Annual report pursuant to Section 13 and 15(d)

Information About Liberty's Operating Segments

v2.4.0.6
Information About Liberty's Operating Segments
 12 Months Ended
Dec. 31, 2011
Information About Liberty's Operating Segments  
Information About Liberty's Operating Segments
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 segment presentation for prior periods has been conformed to the current period segment presentation.
The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA and gross margin. In addition, the Company reviews nonfinancial measures such as subscriber growth and penetration.
The Company defines Adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses (excluding 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 year ended December 31, 2011, the Company has identified the following businesses as its reportable segments:
•
Starz, LLC—consolidated subsidiary that provides premium subscription video programming to United States multichannel video distributors, including cable operators, satellite television providers and telecommunications companies. Starz also develops, produces and acquires entertainment content and distributes this content to consumers in a wide variety of formats in the United States and throughout the world.
•
ANLBC—consolidated subsidiary that owns and operates the Atlanta Braves Major League Baseball franchise.
•
TruePosition, Inc.—consolidated subsidiary that develops and markets technology for locating wireless phones and other wireless devices enabling wireless carriers, application providers and other enterprises to provide E-911 services domestically and other location-based services to mobile users both domestically and worldwide.
The Company's reportable 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 policies.
Performance Measures
 
Years ended December 31,
 
2011
 
2010
 
2009
 
Revenue
 
Adjusted
OIBDA
 
Revenue
 
Adjusted
OIBDA
 
Revenue
 
Adjusted
OIBDA
 
amounts in millions
 
 
 
 
Starz, LLC
$
1,615

 
449

 
1,626

 
343

 
1,540

 
283

ANLBC
208

 
(6
)
 
203

 
6

 
206

 
8

TruePosition
1,138

 
634

 
143

 
(3
)
 
32

 
(77
)
Corporate and other
63

 
(17
)
 
78

 
(22
)
 
75

 
(15
)
Consolidated Liberty
$
3,024

 
1,060

 
2,050

 
324

 
1,853

 
199


Other Information
 
December 31, 2011
 
December 31, 2010
 
Total
assets
 
Investments
in affiliates
 
Capital
expenditures
 
Total
assets
 
Investments
in affiliates
 
Capital
expenditures
 
amounts in millions
 
 
 
 
 
 
Starz, LLC
$
2,630

 
—

 
8

 
$
1,708

 
$
—

 
$
9

ANLBC
545

 
31

 
1

 
577

 
29

 
2

TruePosition
113

 
—

 
3

 
496

 
—

 
4

Corporate and other
4,435

 
536

 
2

 
8,011

 
62

 
1

Consolidated Liberty
$
7,723

 
567

 
14

 
$
10,792

 
$
91

 
$
16



The following table provides a reconciliation of segment Adjusted OIBDA to earnings (loss) from continuing operations before income taxes:
 
Years ended December 31,
 
2011
 
2010
 
2009
 
 
 
 
Consolidated segment Adjusted OIBDA
$
1,060

 
324

 
199

Stock-based compensation
(32
)
 
(83
)
 
(81
)
Gain (loss) on legal settlement
(2
)
 
48

 
—

Depreciation and amortization
(69
)
 
(94
)
 
(109
)
Interest expense
(21
)
 
(65
)
 
(132
)
Dividend and interest income
79

 
88

 
117

Liberty interest income (expense)
—

 
3

 
16

Share of earnings (losses) of affiliates, net
49

 
(64
)
 
(44
)
Realized and unrealized gains (losses) on financial instruments, net
68

 
260

 
(34
)
Gains (losses) on dispositions, net
(10
)
 
36

 
242

Other, net
5

 
7

 
(4
)
Earnings (loss) from continuing operations before income taxes
$
1,127

 
460

 
170