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, 2015
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, 2015, 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 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 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 SIRIUS XM’s Internet radio service, including through applications for mobile devices. 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  September 30,

 

 

 

2015

 

2014

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

SIRIUS XM

 

$
1,164

 
450

 
1,047

 
381

 

Corporate and other

 

 
120

 
23

 
137

 
11

 

 

 

$
1,284

 
473

 
1,184

 
392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30,

 

 

 

2015

 

2014

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

SIRIUS XM

 

$
3,360

 
1,275

 
3,060

 
1,085

 

Corporate and other

 

 
227

 
(11)

 
295

 
(27)

 

 

 

$
3,587

 
1,264

 
3,355

 
1,058

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

September 30, 2015

 

 

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

SIRIUS XM

 

$
27,845

 
160

 
91

 

Corporate and other

 

 
2,835

 
599

 
85

 

 

 

$
30,680

 
759

 
176

 

 

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,

 

 

    

2015

    

2014

    

2015

    

2014

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

 

$
473

 
392

 
1,264

 
1,058

 

Legal settlement (note 9)

 

 

 —

 

 —

 
(108)

 

 —

 

Stock-based compensation

 

 
(56)

 
(53)

 
(147)

 
(151)

 

Depreciation and amortization

 

 
(96)

 
(90)

 
(272)

 
(272)

 

Interest expense

 

 
(84)

 
(70)

 
(244)

 
(185)

 

Share of earnings (losses) of affiliates, net

 

 
29

 
(6)

 
(8)

 
(53)

 

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

 

 
(200)

 
(15)

 
(188)

 
(55)

 

Other, net

 

 
4

 
(8)

 
12

 
(46)

 

Earnings (loss) from continuing operations before income taxes

 

$
70

 
150

 
309

 
296