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
6 Months Ended
Jun. 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 six months ended June 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 – the Sirius system and the XM system. Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand, 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 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  June 30,

 

 

 

2018

 

2017

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

1,432

 

542

 

1,348

 

519

 

Corporate and other

 

 

 —

 

(6)

 

 —

 

(3)

 

Total Liberty SiriusXM Group

 

 

1,432

 

536

 

1,348

 

516

 

Braves Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

182

 

63

 

176

 

27

 

Total Braves Group

 

 

182

 

63

 

176

 

27

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

585

 

134

 

616

 

164

 

Corporate and other

 

 

 —

 

(6)

 

 —

 

(9)

 

Total Formula One Group

 

 

585

 

128

 

616

 

155

 

Consolidated Liberty

 

$

2,199

 

727

 

2,140

 

698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30,

 

 

 

2018

 

2017

 

 

    

 

 

    

Adjusted

    

 

    

Adjusted

 

 

 

Revenue

 

OIBDA

 

Revenue

 

OIBDA

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

2,807

 

1,072

 

2,642

 

1,019

 

Corporate and other

 

 

 —

 

(11)

 

 —

 

(7)

 

Total Liberty SiriusXM Group

 

 

2,807

 

1,061

 

2,642

 

1,012

 

Braves Group

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

210

 

28

 

181

 

(2)

 

Total Braves Group

 

 

210

 

28

 

181

 

(2)

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

Formula 1

 

 

699

 

137

 

712

 

182

 

Corporate and other

 

 

 —

 

(10)

 

 —

 

(27)

 

Total Formula One Group

 

 

699

 

127

 

712

 

155

 

Consolidated Liberty

 

$

3,716

 

1,216

 

3,535

 

1,165

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2018

 

 

    

Total

    

Investments

    

Capital

 

 

 

assets

 

in affiliates

 

expenditures

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

SIRIUS XM

 

$

27,899

 

642

 

174

 

Corporate and other

 

 

615

 

 —

 

 —

 

Total Liberty SiriusXM Group

 

 

28,514

 

642

 

174

 

Braves Group

 

 

 

 

 

 

 

 

Corporate and other

 

 

1,939

 

97

 

14

 

Total Braves Group

 

 

1,939

 

97

 

14

 

Formula One Group

 

 

 

 

 

 

 

 

Formula 1

 

 

9,327

 

 —

 

 1

 

Corporate and other

 

 

2,262

 

920

 

 2

 

Total Formula One Group

 

 

11,589

 

920

 

 3

 

Elimination (1)

 

 

(235)

 

 —

 

 —

 

Consolidated Liberty

 

$

41,807

 

1,659

 

191

 


(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 

 

Six months ended

 

 

 

June 30,

 

June 30,

 

 

    

2018

    

2017

    

2018

    

2017

 

 

 

amounts in millions

 

Consolidated segment Adjusted OIBDA

 

$

727

 

698

 

1,216

 

1,165

 

Legal settlement (note 12)

 

 

(69)

 

 —

 

(69)

 

 —

 

Stock-based compensation

 

 

(53)

 

(53)

 

(99)

 

(97)

 

Depreciation and amortization

 

 

(231)

 

(223)

 

(447)

 

(387)

 

Operating income (loss)

 

 

374

 

422

 

601

 

681

 

Interest expense

 

 

(153)

 

(149)

 

(303)

 

(289)

 

Share of earnings (losses) of affiliates, net

 

 

22

 

16

 

14

 

12

 

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

 

 

58

 

(49)

 

211

 

(61)

 

Other, net

 

 

21

 

(4)

 

27

 

13

 

Earnings (loss) before income taxes

 

$

322

 

236

 

550

 

356