| Information About Liberty's Operating Segments |
(19) 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 (as defined below) or total assets and (B) those equity method affiliates whose share of earnings (losses) represent 10% or more of the Company’s annual pre-tax earnings (loss). 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 (as defined below). In addition, the Company reviews nonfinancial measures such as subscriber growth, churn and penetration.
For segment reporting purposes, the Company defines Adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses excluding all stock-based compensation, separately reported litigation settlements and restructuring and impairment charges. The Company believes this measure is an important indicator of the operational strength and performance of its businesses, by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. 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, restructuring, acquisition 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:
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Sirius XM Holdings is a consolidated subsidiary that operates two complementary audio entertainment businesses, Sirius XM and Pandora. Sirius XM features music, sports, entertainment, comedy, talk, news, traffic and weather channels and other content, as well as podcasts and infotainment services, in the United States on a subscription fee basis. Sirius XM’s premier content bundles include live, curated and certain exclusive and on demand programming. The Sirius XM service is distributed through its two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment. Sirius XM also provides connected vehicle services and a suite of in-vehicle data
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services. The Pandora business operates a music, comedy and podcast streaming discovery platform. Pandora is available as an ad-supported radio service, a radio subscription service, called Pandora Plus, and an on-demand subscription service, called Pandora Premium. Sirius XM Holdings acquired Pandora on February 1, 2019, at which time it began consolidating the results of the Pandora business. |
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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.
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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, differing revenue sources and marketing strategies. The significant accounting policies of the segments that are also consolidated subsidiaries are the same as those described in the Company’s summary of significant policies.
As of December 31, 2021, Live Nation met the Company’s reportable segment threshold for equity method affiliates due to significant losses driven by COVID-19. Although the Company owns less than 100% of the outstanding shares of Live Nation, 100% of the Live Nation amount are included in the tables below and are subsequently eliminated in order to reconcile the account totals to the Company’s consolidated financial statements. As disclosed in note 2, the Company’s investment in Live Nation was reattributed from the Formula One Group to the Liberty SiriusXM Group effective April 22, 2020. Live Nation’s revenue and Adjusted OIBDA are reflected with the Formula One Group prior to the reattribution and with the Liberty SiriusXM Group following the reattribution.
Performance Measures
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Years ended December 31, |
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2021 |
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2020 |
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2019 |
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Adjusted |
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Adjusted |
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Adjusted |
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Revenue |
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OIBDA |
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Revenue |
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OIBDA |
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Revenue |
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OIBDA |
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amounts in millions |
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Liberty SiriusXM Group |
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Sirius XM Holdings |
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$ |
8,696 |
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2,770 |
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8,040 |
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2,575 |
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7,794 |
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2,453 |
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Live Nation |
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6,268 |
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324 |
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477 |
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(891) |
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— |
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— |
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Corporate and other |
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— |
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(15) |
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— |
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(31) |
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— |
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(17) |
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14,964 |
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3,079 |
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8,517 |
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1,653 |
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7,794 |
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2,436 |
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Eliminate equity method affiliate |
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(6,268) |
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(324) |
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(477) |
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891 |
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— |
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— |
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Total Liberty SiriusXM Group |
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8,696 |
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2,755 |
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8,040 |
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2,544 |
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7,794 |
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2,436 |
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Braves Group |
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Corporate and other |
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568 |
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104 |
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178 |
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(53) |
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476 |
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49 |
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Total Braves Group |
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568 |
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104 |
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178 |
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(53) |
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476 |
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49 |
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Formula One Group |
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Formula 1 |
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2,136 |
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495 |
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1,145 |
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56 |
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2,022 |
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482 |
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Live Nation |
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NA |
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NA |
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1,384 |
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(125) |
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11,548 |
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943 |
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Corporate and other |
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— |
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(29) |
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— |
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(38) |
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— |
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(36) |
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2,136 |
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466 |
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2,529 |
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(107) |
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13,570 |
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1,389 |
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Eliminate equity method affiliate |
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NA |
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NA |
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(1,384) |
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125 |
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(11,548) |
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(943) |
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Total Formula One Group |
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2,136 |
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466 |
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1,145 |
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18 |
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2,022 |
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446 |
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Total |
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$ |
11,400 |
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3,325 |
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9,363 |
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2,509 |
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10,292 |
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2,931 |
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Other Information
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December 31, 2021 |
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December 31, 2020 |
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Total |
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Investments |
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Capital |
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Total |
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Investments |
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Capital |
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assets |
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in affiliates |
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expenditures |
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assets |
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in affiliates |
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expenditures |
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amounts in millions |
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Liberty SiriusXM Group |
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Sirius XM Holdings |
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$ |
29,812 |
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716 |
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388 |
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30,030 |
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723 |
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350 |
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Live Nation |
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14,402 |
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294 |
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176 |
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10,589 |
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170 |
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223 |
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Corporate and other |
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1,862 |
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89 |
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— |
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2,051 |
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163 |
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— |
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46,076 |
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1,099 |
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564 |
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42,670 |
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1,056 |
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573 |
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Eliminate equity method affiliate |
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(14,402) |
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(294) |
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(176) |
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(10,589) |
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(170) |
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(223) |
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Total Liberty SiriusXM Group |
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31,674 |
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805 |
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388 |
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32,081 |
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886 |
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350 |
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Braves Group |
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Corporate and other |
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1,636 |
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110 |
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35 |
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1,571 |
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94 |
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81 |
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Total Braves Group |
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1,636 |
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110 |
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35 |
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1,571 |
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94 |
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81 |
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Formula One Group |
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Formula 1 |
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8,819 |
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— |
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17 |
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8,610 |
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— |
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11 |
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Corporate and other |
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2,845 |
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30 |
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— |
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2,581 |
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38 |
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10 |
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Total Formula One Group |
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11,664 |
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30 |
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17 |
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11,191 |
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38 |
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21 |
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Elimination (1) |
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(623) |
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— |
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— |
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(839) |
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— |
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— |
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Consolidated Liberty |
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$ |
44,351 |
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945 |
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440 |
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44,004 |
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1,018 |
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452 |
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| (1) |
As of December 31, 2021 and 2020, this amount includes the intergroup interests in the Braves Group held by the Formula One Group and the Liberty SiriusXM Group and the intergroup interest in the Formula One Group held by the Liberty SiriusXM Group, as discussed in note 2. The Braves Group intergroup interests attributable to the Formula One Group and the Liberty SiriusXM Group are presented as assets of the Formula One Group and Liberty SiriusXM Group, respectively, and are presented as liabilities of the Braves Group in the attributed financial statements. The Formula One Group intergroup interest attributable to the Liberty SiriusXM Group is presented as an asset of the Liberty SiriusXM Group and is presented as a liability of the Formula One Group in the attributed financial statements. The offsetting amounts between tracking stock groups are eliminated in consolidation. |
As of December 31, 2020, this amount was also comprised of the call spread between the Formula One Group and the Liberty SiriusXM Group with respect to the Live Nation shares that were reattributed to the Liberty SiriusXM Group. During the year ended December 31, 2021, the Liberty SiriusXM Group paid approximately $384 million to the Formula One Group to settle its obligation under the call spread.
The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) from continuing operations before income taxes:
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Years ended December 31, |
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2021 |
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2020 |
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2019 |
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amounts in millions |
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Adjusted OIBDA |
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$ |
3,325 |
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2,509 |
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2,931 |
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Litigation settlements and reserves (note 18) |
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— |
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16 |
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(25) |
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Stock-based compensation |
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(256) |
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(261) |
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(291) |
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Impairment, restructuring and acquisition costs, net of recoveries (notes 5 and 8) |
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(20) |
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(1,004) |
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(84) |
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Depreciation and amortization |
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(1,072) |
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(1,083) |
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(1,061) |
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Operating income (loss) |
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1,977 |
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177 |
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1,470 |
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Interest expense |
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(642) |
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(634) |
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(657) |
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Share of earnings (losses) of affiliates, net |
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(200) |
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(586) |
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6 |
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Realized and unrealized gains (losses) on financial instruments, net |
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(451) |
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(402) |
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(315) |
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Gains (losses) on dilution of investment in affiliate |
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152 |
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4 |
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7 |
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Other, net |
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(47) |
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6 |
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2 |
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Earnings (loss) from continuing operations before income taxes |
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$ |
789 |
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(1,435) |
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513 |
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Revenue by Geographic Area
Revenue by geographic area based on the country of domicile is as follows:
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Years ended December 31, |
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2021 |
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2020 |
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2019 |
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amounts in millions |
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United States |
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$ |
9,163 |
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8,121 |
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8,172 |
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United Kingdom |
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2,136 |
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1,145 |
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2,022 |
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Other |
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101 |
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97 |
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98 |
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$ |
11,400 |
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9,363 |
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10,292 |
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Long-lived Assets by Geographic Area
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December 31, |
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2021 |
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2020 |
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amounts in millions |
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United States |
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$ |
1,984 |
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2,221 |
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United Kingdom |
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26 |
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18 |
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$ |
2,010 |
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2,239 |
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