Annual report pursuant to Section 13 and 15(d)

Information About Liberty's Operating Segments

v3.8.0.1
Information About Liberty's Operating Segments
12 Months Ended
Dec. 31, 2017
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments

(18)  Information About Liberty’s Operating Segments

The Company, through its ownership interests in subsidiaries and other companies, is primarily engaged in the media 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.

The Company has identified the following subsidiaries as its reportable segments:

·

SIRIUS XM is a consolidated subsidiary that provides a subscription based satellite radio service. SIRIUS XM transmits 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 its two proprietary satellite radio systems—the Sirius system and the XM system. Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand, over SIRIUS XM’s Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment. SIRIUS XM also provides connected vehicle services. SIRIUS XM’s connected vehicle services are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers.

·

Formula 1 is a global motorsports business that holds exclusive commercial rights with respect to the World Championship, an annual, approximately nine-month long, motor race-based competition in which teams compete for the Constructors’ Championship and drivers compete for the Drivers’ Championship. The World Championship takes place on various circuits with a varying number of events taking place in different countries around the world each season. Formula 1 is responsible for the commercial exploitation and development of the World Championship as well as various aspects of its management and administration. The Company acquired a controlling interest in Formula 1 on January 23, 2017, at which time it began consolidating the results of the Formula 1 business.

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,

 

 

 

2017

 

2016

 

2015

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

5,425

 

2,109

 

5,014

 

1,853

 

4,552

 

1,660

 

Corporate and other

 

 

 —

 

(15)

 

 —

 

(15)

 

 —

 

 —

 

Total Liberty SiriusXM Group

 

 

5,425

 

2,094

 

5,014

 

1,838

 

4,552

 

1,660

 

Braves Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

386

 

 2

 

262

 

(20)

 

243

 

 3

 

Total Braves Group

 

 

386

 

 2

 

262

 

(20)

 

243

 

 3

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

1,783

 

438

 

 —

 

 —

 

 —

 

 —

 

Corporate and other

 

 

 —

 

(41)

 

 —

 

(45)

 

 —

 

(35)

 

Total Formula One Group

 

 

1,783

 

397

 

 —

 

(45)

 

 —

 

(35)

 

Total

 

$

7,594

 

2,493

 

5,276

 

1,773

 

4,795

 

1,628

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

December 31, 2016

 

 

    

Total

    

Investments

    

Capital

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

27,837

 

672

 

288

 

26,978

 

164

 

206

 

Corporate and other

 

 

693

 

 —

 

 —

 

73

 

 —

 

 —

 

Total Liberty SiriusXM Group

 

 

28,530

 

672

 

288

 

27,051

 

164

 

206

 

Braves Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

1,866

 

145

 

219

 

1,548

 

61

 

360

 

Total Braves Group

 

 

1,866

 

145

 

219

 

1,548

 

61

 

360

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

9,461

 

 —

 

 8

 

NA

 

NA

 

NA

 

Corporate and other

 

 

2,341

 

933

 

 2

 

2,995

 

892

 

 2

 

Total Formula One Group

 

 

11,802

 

933

 

10

 

2,995

 

892

 

 2

 

Elimination (1)

 

 

(202)

 

 —

 

 —

 

(217)

 

 —

 

 —

 

Consolidated Liberty

 

$

41,996

 

1,750

 

517

 

31,377

 

1,117

 

568

 


(1)

This is primarily the intergroup interest in the Braves Group held by the Formula One Group, as discussed in note 2. The intergroup interest attributable to the Formula One Group is presented as an asset and the intergroup interest attributable to the Braves Group is presented as a liability in the attributed financial statements and the offsetting amounts between tracking stock groups are eliminated in consolidation.

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

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

    

2017

    

2016

    

2015

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

 

$

2,493

 

1,773

 

1,628

 

Legal settlement (note 17)

 

 

(45)

 

465

 

(108)

 

Stock-based compensation

 

 

(230)

 

(150)

 

(204)

 

Depreciation and amortization

 

 

(824)

 

(354)

 

(362)

 

Operating income (loss)

 

 

1,394

 

1,734

 

954

 

Interest expense

 

 

(591)

 

(362)

 

(328)

 

Share of earnings (losses) of affiliates, net

 

 

104

 

14

 

(40)

 

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

 

 

(88)

 

37

 

(140)

 

Other, net

 

 

 8

 

(4)

 

12

 

Earnings (loss) from continuing operations before income taxes

 

$

827

 

1,419

 

458

 

Revenue by Geographic Area

Revenue by geographic area based on the country of domicile is as follows:

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

    

2017

    

2016

    

2015

 

 

 

amounts in millions

 

United States

 

$

5,724

 

5,230

 

4,739

 

United Kingdom

 

 

1,783

 

 —

 

 —

 

Other

 

 

87

 

46

 

56

 

 

 

$

7,594

 

5,276

 

4,795

 

Long-lived Assets by Geographic Area

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2017

    

2016

 

 

 

amounts in millions

 

United States

 

$

2,529

 

2,352

 

United Kingdom

 

 

12

 

 —

 

 

 

$

2,541

 

2,352