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
 3 Months Ended
Mar. 31, 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 three months ended March 31, 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 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 new 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 that are also consolidated subsidiaries 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 March 31,
 
2014
 
2013
 
Revenue
 
Adjusted
OIBDA
 
Revenue
 
Adjusted
OIBDA
 
amounts in millions
SIRIUS XM
$
988

 
335

 
729

 
259

Corporate and other
23

 
(41
)
 
60

 
3

 
$
1,011

 
294

 
789

 
262

 
 
 
 
 
 
 
 

Other Information
 
March 31, 2014
 
Total
assets
 
Investments
in affiliates
 
Capital
expenditures
 
amounts in millions
SIRIUS XM
$
28,151

 
273

 
29

Corporate and other
5,542

 
2,948

 
37

 
$
33,693

 
3,221

 
66



The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:
 
Three months ended
March 31,
 
2014
 
2013
 
amounts in millions
Consolidated segment Adjusted OIBDA
$
294

 
262

Stock-based compensation
(49
)
 
(41
)
Depreciation and amortization
(90
)
 
(70
)
Interest expense
(53
)
 
(11
)
Share of earnings (losses) of affiliates, net
(35
)
 
17

Realized and unrealized gains (losses) on financial instruments, net
(65
)
 
97

Gains (losses) on transactions, net
1

 
7,479

Other, net
(38
)
 
7

Earnings (loss) from continuing operations before income taxes
$
(35
)
 
7,740