Quarterly report pursuant to Section 13 or 15(d)

Segments and Geographic Information

v3.20.2
Segments and Geographic Information
 6 Months Ended
Jun. 30, 2020
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 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. We report our segment information based on the "management" approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments. 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 both the three and six months ended June 30, 2020 and 2019.
Segment revenue and gross profit were as follows during the periods presented:
For the Three Months Ended June 30, 2020
Sirius XM Pandora Total
Revenue
Subscriber revenue $ 1,453    $ 125    $ 1,578   
Advertising revenue 25    211    236   
Equipment revenue 25    —    25   
Other revenue 35    —    35   
Total revenue 1,538    336    1,874   
Cost of services (a)
(593)   (263)   (856)  
Segment gross profit $ 945    $ 73    $ 1,018   
The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:
For the Three Months Ended June 30, 2020
Segment Gross Profit $ 1,018   
Subscriber acquisition costs (48)  
Sales and marketing (a)
(201)  
Engineering, design and development (a)
(52)  
General and administrative (a)
(102)  
Depreciation and amortization (124)  
Share-based payment expense (52)  
Acquisition and restructuring costs (24)  
Total other (expense) income (98)  
Consolidated income before income taxes $ 317   
(a)  Share-based payment expense of $10 related to cost of services, $16 related to sales and marketing, $9 related to engineering, design and development and $17 related to general and administrative has been excluded.
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 (b)
(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:
For the Three Months Ended June 30, 2019
Segment Gross Profit $ 1,105   
Subscriber acquisition costs (104)  
Sales and marketing (b)
(213)  
Engineering, design and development (b)
(61)  
General and administrative (b)
(105)  
Depreciation and amortization (119)  
Share-based payment expense (57)  
Acquisition and restructuring costs (7)  
Total other (expense) income (100)  
Consolidated income before income taxes $ 339   
(b)  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, 2020
Sirius XM Pandora Total
Revenue
Subscriber revenue $ 2,910    $ 253    $ 3,163   
Advertising revenue 69    452    521   
Equipment revenue 66    —    66   
Other revenue 76    —    76   
Total revenue 3,121    705    3,826   
Cost of services (c)
(1,186)   (509)   (1,695)  
Segment gross profit $ 1,935    $ 196    $ 2,131   
The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:
For the Six Months Ended June 30, 2020
Segment Gross Profit $ 2,131   
Subscriber acquisition costs (147)  
Sales and marketing (c)
(409)  
Engineering, design and development (c)
(112)  
General and administrative (c)
(193)  
Depreciation and amortization (256)  
Share-based payment expense (107)  
Acquisition and restructuring costs (24)  
Total other (expense) income (193)  
Consolidated income before income taxes $ 690   
(c)  Share-based payment expense of $21 related to cost of services, $33 related to sales and marketing, $20 related to engineering, design and development and $33 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 (d)
(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:
For the Six Months Ended June 30, 2019
Segment Gross Profit $ 2,110   
Subscriber acquisition costs (212)  
Sales and marketing (d)
(381)  
Engineering, design and development (d)
(106)  
General and administrative (d)
(224)  
Depreciation and amortization (226)  
Share-based payment expense (106)  
Acquisition and restructuring costs (83)  
Total other (expense) income (190)  
Consolidated income before income taxes $ 582   
(d)  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, 2020, 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, 2020 and 2019.