Quarterly report pursuant to Section 13 or 15(d)

Information About Liberty's Operating Segments

v3.5.0.2
Information About Liberty's Operating Segments
 9 Months Ended
Sep. 30, 2016
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments

(11)   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, 2016, 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 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,

 

 

 

2016

 

2015

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$
1,276

 
490

 
1,165

 
451

 

Corporate and other

 

 

 —

 
(8)

 

 —

 

 —

 

Total Liberty SiriusXM Group

 

 
1,276

 
482

 
1,165

 
451

 

Liberty Braves Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 
109

 
16

 
119

 
30

 

Total Liberty Braves Group

 

 
109

 
16

 
119

 
30

 

Liberty Media Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

 —

 
(13)

 

 —

 
(8)

 

Total Liberty Media Group

 

 

 —

 
(13)

 

 —

 
(8)

 

 

 

$
1,385

 
485

 
1,284

 
473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30,

 

 

 

2016

 

2015

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$
3,711

 
1,380

 
3,360

 
1,275

 

Corporate and other

 

 

 —

 
(9)

 

 —

 

 —

 

Total Liberty SiriusXM Group

 

 
3,711

 
1,371

 
3,360

 
1,275

 

Liberty Braves group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 
244

 
(8)

 
227

 
14

 

Total Liberty Braves group

 

 
244

 
(8)

 
227

 
14

 

Liberty Media group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

 —

 
(32)

 

 —

 
(25)

 

Total Liberty Media group

 

 

 —

 
(32)

 

 —

 
(25)

 

 

 

$
3,955

 
1,331

 
3,587

 
1,264

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

September 30, 2016

 

 

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

SIRIUS XM

 

$
27,432

 
165

 
132

 

Total Liberty SiriusXM Group

 

 
27,432

 
165

 
132

 

Liberty Braves Group

 

 

 

 

 

 

 

 

Corporate and other

 

 
1,369

 
56

 
185

 

Total Liberty Braves Group

 

 
1,369

 
56

 
185

 

Liberty Media Group

 

 

 

 

 

 

 

 

Corporate and other

 

 
2,947

 
935

 
1

 

Total Liberty Media Group

 

 
2,947

 
935

 
1

 

Elimination (1)

 

 
(185)

 

 —

 

 —

 

Consolidated Liberty

 

$
31,563

 
1,156

 
318

 

(1)

This is primarily the intergroup interest in the Liberty Braves Group held by the Liberty Media Group, as discussed in note 2. The intergroup interest attributable to the Liberty Media Group is presented as an asset and the intergroup interest attributable to the Liberty Braves Group is presented as a liability in the attributed financial statements and the offsetting amounts between tracking stock groups are eliminated in consolidation.

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,

 

 

    

2016

    

2015

    

2016

    

2015

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

 

$
485

 
473

 
1,331

 
1,264

 

Legal settlement, net (note 10)

 

 

 —

 

 —

 
511

 
(108)

 

Stock-based compensation

 

 
(41)

 
(56)

 
(109)

 
(147)

 

Depreciation and amortization

 

 
(92)

 
(96)

 
(272)

 
(272)

 

Interest expense

 

 
(98)

 
(84)

 
(272)

 
(244)

 

Share of earnings (losses) of affiliates, net

 

 
37

 
29

 
43

 
(8)

 

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

 

 
7

 
(200)

 
(33)

 
(188)

 

Other, net

 

 
5

 
4

 
17

 
12

 

Earnings (loss) before income taxes

 

$
303

 
70

 
1,216

 
309