Annual report pursuant to Section 13 and 15(d)

Information About Liberty's Operating Segments

v3.3.1.900
Information About Liberty's Operating Segments
 12 Months Ended
Dec. 31, 2015
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments

(17)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 SIRIUS XM as its reportable segment. 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 and MySXM, over the Internet, including through applications for mobile devices.

 

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,

 

 

 

2015

 

2014

 

2013

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

SIRIUS XM

 

$
4,552

 
1,660

 
4,141

 
1,466

 
3,625

 
1,289

 

Corporate and other

 

 
243

 
(32)

 
309

 
(49)

 
377

 
33

 

Total

 

$
4,795

 
1,628

 
4,450

 
1,417

 
4,002

 
1,322

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

 

December 31, 2014

 

 

    

Total

    

Investments

    

Capital

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

SIRIUS XM

 

$
27,001

 
153

 
135

 
27,091

 
237

 
126

 

Corporate and other

 

 
2,797

 
962

 
161

 
3,178

 
614

 
68

 

Total

 

$
29,798

 
1,115

 
296

 
30,269

 
851

 
194

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

    

2015

    

2014

    

2013

 

 

 

 

 

 

 

 

 

 

Consolidated segment Adjusted OIBDA

 

$
1,628

 
1,417

 
1,322

 

Legal settlement (note 16)

 

 
(108)

 

 —

 

 —

 

Stock-based compensation

 

 
(204)

 
(217)

 
(193)

 

Depreciation and amortization

 

 
(362)

 
(359)

 
(315)

 

Interest expense

 

 
(328)

 
(255)

 
(132)

 

Dividend and interest income

 

 
17

 
27

 
48

 

Share of earnings (losses) of affiliates, net

 

 
(40)

 
(113)

 
(32)

 

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

 

 
(140)

 
38

 
295

 

Gains (losses) on transactions, net

 

 
(4)

 

 —

 
7,978

 

Other, net

 

 
(1)

 
(77)

 
(115)

 

Earnings (loss) from continuing operations before income taxes

 

$
458

 
461

 
8,856