Annual report pursuant to Section 13 and 15(d)

Information About Liberty's Operating Segments

v2.4.0.6
Information About Liberty's Operating Segments
 12 Months Ended
Dec. 31, 2012
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments
Information About Liberty's Operating Segments
The Company, through its ownership interests in subsidiaries and other companies, is primarily engaged in the media, communications and entertainment industries. The Company identifies its reportable segments as (A) those consolidated subsidiaries 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 represent 10% or more of the Company's annual pre-tax earnings. The segment presentation for prior periods has been conformed to the current period segment presentation, as discussed below.
The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue and Adjusted OIBDA. In addition, the Company reviews nonfinancial measures such as subscriber growth and penetration.
The Company defines Adjusted OIBDA as revenue less 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, including each business's ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.
For the year ended December 31, 2012, the Company has identified the following consolidated subsidiaries and equity method affilates as its reportable segments:
•
Starz, LLC—consolidated subsidiary that provides premium subscription video programming to United States multichannel video distributors, including cable operators, satellite television providers and telecommunications companies. Starz also develops, produces and acquires entertainment content and distributes this content to consumers in a wide variety of formats in the United States and throughout the world.
•
ANLBC—consolidated subsidiary that owns and operates the Atlanta Braves Major League Baseball franchise.
•
SIRIUS XM—a 49% owned equity method affiliate that provides a subscription based satellite radio service. SIRIUS XM broadcasts to subscribers over approximately 130 digital-quality channels, including more than 60 channels of 100% commercial-free music, plus exclusive channels of sports, news, talk, entertainment, traffic, weather and data through its two proprietary satellite radio systems -- the Sirius system and the XM system.
During the current year it was determined that SIRIUS XM, due to the change in the investment balance during the year as a result of acquisitions of common stock throughout the period and the significant earnings recognized during the year, was a separate reportable segment. Additionally, TruePosition is no longer considered a reportable segment due to the overall size of the business in comparison to the consolidated results of Liberty. TruePosition in previous years met the quantitative thresholds because of accounting related to certain deferred amounts. We have reflected the results of SIRIUS XM (presented separately) and TruePosition (included in corporate and other) on a comparative basis for all periods presented in the tables below.
The Company's reportable 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 subsidiaries are the same as those described in the Company's summary of significant policies.
Performance Measures
 
Years ended December 31,
 
2012
 
2011
 
2010
 
Revenue
 
Adjusted
OIBDA
 
Revenue
 
Adjusted
OIBDA
 
Revenue
 
Adjusted
OIBDA
 
amounts in millions
 
 
 
 
Starz, LLC
$
1,631

 
445

 
1,615

 
449

 
1,626

 
343

ANLBC
225

 
22

 
208

 
(6
)
 
203

 
6

SIRIUS XM
3,402

 
1,202

 
3,015

 
997

 
2,817

 
863

Corporate and other
143

 
(17
)
 
1,201

 
617

 
221

 
(25
)
Total
5,401

 
1,652

 
6,039

 
2,057

 
4,867

 
1,187

Eliminate equity method affiliate
(3,402
)
 
(1,202
)
 
(3,015
)
 
(997
)
 
(2,817
)
 
(863
)
Consolidated Liberty
$
1,999

 
450

 
3,024

 
1,060

 
2,050

 
324


Other Information
 
December 31, 2012
 
December 31, 2011
 
Total
assets
 
Investments
in affiliates
 
Capital
expenditures
 
Total
assets
 
Investments
in affiliates
 
Capital
expenditures
 
amounts in millions
 
 
 
 
 
 
Starz, LLC
$
2,173

 
—

 
16

 
$
2,630

 
$
—

 
$
8

ANLBC
526

 
32

 
2

 
545

 
31

 
1

SIRIUS XM
9,055

 
—

 
97

 
7,496

 
—

 
137

Corporate and other
5,626

 
3,309

 
13

 
4,544

 
532

 
5

Total
$
17,380

 
3,341

 
128

 
$
15,215

 
$
563

 
$
151

Eliminate equity method affiliate
$
(9,055
)
 
—

 
(97
)
 
$
(7,496
)
 
$
—

 
$
(137
)
Consolidated Liberty
$
8,325

 
3,341

 
31

 
$
7,719

 
$
563

 
$
14



The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:
 
Years ended December 31,
 
2012
 
2011
 
2010
 
 
 
 
Consolidated segment Adjusted OIBDA
$
450

 
1,060

 
324

Stock-based compensation
(66
)
 
(32
)
 
(83
)
Gain (loss) on legal settlement
—

 
(2
)
 
48

Depreciation and amortization
(58
)
 
(69
)
 
(94
)
Interest expense
(33
)
 
(21
)
 
(65
)
Dividend and interest income
78

 
79

 
88

Share of earnings (losses) of affiliates, net
1,346

 
87

 
(98
)
Realized and unrealized gains (losses) on financial instruments, net
232

 
68

 
260

Gains (losses) on dispositions, net
22

 
(10
)
 
36

Other, net
41

 
5

 
10

Earnings (loss) from continuing operations before income taxes
$
2,012

 
1,165

 
426