Quarterly report pursuant to Section 13 or 15(d)

Information About Liberty's Operating Segments

v3.10.0.1
Information About Liberty's Operating Segments
9 Months Ended
Sep. 30, 2018
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments

(13)   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 (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.

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, 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, 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, 2018, the Company has identified the following subsidiaries as its reportable segments:

·

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, and a larger set of music and other channels, SiriusXM On Demand featuring recent and archived shows, and SiriusXM Video, though its streaming service, available online and through applications for mobile devices, home devices and other consumer electronic equipment. SIRIUS XM also provides connected vehicle services.  SIRIUS XM’s connected vehicle services are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers.

·

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. The Company acquired a controlling interest in Formula 1 on January 23, 2017, at which time it began consolidating the results of the Formula 1 business.

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 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

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  September 30,

 

 

 

2018

 

2017

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

1,468

 

587

 

1,379

 

549

 

Corporate and other

 

 

 —

 

(4)

 

 —

 

(6)

 

Total Liberty SiriusXM Group

 

 

1,468

 

583

 

1,379

 

543

 

Braves Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

200

 

72

 

185

 

48

 

Total Braves Group

 

 

200

 

72

 

185

 

48

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

647

 

158

 

501

 

106

 

Corporate and other

 

 

 —

 

(2)

 

 —

 

(2)

 

Total Formula One Group

 

 

647

 

156

 

501

 

104

 

Consolidated Liberty

 

$

2,315

 

811

 

2,065

 

695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30,

 

 

 

2018

 

2017

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

4,275

 

1,659

 

4,021

 

1,568

 

Corporate and other

 

 

 —

 

(15)

 

 —

 

(13)

 

Total Liberty SiriusXM Group

 

 

4,275

 

1,644

 

4,021

 

1,555

 

Braves Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

410

 

100

 

366

 

46

 

Total Braves Group

 

 

410

 

100

 

366

 

46

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

1,346

 

295

 

1,213

 

288

 

Corporate and other

 

 

 —

 

(12)

 

 —

 

(29)

 

Total Formula One Group

 

 

1,346

 

283

 

1,213

 

259

 

Consolidated Liberty

 

$

6,031

 

2,027

 

5,600

 

1,860

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2018

 

 

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

27,900

 

661

 

239

 

Corporate and other

 

 

576

 

 —

 

 —

 

Total Liberty SiriusXM Group

 

 

28,476

 

661

 

239

 

Braves Group

 

 

 

 

 

 

 

 

Corporate and other

 

 

1,913

 

97

 

15

 

Total Braves Group

 

 

1,913

 

97

 

15

 

Formula One Group

 

 

 

 

 

 

 

 

Formula 1

 

 

9,177

 

 —

 

 9

 

Corporate and other

 

 

2,306

 

972

 

 2

 

Total Formula One Group

 

 

11,483

 

972

 

11

 

Elimination (1)

 

 

(248)

 

 —

 

 —

 

Consolidated Liberty

 

$

41,624

 

1,730

 

265

 


(1)

This is primarily the intergroup interest in the Braves Group held by the Formula One Group, as discussed in note 3. The intergroup interest attributable to the Formula One Group is presented as an asset and the intergroup interest attributable to the 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 Consolidated segment Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

 

    

2018

    

2017

    

2018

    

2017

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

 

$

811

 

695

 

2,027

 

1,860

 

Legal settlement (note 12)

 

 

 —

 

 —

 

(69)

 

 —

 

Stock-based compensation

 

 

(46)

 

(85)

 

(145)

 

(182)

 

Depreciation and amortization

 

 

(234)

 

(228)

 

(681)

 

(615)

 

Operating income (loss)

 

 

531

 

382

 

1,132

 

1,063

 

Interest expense

 

 

(150)

 

(159)

 

(453)

 

(448)

 

Share of earnings (losses) of affiliates, net

 

 

58

 

155

 

72

 

167

 

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

 

 

(31)

 

18

 

180

 

(43)

 

Other, net

 

 

10

 

(11)

 

37

 

 2

 

Earnings (loss) before income taxes

 

$

418

 

385

 

968

 

741