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Quarterly report pursuant to Section 13 or 15(d)

Information º¬Ð߲ݴ«Ã½ Liberty's Operating Segments

v2.4.0.8
Information º¬Ð߲ݴ«Ã½ Liberty's Operating Segments
 6 Months Ended
Jun. 30, 2013
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 all 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 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 six months ended June 30, 2013, Liberty has identified the following consolidated subsidiaries 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 through its domestic and international websites and mobile applications.
•
TripAdvisor, Inc. - a consolidated subsidiary that is an online travel research company that empowers 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 E-commerce 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), celebration offerings from invitations to costumes (Celebrate Interactive Holdings LLC) and a drop-ship solutions company (CommerceHub).
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 in the annual report on Form 10-K.
Performance Measures
Ìý
Six months ended June 30,
Ìý
2013
Ìý
2012
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
3,935

Ìý
838

Ìý
3,906

Ìý
828

E-commerce
899

Ìý
65

Ìý
773

Ìý
57

Corporate and other
—

Ìý
(11
)
Ìý
—

Ìý
(11
)
Total Interactive Group
4,834

Ìý
892

Ìý
4,679

Ìý
874

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor, Inc.
477

Ìý
222

Ìý
—

Ìý
—

Corporate and other
—

Ìý
(6
)
Ìý
—

Ìý
(1
)
Total Ventures Group
477

Ìý
216

Ìý
—

Ìý
(1
)
Consolidated Liberty
$
5,311

Ìý
1,108

Ìý
4,679

Ìý
873


Ìý
Three months ended June 30,
Ìý
2013
Ìý
2012
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
1,961

Ìý
434

Ìý
1,974

Ìý
438

E-commerce
439

Ìý
26

Ìý
391

Ìý
23

Corporate and other
—

Ìý
(5
)
Ìý
—

Ìý
(6
)
Total Interactive Group
2,400

Ìý
455

Ìý
2,365

Ìý
455

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor, Inc.
247

Ìý
113

Ìý
—

Ìý
—

Corporate and other
—

Ìý
(3
)
Ìý
—

Ìý
—

Total Ventures Group
247

Ìý
110

Ìý
—

Ìý
—

Consolidated Liberty
$
2,647

Ìý
565

Ìý
2,365

Ìý
455


Other Information
Ìý
JuneÌý30, 2013
Ìý
Total
assets
Ìý
Investments
in
affiliates
Ìý
Capital
expenditures
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
12,674

Ìý
52

Ìý
75

E-commerce
1,464

Ìý
—

Ìý
36

Corporate and other
221

Ìý
270

Ìý
—

Total Interactive Group
14,359

Ìý
322

Ìý
111

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor
7,404

Ìý
—

Ìý
25

Corporate and other
2,673

Ìý
561

Ìý
—

Total Ventures Group
10,077

Ìý
561

Ìý
25

Inter-group eliminations
(151
)
Ìý
—

Ìý
—

Consolidated Liberty
$
24,285

Ìý
883

Ìý
136







The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:
Ìý
Three months ended
June 30, 2013
Ìý
Six months ended
June 30,
Ìý
2013
Ìý
2012
Ìý
2013
Ìý
2012
Ìý
amounts in millions
Consolidated segment Adjusted OIBDA
$
565

Ìý
455

Ìý
1,108

Ìý
873

ÌýÌýStock-based compensation
(44
)
Ìý
(18
)
Ìý
(86
)
Ìý
(35
)
ÌýÌýDepreciation and amortization
(237
)
Ìý
(147
)
Ìý
(467
)
Ìý
(290
)
ÌýÌýInterest expense
(90
)
Ìý
(107
)
Ìý
(201
)
Ìý
(213
)
ÌýÌýShare of earnings (loss) of affiliates, net
7

Ìý
35

Ìý
(4
)
Ìý
46

ÌýÌýRealized and unrealized gains (losses) on financial instruments, net
9

Ìý
(160
)
Ìý
(64
)
Ìý
(178
)
ÌýÌýGains (losses) on dispositions, net
(2
)
Ìý
288

Ìý
(2
)
Ìý
288

ÌýÌýOther, net
(15
)
Ìý
30

Ìý
(53
)
Ìý
33

Earnings (loss) before income taxes
$
193

Ìý
376

Ìý
231

Ìý
524