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
 9 Months Ended
Sep. 30, 2014
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments

(10)   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 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 nine months ended September 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30,

 

 

 

2014

 

2013

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

SIRIUS XM

 

$
3,060 

 
1,085 

 
2,626 

 
956 

 

Corporate and other

 

 
295 

 
(27)

 
351 

 
47 

 

 

 

$
3,355 

 
1,058 

 
2,977 

 
1,003 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  September 30,

 

 

 

2014

 

2013

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

SIRIUS XM

 

$
1,047 

 
381 

 
959 

 
353 

 

Corporate and other

 

 
137 

 
11 

 
151 

 
26 

 

 

 

$
1,184 

 
392 

 
1,110 

 
379 

 

 

 Other Information

 

 

 

 

 

 

 

 

 

 

 

September 30, 2014

 

 

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

SIRIUS XM

 

$
28,011 

 
239 

 
87 

 

Corporate and other

 

 
5,834 

 
3,059 

 
66 

 

 

 

$
33,845 

 
3,298 

 
153 

 

The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

 

    

2014

    

2013

    

2014

    

2013

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

 

$
392 

 
379 

 
1,058 

 
1,003 

 

Stock-based compensation

 

 
(53)

 
(52)

 
(151)

 
(141)

 

Depreciation and amortization

 

 
(90)

 
(79)

 
(272)

 
(237)

 

Interest expense

 

 
(70)

 
(39)

 
(185)

 
(78)

 

Dividend and interest income

 

 
6 

 
12 

 
22 

 
37 

 

Share of earnings (losses) of affiliates, net

 

 
(6)

 
(8)

 
(53)

 
(12)

 

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

 

 
(15)

 
64 

 
(55)

 
222 

 

Gains (losses) on transactions, net

 

 
(1)

 

 —

 
1 

 
7,481 

 

Other, net

 

 
(13)

 
(67)

 
(69)

 
(73)

 

Earnings (loss) from continuing operations before income taxes

 

$
150 

 
210 

 
296 

 
8,202