Quarterly report pursuant to Section 13 or 15(d)

Information About Liberty's Operating Segments

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Information About Liberty's Operating Segments
 6 Months Ended
Jun. 30, 2014
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.
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, churn and penetration.
The Company defines Adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses excluding all 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 six months ended June 30, 2014, the Company has identified the following business as its reportable segment:
•
SIRIUS XM — consolidated subsidiary that provides a subscription based satellite radio service. SIRIUS XM broadcasts music, sports, entertainment, comedy, talk, news, traffic and weather channels as well as infotainment services in the United States on a subscription fee basis through their proprietary satellite radio systems. Subscribers can also receive their music and other channels, plus features such as SiriusXM On Demand and MySXM, over the internet, including through applications for mobile devices. SIRIUS XM is also a leader in providing connected vehicle applications and services. Its connected vehicle services are designed to enhance the safety, security and driving experience for vehicle owners while providing marketing and operational benefits to automakers and their dealers.
The Company's segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, differing revenue sources and marketing strategies. The accounting policies of the segments are the same as those described in the Company's summary of significant policies in the Company's annual financial statements filed on Form 10-K.
Performance Measures
 
Six months ended June 30,
 
2014
 
2013
 
Revenue
 
Adjusted
OIBDA
 
Revenue
 
Adjusted
OIBDA
 
amounts in millions
SIRIUS XM
$
2,013

 
704

 
1,667

 
603

Corporate and other
158

 
(38
)
 
200

 
21

 
$
2,171

 
666

 
1,867

 
624

 
Three months ended June 30,
 
2014
 
2013
 
Revenue
 
Adjusted
OIBDA
 
Revenue
 
Adjusted
OIBDA
 
amounts in millions
SIRIUS XM
$
1,025

 
369

 
938

 
344

Corporate and other
135

 
3

 
140

 
18

 
$
1,160

 
372

 
1,078

 
362


Other Information
 
June 30, 2014
 
Total
assets
 
Investments
in affiliates
 
Capital
expenditures
 
amounts in millions
SIRIUS XM
$
28,111

 
242

 
59

Corporate and other
5,964

 
3,096

 
52

 
$
34,075

 
3,338

 
111



The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2014
 
2013
 
2014
 
2013
 
amounts in millions
Consolidated segment Adjusted OIBDA
$
372

 
362

 
666

 
624

Stock-based compensation
(49
)
 
(48
)
 
(98
)
 
(89
)
Depreciation and amortization
(92
)
 
(88
)
 
(182
)
 
(158
)
Interest expense
(62
)
 
(28
)
 
(115
)
 
(39
)
Share of earnings (losses) of affiliates, net
(12
)
 
(21
)
 
(47
)
 
(4
)
Realized and unrealized gains (losses) on financial instruments, net
25

 
61

 
(40
)
 
158

Gains (losses) on transactions, net
1

 
2

 
2

 
7,481

Other, net
(2
)
 
12

 
(40
)
 
19

Earnings (loss) from continuing operations before income taxes
$
181

 
252

 
146

 
7,992