Quarterly report pursuant to Section 13 or 15(d)

Segments and Geographic Information

v3.20.1
Segments and Geographic Information
 3 Months Ended
Mar. 31, 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 months ended March 31, 2020 and 2019.
Segment revenue and gross profit were as follows during the periods presented:
 
For the Three Months Ended March 31, 2020
 
Sirius XM
 
Pandora
 
Total
Revenue
 
 
 
 
 
Subscriber revenue
$
1,457

 
$
128

 
$
1,585

Advertising revenue
44

 
241

 
285

Equipment revenue
41

 
—

 
41

Other revenue
41

 
—

 
41

Total revenue
1,583

 
369

 
1,952

Cost of services (a)
(593
)
 
(246
)
 
(839
)
Segment gross profit
$
990

 
$
123

 
$
1,113


The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:
 
For the Three Months Ended March 31, 2020
Segment Gross Profit
$
1,113

Subscriber acquisition costs
(99
)
Sales and marketing (a)
(208
)
Engineering, design and development (a)
(60
)
General and administrative (a)
(91
)
Depreciation and amortization
(132
)
Share-based payment expense
(55
)
Total other (expense) income
(95
)
Consolidated income before income taxes
$
373

(a)
Share-based payment expense of $11 related to cost of services, $17 related to sales and marketing, $11 related to engineering, design and development and $16 related to general and administrative has been excluded.
 
For the Three Months Ended March 31, 2019
 
Sirius XM
 
Pandora
 
Total
Revenue
 
 
 
 
 
Subscriber revenue
$
1,370

 
$
88

 
$
1,458

Advertising revenue
46

 
163

 
209

Equipment revenue
41

 
—

 
41

Other revenue
36

 
—

 
36

Total revenue
1,493

 
251

 
1,744

Cost of services (b)
(569
)
 
(170
)
 
(739
)
Segment gross profit
$
924

 
$
81

 
$
1,005


The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:
 
For the Three Months Ended March 31, 2019
Segment Gross Profit
$
1,005

Subscriber acquisition costs
(108
)
Sales and marketing (b)
(168
)
Engineering, design and development (b)
(45
)
General and administrative (b)
(119
)
Depreciation and amortization
(107
)
Share-based payment expense
(49
)
Acquisition and other related costs
(76
)
Total other (expense) income
(90
)
Consolidated income before income taxes
$
243

(b)
Share-based payment expense of $9 related to cost of services, $15 related to sales and marketing, $9 related to engineering, design and development and $16 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 March 31, 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 months ended March 31, 2020 and 2019.