Quarterly report pursuant to Section 13 or 15(d)

Information About Liberty's Operating Segments

v3.24.3
Information About Liberty's Operating Segments
9 Months Ended
Sep. 30, 2024
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 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 represent 10% or more of the Company's annual pre-tax earnings.

Liberty’s chief operating decision maker evaluates performance and makes decisions about allocating resources to the Company’s reportable 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 the nine months ended September 30, 2024, the Company identified Formula 1 as a reportable segment. 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. 

As of December 31, 2023, Live Nation met the Company’s reportable segment threshold for equity method affiliates. See note 7 for segment disclosures related to Live Nation.

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 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

The following table disaggregates revenue by segment and by source:

Three months ended

Nine months ended

September 30,

September 30,

    

2024

    

2023

    

2024

    

2023

 

amounts in millions

Formula One Group

Formula 1:

Primary

$

758

790

1,960

1,722

Other

103

97

325

270

Corporate and other

70

255

Intergroup elimination

(20)

(54)

Total Formula One Group

911

887

2,486

1,992

Braves Group

 

 

 

 

Corporate and other:

 

 

 

 

Baseball

 

NA

 

46

 

NA

 

318

Mixed-Use Development

 

NA

 

3

 

NA

 

32

Total Braves Group

NA

49

NA

350

Consolidated Liberty

$

911

936

 

2,486

 

2,342

Our subsidiaries’ customers generally pay for services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our unaudited condensed consolidated statement of operations as the services are provided. The opening and closing balances for our deferred revenue related to Formula 1 and other subsidiaries for the nine months ended September 30, 2024 were approximately $247 million and $756 million, respectively. The primary cause for the increase related to the receipt of cash from our customers in advance of satisfying our performance obligations.

Significant portions of the transaction prices for Formula 1 and other subsidiaries are related to undelivered performance obligations that are under contractual arrangements that extend beyond one year. The Company anticipates recognizing revenue from the delivery of such performance obligations of approximately $673 million for the remainder of 2024, $2,593 million in 2025, $2,130 million in 2026, $5,880 million in 2027 through 2031, and $1,870 million thereafter. We have not included any amounts in the undelivered performance obligations amounts for those performance obligations that relate to a contract with an original expected duration of one year or less.  

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, acquisition 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 and 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.

Adjusted OIBDA is summarized as follows:

Three months ended

Nine months ended

September 30,

September 30,

    

2024

    

2023

    

2024

    

2023

 

amounts in millions

Formula One Group

 

 

Formula 1

$

221

 

215

 

589

 

487

Corporate and other

(14)

 

(18)

(15)

(44)

Total Formula One Group

207

 

197

574

443

Liberty Live Group

Corporate and other

 

(2)

 

(4)

 

(4)

 

(4)

Total Liberty Live Group

 

(2)

 

(4)

 

(4)

 

(4)

Braves Group

Corporate and other

 

NA

 

3

 

NA

 

14

Total Braves Group

 

NA

 

3

 

NA

 

14

Consolidated Liberty

$

205

 

196

 

570

 

453

Other Information

September 30, 2024

    

Total

    

Investments

 

assets

in affiliates

amounts in millions

Formula One Group

Formula 1

$

9,324

1

Corporate and other

 

2,798

 

34

Intergroup elimination

(142)

Total Formula One Group

11,980

35

Liberty Live Group

Corporate and other

1,255

448

Total Liberty Live Group

1,255

448

Elimination

(27)

Consolidated Liberty

$

13,208

 

483

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

Three months ended

Nine months ended

September 30,

September 30,

    

2024

    

2023

    

2024

    

2023

 

amounts in millions

Adjusted OIBDA

$

205

 

196

 

570

 

453

Impairment and acquisition costs

(3)

(23)

(1)

Stock-based compensation

 

(7)

 

(6)

 

(27)

 

(22)

Depreciation and amortization

 

(88)

 

(89)

 

(263)

 

(291)

Operating income (loss)

107

101

257

139

Interest expense

 

(62)

 

(62)

 

(184)

 

(188)

Share of earnings (losses) of affiliates, net

 

116

 

143

 

175

 

228

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

 

(55)

 

39

 

11

 

(45)

Unrealized gains (losses) on intergroup interests

 

(4)

 

 

(68)

Other, net

 

29

 

(19)

 

76

 

12

Earnings (loss) from continuing operations before income taxes

$

135

 

198

 

335

 

78