º¬Ð߲ݴ«Ã½

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, 2014
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.
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, 2014, Liberty has identified the following consolidated subsidiaries as its reportable segments:
•
QVC - a 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), active lifestyle gear and clothing (Backcountry), fitness and health goods (Bodybuilding), celebration offerings from invitations to costumes (BuySeasons and Evite) 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 are the same as those described in the Company's summary of significant accounting policies in the Annual Report on Form 10-K for the year ended DecemberÌý31, 2013.
Performance Measures
Ìý
Three months ended June 30,
Ìý
2014
Ìý
2013
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
2,014

Ìý
439

Ìý
1,961

Ìý
434

E-commerce
481

Ìý
19

Ìý
439

Ìý
26

Corporate and other
—

Ìý
(6
)
Ìý
—

Ìý
(5
)
Total Interactive Group
2,495

Ìý
452

Ìý
2,400

Ìý
455

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor, Inc.
323

Ìý
129

Ìý
247

Ìý
113

Corporate and other
—

Ìý
(5
)
Ìý
—

Ìý
(3
)
Total Ventures Group
323

Ìý
124

Ìý
247

Ìý
110

Consolidated Liberty
$
2,818

Ìý
576

Ìý
2,647

Ìý
565



Ìý
Six months ended June 30,
Ìý
2014
Ìý
2013
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
Revenue
Ìý
Adjusted
OIBDA
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
4,000

Ìý
851

Ìý
3,935

Ìý
838

E-commerce
942

Ìý
42

Ìý
899

Ìý
65

Corporate and other
—

Ìý
(10
)
Ìý
—

Ìý
(11
)
Total Interactive Group
4,942

Ìý
883

Ìý
4,834

Ìý
892

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor, Inc.
604

Ìý
251

Ìý
477

Ìý
222

Corporate and other
—

Ìý
(8
)
Ìý
—

Ìý
(6
)
Total Ventures Group
604

Ìý
243

Ìý
477

Ìý
216

Consolidated Liberty
$
5,546

Ìý
1,126

Ìý
5,311

Ìý
1,108


Other Information
Ìý
JuneÌý30, 2014
Ìý
Total
assets
Ìý
Investments
in
affiliates
Ìý
Capital
expenditures
Ìý
amounts in millions
Interactive Group
Ìý
Ìý
Ìý
Ìý
Ìý
QVC
$
12,648

Ìý
50

Ìý
57

E-commerce
1,233

Ìý
—

Ìý
30

Corporate and other
465

Ìý
313

Ìý
—

Total Interactive Group
14,346

Ìý
363

Ìý
87

Ventures Group
Ìý
Ìý
Ìý
Ìý
Ìý
TripAdvisor
7,321

Ìý
—

Ìý
42

Corporate and other
3,214

Ìý
873

Ìý
—

Total Ventures Group
10,535

Ìý
873

Ìý
42

Inter-group eliminations
(159
)
Ìý
—

Ìý
—

Consolidated Liberty
$
24,722

Ìý
1,236

Ìý
129


The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) before income taxes:
Ìý
Three months ended
June 30,
Ìý
Six months ended
June 30,
Ìý
2014
Ìý
2013
Ìý
2014
Ìý
2013
Ìý
amounts in millions
Consolidated segment Adjusted OIBDA
$
576

Ìý
565

Ìý
1,126

Ìý
1,108

ÌýÌýStock-based compensation
(43
)
Ìý
(44
)
Ìý
(85
)
Ìý
(86
)
Impairment of intangible assets
(7
)
Ìý
—

Ìý
(7
)
Ìý
—

ÌýÌýDepreciation and amortization
(237
)
Ìý
(237
)
Ìý
(469
)
Ìý
(467
)
ÌýÌýInterest expense
(100
)
Ìý
(90
)
Ìý
(199
)
Ìý
(201
)
ÌýÌýShare of earnings (loss) of affiliates, net
4

Ìý
7

Ìý
2

Ìý
(4
)
ÌýÌýRealized and unrealized gains (losses) on financial instruments, net
(41
)
Ìý
9

Ìý
(66
)
Ìý
(64
)
ÌýÌýOther, net
3

Ìý
(17
)
Ìý
11

Ìý
(55
)
Earnings (loss) before income taxes
$
155

Ìý
193

Ìý
313

Ìý
231