| Investments In Affiliates Accounted For Using The Equity Method |
(8)ÌýÌýÌýInvestments in Affiliates Accounted for Using the Equity Method
Ìý
Liberty has various investments accounted for using the equity method. The following table includes Liberty's carrying amount, fair value, and percentage ownership of the more significant investments in affiliates at SeptemberÌý30, 2017 and the carrying amount at DecemberÌý31,Ìý2016:
Ìý
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Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
DecemberÌý31,
|
Ìý
|
|
Ìý
|
Ìý
|
SeptemberÌý30, 2017
|
Ìý
|
2016
|
Ìý
|
|
Ìý
|
ÌýÌýÌýÌý
|
Percentage
|
ÌýÌýÌýÌý
|
FairÌývalue
|
ÌýÌýÌýÌý
|
Carrying
|
ÌýÌýÌýÌý
|
Carrying
|
Ìý
|
|
Ìý
|
Ìý
|
ownership
|
Ìý
|
(Level 1)
|
Ìý
|
amount
|
Ìý
|
amount
|
Ìý
|
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
dollar amounts in millions
|
Ìý
|
|
QVC Group
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
HSN
|
Ìý
|
38
|
%ÌýÌý
|
$
|
782
|
Ìý
|
$
|
198
|
Ìý
|
184
|
Ìý
|
|
Other
|
Ìý
|
various
|
Ìý
|
Ìý
|
NA
|
Ìý
|
Ìý
|
38
|
Ìý
|
40
|
Ìý
|
|
Total QVC Group
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
236
|
Ìý
|
224
|
Ìý
|
|
Ventures Group
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
FTD (1)
|
Ìý
|
37
|
%ÌýÌý
|
Ìý
|
133
|
Ìý
|
Ìý
|
133
|
Ìý
|
216
|
Ìý
|
|
LendingTree (2)
|
Ìý
|
27
|
%ÌýÌý
|
Ìý
|
788
|
Ìý
|
Ìý
|
113
|
Ìý
|
31
|
Ìý
|
|
Other
|
Ìý
|
various
|
Ìý
|
Ìý
|
NA
|
Ìý
|
Ìý
|
91
|
Ìý
|
110
|
Ìý
|
|
Total Ventures Group
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
337
|
Ìý
|
357
|
Ìý
|
|
Consolidated Liberty
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
$
|
573
|
Ìý
|
581
|
Ìý
|
Ìý
|
(1)
|
|
The Company recorded an impairment on its investment in FTD during the third quarter of 2017 in the amount of $50 million.
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|
(2)
|
|
During the nine months ended September 30, 2017, the Company purchased an additional 450 thousand shares of LendingTree.
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Ìý
The following table presents Liberty's share of earnings (losses) of affiliates:
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
Ìý
|
Ìý
|
Three months endedÌýÌýSeptemberÌý30,
|
Ìý
|
Nine months ended SeptemberÌý30,
|
Ìý
|
|
Ìý
|
ÌýÌýÌýÌý
|
2017
|
ÌýÌýÌýÌý
|
2016
|
ÌýÌýÌýÌý
|
2017
|
ÌýÌýÌýÌý
|
2016
|
Ìý
|
|
Ìý
|
Ìý
|
amountsÌýinÌýmillions
|
Ìý
|
|
QVC Group
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
HSN
|
Ìý
|
$
|
12
|
Ìý
|
Ìý9
|
Ìý
|
35
|
Ìý
|
41
|
Ìý
|
|
Other
|
Ìý
|
Ìý
|
(1)
|
Ìý
|
(1)
|
Ìý
|
(4)
|
Ìý
|
(3)
|
Ìý
|
|
Total QVC Group
|
Ìý
|
Ìý
|
11
|
Ìý
|
Ìý8
|
Ìý
|
31
|
Ìý
|
38
|
Ìý
|
|
Ventures Group
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
FTD (1)
|
Ìý
|
Ìý
|
(81)
|
Ìý
|
(7)
|
Ìý
|
(86)
|
Ìý
|
(8)
|
Ìý
|
|
LendingTree
|
Ìý
|
Ìý
|
Ìý2
|
Ìý
|
Ìý2
|
Ìý
|
Ìý5
|
Ìý
|
10
|
Ìý
|
|
Other
|
Ìý
|
Ìý
|
(18)
|
Ìý
|
(25)
|
Ìý
|
(72)
|
Ìý
|
(61)
|
Ìý
|
|
Total Ventures Group
|
Ìý
|
Ìý
|
(97)
|
Ìý
|
(30)
|
Ìý
|
(153)
|
Ìý
|
(59)
|
Ìý
|
|
Consolidated Liberty
|
Ìý
|
$
|
(86)
|
Ìý
|
(22)
|
Ìý
|
(122)
|
Ìý
|
(21)
|
Ìý
|
Ìý
|
(1)
|
|
As discussed above, the Company recorded an impairment of $50 million on its investment in FTD during the third quarter of 2017 which is reflected in the share of earnings (losses) of affiliates line item in the condensed consolidated statement of operations for the three and nine months ended September 30, 2017.
|
Ìý
Investment in Liberty Broadband
Ìý
As discussed in note 1, in connection with the merger of Charter and TWC, on May 18, 2016, Liberty invested $2.4 billion in Liberty Broadband Series C nonvoting shares. As of SeptemberÌý30,Ìý2017, Liberty has a 23% economic ownership interest in Liberty Broadband. Due to overlapping boards of directors and management, Liberty has been deemed to have significant influence over Liberty Broadband for accounting purposes even though Liberty does not have any voting rights. Liberty has elected to apply the fair value option for its investment in Liberty Broadband (Level 1) as it believes that the Company’s investors value this investment based on the trading price of Liberty Broadband. Liberty recognizes changes in the fair value of its investment in Liberty Broadband in realized and unrealized gains (losses) on financial instruments, net in the condensed consolidated statements of operations. Summarized financial information for Liberty Broadband is as follows:
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
Ìý
|
Ìý
|
SeptemberÌý30, 2017
|
Ìý
|
December 31, 2016
|
Ìý
|
|
Ìý
|
Ìý
|
amountsÌýinÌýmillions
|
Ìý
|
|
Current assets
|
Ìý
|
$
|
142
|
Ìý
|
258
|
Ìý
|
|
Investment in Charter, accounted for using the equity method
|
Ìý
|
Ìý
|
9,327
|
Ìý
|
9,315
|
Ìý
|
|
Other assets
|
Ìý
|
Ìý
|
13
|
Ìý
|
18
|
Ìý
|
|
Total assets
|
Ìý
|
Ìý
|
9,482
|
Ìý
|
9,591
|
Ìý
|
|
Long-term debt, including current portion
|
Ìý
|
Ìý
|
497
|
Ìý
|
599
|
Ìý
|
|
Deferred income taxes
|
Ìý
|
Ìý
|
498
|
Ìý
|
505
|
Ìý
|
|
Other liabilities
|
Ìý
|
Ìý
|
17
|
Ìý
|
14
|
Ìý
|
|
Equity
|
Ìý
|
Ìý
|
8,470
|
Ìý
|
8,473
|
Ìý
|
|
Total liabilities and shareholders’ equity
|
Ìý
|
$
|
9,482
|
Ìý
|
9,591
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
Ìý
|
|
Ìý
|
Three months endedÌý
|
Ìý
|
Nine months ended
|
|
Ìý
|
SeptemberÌý30,
|
Ìý
|
SeptemberÌý30,
|
|
Ìý
|
2017
|
Ìý
|
2016
|
Ìý
|
2017
|
Ìý
|
2016
|
Ìý
|
|
Ìý
|
amountsÌýinÌýmillions
|
Ìý
|
amountsÌýinÌýmillions
|
|
Revenue
|
$
|
Ìý3
|
Ìý
|
21
|
Ìý
|
10
|
Ìý
|
27
|
Ìý
|
|
Operating expenses, net
|
Ìý
|
Ìý9
|
Ìý
|
14
|
Ìý
|
29
|
Ìý
|
41
|
Ìý
|
|
Operating income (loss)
|
Ìý
|
(6)
|
Ìý
|
Ìý7
|
Ìý
|
(19)
|
Ìý
|
(14)
|
Ìý
|
|
Share of earnings (losses) of affiliates
|
Ìý
|
(5)
|
Ìý
|
19
|
Ìý
|
25
|
Ìý
|
570
|
Ìý
|
|
Realized and unrealized gains (losses) on financial instruments, net
|
Ìý
|
Ìý3
|
Ìý
|
Ìý—
|
Ìý
|
Ìý5
|
Ìý
|
93
|
Ìý
|
|
Gain (loss) on dilution of investment in affiliate
|
Ìý
|
(4)
|
Ìý
|
(16)
|
Ìý
|
(42)
|
Ìý
|
760
|
Ìý
|
|
Other income (expense), net
|
Ìý
|
(5)
|
Ìý
|
(4)
|
Ìý
|
(14)
|
Ìý
|
(5)
|
Ìý
|
|
Income tax benefit (expense)
|
Ìý
|
Ìý7
|
Ìý
|
(2)
|
Ìý
|
18
|
Ìý
|
(532)
|
Ìý
|
|
Net earnings (loss)
|
$
|
(10)
|
Ìý
|
Ìý4
|
Ìý
|
(27)
|
Ìý
|
872
|
Ìý
|
Ìý
|