Quarterly report pursuant to Section 13 or 15(d)

Information About Liberty's Operating Segments

v3.7.0.1
Information About Liberty's Operating Segments
6 Months Ended
Jun. 30, 2017
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments

(12)   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 six months ended June 30, 2017, 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.  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, 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 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  June 30,

 

 

 

2017

 

2016

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

1,348

 

519

 

1,235

 

451

 

Corporate and other

 

 

 —

 

(3)

 

 —

 

(1)

 

Total Liberty SiriusXM Group

 

 

1,348

 

516

 

1,235

 

450

 

Braves Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

176

 

27

 

131

 

12

 

Total Braves Group

 

 

176

 

27

 

131

 

12

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

616

 

164

 

NA

 

NA

 

Corporate and other

 

 

 —

 

(9)

 

 —

 

(7)

 

Total Formula One Group

 

 

616

 

155

 

 —

 

(7)

 

Consolidated Liberty

 

$

2,140

 

698

 

1,366

 

455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30,

 

 

 

2017

 

2016

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

2,642

 

1,019

 

2,435

 

890

 

Corporate and other

 

 

 —

 

(7)

 

 —

 

(1)

 

Total Liberty SiriusXM Group

 

 

2,642

 

1,012

 

2,435

 

889

 

Braves Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

181

 

(2)

 

135

 

(24)

 

Total Braves Group

 

 

181

 

(2)

 

135

 

(24)

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

712

 

182

 

NA

 

NA

 

Corporate and other

 

 

 —

 

(27)

 

 —

 

(19)

 

Total Formula One Group

 

 

712

 

155

 

 —

 

(19)

 

Consolidated Liberty

 

$

3,535

 

1,165

 

2,570

 

846

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2017

 

 

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

27,484

 

610

 

119

 

Corporate and other

 

 

159

 

 —

 

 —

 

Total Liberty SiriusXM Group

 

 

27,643

 

610

 

119

 

Braves Group

 

 

 

 

 

 

 

 

Corporate and other

 

 

1,734

 

47

 

145

 

Total Braves Group

 

 

1,734

 

47

 

145

 

Formula One Group

 

 

 

 

 

 

 

 

Formula 1

 

 

9,535

 

 —

 

 2

 

Corporate and other

 

 

2,719

 

919

 

 —

 

Total Formula One Group

 

 

12,254

 

919

 

 2

 

Elimination (1)

 

 

(247)

 

 —

 

 —

 

Consolidated Liberty

 

$

41,384

 

1,576

 

266

 


(1)

This is primarily the intergroup interest in the Braves Group held by the Formula One Group, as discussed in note 2. 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 segment Adjusted OIBDA to Operating income (loss) and Earnings (loss) from continuing operations before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Six months ended

 

 

 

June 30,

 

June 30,

 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

 

$

698

 

455

 

1,165

 

846

 

Legal settlement, net (note 11)

 

 

 —

 

 —

 

 —

 

511

 

Stock-based compensation

 

 

(53)

 

(34)

 

(97)

 

(68)

 

Depreciation and amortization

 

 

(223)

 

(93)

 

(387)

 

(180)

 

Operating income (loss)

 

 

422

 

328

 

681

 

1,109

 

Interest expense

 

 

(149)

 

(90)

 

(289)

 

(174)

 

Share of earnings (losses) of affiliates, net

 

 

16

 

18

 

12

 

 6

 

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

 

 

(49)

 

(32)

 

(61)

 

(40)

 

Other, net

 

 

(4)

 

 5

 

13

 

12

 

Earnings (loss) before income taxes

 

$

236

 

229

 

356

 

913