º¬Ð߲ݴ«Ã½

Annual report pursuant to Section 13 and 15(d)

Information º¬Ð߲ݴ«Ã½ Liberty's Operating Segments

v2.4.0.6
Information º¬Ð߲ݴ«Ã½ Liberty's Operating Segments
 12 Months Ended
Dec. 31, 2012
Information º¬Ð߲ݴ«Ã½ Liberty's Operating Segments Ìý
Information º¬Ð߲ݴ«Ã½ Liberty's Operating Segments
Information º¬Ð߲ݴ«Ã½ Liberty's Operating Segments
Liberty, through its ownership interests in subsidiaries and other companies, is primarily engaged in the video and on-line commerce industries. Liberty identifies its reportable segments as (A)Ìýthose consolidated subsidiaries that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets and (B)Ìýthose equity method affiliates whose share of earnings represent 10% or more of Liberty's annual pre-tax earnings. The segment presentation for prior periods has been conformed to the current period segment presentation.
Liberty evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per customer equivalent. In addition, Liberty reviews nonfinancial measures such as unique website visitors, conversion rates and active customers, as appropriate.
Liberty defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). Liberty 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. Liberty generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.
For the year ended DecemberÌý31, 2012, Liberty has identified the following consolidated subsidiaries and equity method affiliates as its reportable segments:
•
QVC—consolidated subsidiary that markets and sells a wide variety of consumer products in the United States and several foreign countries, primarily by means of its televised shopping programs and via the Internet and mobile transactions through its domestic and international websites.
•
TripAdvisor, Inc. - an online travel research company, empowering users to plan and maximize their travel experience.
Additionally, for presentation purposes Liberty is providing financial information of the E-commerce businesses on an aggregated basis. The consolidated businesses do not contribute significantly to the overall operations of Liberty on an individual basis; however, Liberty believes that on an aggregated basis they provide relevant information for users of these financial statements. While these businesses may not meet the aggregation criteria under relevant accounting literature, Liberty believes the information is relevant and helpful for a more complete understanding of the consolidated results.
•
E-commerce—the aggregation of certain consolidated subsidiaries that market and sell a wide variety of consumer products via the Internet. Categories of consumer products include perishable and personal gift offerings (Provide Commerce, Inc.), active lifestyle gear and clothing (Backcountry.com, Inc.), fitness and health goods (Bodybuilding.com, LLC) and celebration offerings from invitations to costumes (Celebrate Interactive Holdings, Inc.).
Liberty's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments that are also consolidated subsidiaries are the same as those described in the Company's summary of significant accounting policies.
Performance Measures
Ìý
Years ended
Ìý
December 31,
Ìý
2012
Ìý
2011
Ìý
2010
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
8,516

Ìý
1,828

Ìý
8,268

Ìý
1,733

Ìý
7,807

Ìý
1,671

E-commerce
1,502

Ìý
96

Ìý
1,348

Ìý
123

Ìý
1,125

Ìý
103

Corporate and other
—

Ìý
(27
)
Ìý
—

Ìý
(29
)
Ìý
—

Ìý
(25
)
Total Interactive Group
$
10,018

Ìý
1,897

Ìý
9,616

Ìý
1,827

Ìý
8,932

Ìý
1,749

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor
$
36

Ìý
8

Ìý
—

Ìý
—

Ìý
—

Ìý
—

Corporate and other
$
—

Ìý
(5
)
Ìý
—

Ìý
(4
)
Ìý
—

Ìý
(3
)
Total Ventures Group
$
36

Ìý
3

Ìý
—

Ìý
(4
)
Ìý
—

Ìý
(3
)
Consolidated Liberty
$
10,054

Ìý
1,900

Ìý
9,616

Ìý
1,823

Ìý
8,932

Ìý
1,746

Other Information
Ìý
DecemberÌý31,
2012
Ìý
December 31,
2011
Ìý
Total
assets
Ìý
Investments
in
affiliates
Ìý
Capital
expenditures
Ìý
Total
assets
Ìý
Investments
in
affiliates
Ìý
Capital
expenditures
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
13,414

Ìý
52

Ìý
246

Ìý
13,554

Ìý
—

Ìý
259

E-commerce
1,488

Ìý
9

Ìý
91

Ìý
1,486

Ìý
13

Ìý
53

Corporate and other
213

Ìý
243

Ìý
1

Ìý
384

Ìý
217

Ìý
—

Total Interactive Group
$
15,115

Ìý
304

Ìý
338

Ìý
15,424

Ìý
230

Ìý
312

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor
7,377

Ìý
—

Ìý
1

Ìý
—

Ìý
—

Ìý
—

Corporate and other
3,919

Ìý
547

Ìý
—

Ìý
2,070

Ìý
905

Ìý
—

Total Ventures Group
11,296

Ìý
547

Ìý
1

Ìý
2,070

Ìý
905

Ìý
—

Inter-group eliminations
$
(156
)
Ìý
—

Ìý
—

Ìý
(155
)
Ìý
—

Ìý
—

Consolidated Liberty
$
26,255

Ìý
851

Ìý
339

Ìý
17,339

Ìý
1,135

Ìý
312


The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:
Ìý
Years ended December 31,
Ìý
2012
Ìý
2011
Ìý
2010
Ìý
amounts in millions
Consolidated segment Adjusted OIBDA
$
1,900

Ìý
1,823

Ìý
1,746

ÌýÌýStock-based compensation
(91
)
Ìý
(49
)
Ìý
(67
)
ÌýÌýDepreciation and amortization
(609
)
Ìý
(641
)
Ìý
(571
)
ÌýÌýImpairment of intangible assets
(92
)
Ìý
—

Ìý
—

ÌýÌýInterest expense
(432
)
Ìý
(427
)
Ìý
(626
)
ÌýÌýShare of earnings (loss) of affiliates, net
85

Ìý
140

Ìý
112

ÌýÌýRealized and unrealized gains (losses) on financial instruments, net
(351
)
Ìý
84

Ìý
62

ÌýÌýGains (losses) on transactions, net
1,531

Ìý
—

Ìý
355

ÌýÌýOther, net
44

Ìý
9

Ìý
(47
)
Earnings (loss) from continuing operations before income taxes
$
1,985

Ìý
939

Ìý
964



Revenue by Geographic Area
Revenue by geographic area based on the location of customers is as follows:
Ìý
Years ended December 31,
Ìý
2012
Ìý
2011
Ìý
2010
Ìý
amounts in millions
United States
$
7,009

Ìý
6,670

Ìý
6,298

Japan
1,251

Ìý
1,133

Ìý
1,019

Germany
957

Ìý
1,068

Ìý
956

Other foreign countries
837

Ìý
745

Ìý
659

Ìý
$
10,054

Ìý
9,616

Ìý
8,932



Long-lived Assets by Geographic Area
Ìý
December 31,
Ìý
2012
Ìý
2011
Ìý
amounts in millions
United States
$
529

Ìý
481

Japan
280

Ìý
224

Germany
247

Ìý
233

Other foreign countries
179

Ìý
195

Ìý
$
1,235

Ìý
1,133