Quarterly report pursuant to Section 13 or 15(d)

Segments and Geographic Information

v3.19.2
Segments and Geographic Information
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Segments and Geographic Information
Segments and Geographic Information
In accordance with FASB ASC Topic 280, Segment Reporting, we disaggregate our operations into two reportable segments: Sirius XM and Pandora. The change in segment reporting is due to the acquisition of Pandora. The financial results of these segments are utilized by the chief operating decision maker, who is our Chief Executive Officer, for evaluating segment performance and allocating resources. Our reportable segments have been determined based on our internal management structure. For additional information on our segments refer to Note 1.
Segment results include the revenues and cost of services which are directly attributable to each segment. There are no indirect revenues or costs incurred that are allocated to the segments. There are planned intersegment advertising campaigns which will be eliminated. We had less than $1 of intersegment advertising revenue during the three and six months ended June 30, 2019.
Segment revenue and gross profit were as follows during the periods presented:
 
For the Three Months Ended June 30, 2019
 
Sirius XM
 
Pandora
 
Total
Revenue
 
 
 
 
 
Subscriber revenue
$
1,402

 
$
135

 
$
1,537

Advertising revenue
52

 
306

 
358

Equipment revenue
41

 
—

 
41

Other revenue
41

 
—

 
41

Total revenue
1,536

 
441

 
1,977

Cost of services (a)
(594
)
 
(278
)
 
(872
)
Segment gross profit
$
942

 
$
163

 
$
1,105


The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:
 
Three Months Ended June 30, 2019
Segment Gross Profit
$
1,105

Subscriber acquisition costs
(104
)
Sales and marketing (a)
(213
)
Engineering, design and development (a)
(61
)
General and administrative (a)
(105
)
Depreciation and amortization
(119
)
Share-based payment expense
(57
)
Acquisition and other related costs
(7
)
Total other (expense) income
(100
)
Consolidated income before income taxes
$
339

(a)
Share-based payment expense of $10 related to cost of services, $19 related to sales and marketing, $13 related to engineering, design and development and $15 related to general and administrative has been excluded.
 
For the Six Months Ended June 30, 2019
 
Sirius XM
 
Pandora
 
Total
Revenue
 
 
 
 
 
Subscriber revenue
$
2,772

 
$
223

 
$
2,995

Advertising revenue
98

 
469

 
567

Equipment revenue
82

 
—

 
82

Other revenue
77

 
—

 
77

Total revenue
3,029

 
692

 
3,721

Cost of services (b)
(1,163
)
 
(448
)
 
(1,611
)
Segment gross profit
$
1,866

 
$
244

 
$
2,110


The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:
 
Six Months Ended June 30, 2019
Segment Gross Profit
$
2,110

Subscriber acquisition costs
(212
)
Sales and marketing (b)
(381
)
Engineering, design and development (b)
(106
)
General and administrative (b)
(224
)
Depreciation and amortization
(226
)
Share-based payment expense
(106
)
Acquisition and other related costs
(83
)
Total other (expense) income
(190
)
Consolidated income before income taxes
$
582

(b)
Share-based payment expense of $19 related to cost of services, $34 related to sales and marketing, $22 related to engineering, design and development and $31 related to general and administrative has been excluded.
A measure of segment assets is not currently provided to the Chief Executive Officer and has therefore not been provided.
As of June 30, 2019, long-lived assets were predominantly located in the United States. No individual foreign country represented a material portion of our consolidated revenue during the three and six months ended June 30, 2019.