3) Acquisition On December 18, 2020, the Company completed the Combination with GCI Liberty. The Company accounted for the Combination using the acquisition method of accounting. The following details the acquisition consideration as of December 18, 2020 (amounts in thousands), which is primarily based on level 1 inputs:
​ | ​ | ​ | ​ | ​
Fair value of newly issued Liberty Broadband Series C and B common stock 1 | ​ | $ | 9,695,184 | ​
Fair value of newly issued Liberty Broadband Preferred Stock 2 | ​ | ​ | 202,944 | ​
Fair value of share-based payment replacement awards 3 | ​ | ​ | 104,683 | ​
Total fair value of consideration | ​ | ​ | 10,002,811 | ​
Less: Fair value of Liberty Broadband shares attributable to share repurchase 4 | ​ | ​ | (6,738,609) | ​
Total fair value of consideration attributable to business combination | ​ | ​ | 3,264,202 | ​
Less: Fair value of newly issued Liberty Broadband Preferred Stock2 | ​ | ​ | (202,944) | ​
Less: Fair value of share-based payment replacement awards accounted for as liability awards | ​ | ​ | (1,309) | ​
Total fair value of acquisition consideration to be allocated | ​ | $ | 3,059,949 | ​
| (1) | The fair value of newly issued Series C and B Liberty Broadband common stock was calculated by multiplying (i) the outstanding shares of GCI Liberty Series A and B common stock as of December 18, 2020 (ii) the exchange ratio of 0.580, and (iii) the closing share price of Liberty Broadband Series C and B common stock on December 18, 2020. Liberty Broadband issued 61.3 million shares of Series C common stock and 98 thousand shares of Series B common stock.
​
| (2) | The fair value of the newly issued Liberty Broadband Preferred Stock was calculated by multiplying (i) the outstanding shares of GCI Liberty Preferred Stock as of December 18, 2020, and (ii) the closing share price of GCI
|  | Liberty Preferred Stock on December 18, 2020. The GCI Liberty Preferred Stock was converted on a one to one ratio into Liberty Broadband Preferred Stock.
​
| (3) | This amount represents the fair value of share-based payment replacement awards.
​
| (4) | GCI Liberty owned approximately 42.7 million shares of Liberty Broadband Series C common stock. The acquisition of Liberty Broadband Series C common stock is accounted for as a share repurchase by Liberty Broadband. This amount was calculated by multiplying (i) the number of shares of Liberty Broadband Series C common stock owned by GCI Liberty as of December 18, 2020 and (ii) the closing share price of Liberty Broadband Series C common stock on December 18, 2020.
​ The application of the acquisition method resulted in the assignment of purchase price to the GCI Liberty assets acquired and liabilities assumed based on preliminary estimates of their acquisition date fair values (primarily level 3). The determination of the fair values of the acquired assets and liabilities (and the determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment. The preliminary acquisition purchase price allocation for GCI Liberty is as follows (amounts in thousands):
​ | ​ | ​ | ​
Cash and cash equivalents including restricted cash |  | $ | 592,240
Receivables | ​ |  | 339,061
Property and equipment | ​ |  | 1,108,588
Goodwill | ​ |  | 758,189
Investment in Charter | ​ | ​ | 3,493,677
Intangible assets not subject to amortization | ​ |  | 586,500
Intangible assets subject to amortization | ​ |  | 638,855
Other assets | ​ |  | 302,570
Deferred revenue | ​ |  | (60,292)
Debt, including obligations under tower and finance leases | ​ |  | (2,772,147)
Indemnification liability | ​ | ​ | (336,141)
Deferred income tax liabilities | ​ |  | (1,018,993)
Preferred stock | ​ |  | (202,944)
Non-controlling interest | ​ |  | (11,771)
Other liabilities | ​ |  | (357,443)
​ | ​ | $ | 3,059,949
​ Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, value associated with future customers, continued innovation and non-contractual relationships. Amortizable intangible assets of $638.9 million were acquired and are comprised of customer relationships with a weighted average useful life of approximately 14 years and right-to-use assets with a weighted average useful life of approximately 12 years. Approximately $134.3 million of the acquired goodwill will be deductible for income tax purposes. As of March 31, 2021, the valuation related to the acquisition of GCI Liberty is not final, and the acquisition price allocation is preliminary and subject to revision. The primary areas of our acquisition price allocation that changed from the initial allocation relate to an increase to property and equipment of $3.5 million, an increase to goodwill of $19.1 million, an increase to intangible assets not subject to amortization of $5.0 million, a decrease to intangible assets subject to amortization of $35.0 million and an increase to deferred income tax liabilities of $7.4 million. The primary areas of the acquisition price allocation that are not yet finalized are related to property and equipment, intangible assets, liabilities, deferred income tax liabilities, and discount rates used to determine the fair value of intangible assets. The unaudited pro forma revenue, net earnings and basic and diluted net earnings per common share of Liberty Broadband, prepared utilizing the historical financial statements of Liberty Broadband, giving effect to acquisition accounting related adjustments made at the time of acquisition, as if the acquisition discussed above occurred on January 1, 2019, are as follows: ​
​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended | ​
​ | ​ | March 31, 2020 | ​
​ | ​ | amounts in thousands, | ​
​ | ​ | except per share amounts | ​
Revenue | ​ | $ | 238,383 | ​
Net earnings (loss) | ​ | $ | 12,318 | ​
Net earnings (loss) attributable to Liberty Broadband shareholders | ​ | $ | 12,343 | ​
Basic net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share | ​ | $ | 0.07 | ​
Diluted net earnings (loss) attributable to Series A, Series B and Series C Liberty Broadband shareholders per common share | ​ | $ | 0.07 | ​
​ The pro forma results include adjustments directly attributable to the business combination including adjustments related to the amortization of acquired tangible and intangible assets, revenue, interest expense, stock-based compensation, and the exclusion of transaction related costs. The pro forma information is not representative of the Company’s future results of operations nor does it reflect what the Company’s results of operations would have been if the acquisition had occurred previously and the Company consolidated the results of GCI Liberty during the period presented.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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