Liberty Media Corporation ("Liberty Media" or “Liberty”)
(NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, LLYVA, LLYVK) today
reported second quarter 2023 results. Headlines include(1):
- On August 3rd completed reclassification of tracking stocks to
create Liberty Live Group tracking stock
- Attributed to Liberty SiriusXM Group
- SiriusXM reported second quarter 2023 operating and financial
results
- Second quarter 2023 revenue of $2.25 billion
- Net income of $310 million, up 6% year-over-year; diluted EPS
of $0.08
- Adjusted EBITDA(2) of $702 million; up 3% year-over-year
- Free cash flow(2) of $323 million
- SiriusXM increased full-year free cash flow guidance on August
1st
- Announced fall preview of next gen SiriusXM experience
- Liberty Media’s ownership of SiriusXM was 83.4% as of July
28th
- Received $71 million proceeds to settle intergroup interest in
Formula One Group
- Received 1.8 million shares of Atlanta Braves Holdings common
stock to settle intergroup interest in Braves Group; shares will be
exchanged with one or more third party lenders and proceeds will be
used to reduce debt at Liberty SiriusXM Group
- Attributed to Formula One Group
- Announced 24-race calendar for 2024 with increased geographic
efficiency in support of F1’s sustainability objectives
- Extended agreements for Austrian Grand Prix until 2030 and
Hungarian Grand Prix until 2032
- Announced extension of Heineken as Global Partner under
multi-year deal
- Formula One Group shareholders received distribution of 6.8
million shares of Atlanta Braves Holdings common stock on July 19th
to settle intergroup interest in Braves Group
- Paid $71 million in exchange for the cancellation of 1.1
million notional FWONA shares underlying intergroup interest held
at Liberty SiriusXM Group
- Attributed to former Braves Group
- Completed split-off of Braves and associated mixed-use
development into separate public company Atlanta Braves Holdings on
July 18th
“We were pleased to complete the reclassification of the Liberty
Media tracking stocks which begin trading today, including our
newly created Liberty Live Group. This action further simplifies
our tracking stock structure and provides greater investor choice,
while preserving Liberty’s optionality and flexibility,” said Greg
Maffei, Liberty Media President and CEO. “At Formula 1, the quality
of the fan experience at Grand Prix weekends continues to improve
and is helping drive sellout crowds at many races. We saw the
resilience of SiriusXM’s business through improved operating and
financial results in the second quarter. Live Nation had yet
another record quarter boosted by continued tailwinds in live
events and strategic initiatives capitalizing on international
growth.”
Corporate Updates
On July 18, 2023, Liberty Media completed the split-off of the
Braves and its associated mixed-use development (the “Split-Off”)
into the separate public company Atlanta Braves Holdings, Inc.
(“Atlanta Braves Holdings”). The Braves Group was a tracking stock
of Liberty Media during the second quarter of 2023 and therefore
its results are included in Liberty’s consolidated results for the
second quarter. For discussion of the Braves results for the second
quarter of 2023, please refer to the Atlanta Braves Holdings second
quarter 2023 earnings press release which can be found on its
website at
https://www.bravesholdings.com/investors/financial-information/financial-results.
On August 3, 2023, Liberty Media completed the reclassification
of its existing common stock to create the Liberty Live common
stock (the “Reclassification”). Following the Reclassification,
Liberty SiriusXM Group is comprised of Liberty Media’s interest in
SiriusXM, Formula One Group is comprised of Liberty Media’s
ownership of F1 and other minority investments, and Liberty Live
Group is comprised of Liberty Media’s interest in Live Nation and
other minority investments. The Reclassification was completed
after the second quarter of 2023 and therefore results of Liberty
Live Group are not presented for purposes of this presentation,
except for certain cases where assets and liabilities are presented
as of June 30, 2023 adjusted for the Split-Off and the
Reclassification for informational purposes only.
In connection with the Split-Off, Liberty Media settled all
intergroup interests. The Braves Group intergroup interest held at
Liberty SiriusXM Group was settled by attributing 1.8 million
Atlanta Braves Holdings Series C common stock to Liberty SiriusXM
Group. Liberty SiriusXM Group intends to reduce debt by exchanging
the shares with one or more third party lenders within one year of
the Split-Off. The Braves Group intergroup interest held at Formula
One Group was settled by distributing 6.8 million shares of Atlanta
Braves Holdings Series C common stock pro rata to holders of
Liberty Formula One common stock. On July 12, 2023, Formula One
Group paid $71 million to Liberty SiriusXM Group to settle the 1.1
million share intergroup interest in Formula One Group attributed
to Liberty SiriusXM Group. During the second quarter of 2023, these
intergroup interests had not yet been settled and are therefore
reflected in the results in this presentation.
Discussion of Results
Unless otherwise noted, the following discussion compares
financial information for the three months ended June 30, 2023 to
the same period in 2022.
LIBERTY SIRIUSXM GROUP – The following table provides the
financial results attributed to Liberty SiriusXM Group for the
second quarter of 2023. In the second quarter, $12 million of
corporate level selling, general and administrative expense
(including stock-based compensation expense) was allocated to
Liberty SiriusXM Group.
2Q22
2Q23
% Change
amounts in millions
Liberty SiriusXM Group
Revenue
SiriusXM
$
2,254
$
2,250
—
%
Total Liberty SiriusXM Group
$
2,254
$
2,250
—
%
Operating Income (Loss)
SiriusXM
479
464
(3
)%
Corporate and other
(7
)
(12
)
(71
)%
Total Liberty SiriusXM Group
$
472
$
452
(4
)%
Adjusted OIBDA (Loss)
SiriusXM
679
702
3
%
Corporate and other
(4
)
(8
)
(100
)%
Total Liberty SiriusXM Group
$
675
$
694
3
%
SiriusXM is a separate publicly traded company and additional
information about SiriusXM can be obtained through its website and
filings with the Securities and Exchange Commission. SiriusXM
reported its stand-alone second quarter results on August 1, 2023.
For additional detail on SiriusXM’s financial results for the
second quarter, please see SiriusXM’s earnings release posted to
its Investor Relations website. For presentation purposes on page
one of this release, we include the results of SiriusXM, as
reported by SiriusXM, without regard to the purchase accounting
adjustments applied by us for purposes of our financial statements.
Liberty Media believes the presentation of financial results as
reported by SiriusXM is useful to investors as the comparability of
those results is best understood in the context of SiriusXM's
historical financial presentation.
The businesses and assets attributed to Liberty SiriusXM Group
during the second quarter of 2023 consisted primarily of Liberty
Media’s interests in SiriusXM, which includes its subsidiary
Pandora, and an investment in Live Nation, and as of August 4,
2023, consist primarily of Liberty Media’s interests in SiriusXM,
which includes its subsidiary Pandora.
FORMULA ONE GROUP – The following table provides the
financial results attributed to Formula One Group for the second
quarter of 2023. In the second quarter, Formula One Group incurred
$17 million of corporate level selling, general and administrative
expense (including stock-based compensation expense).
“Formula 1 is capitalizing on our growth momentum and our fans
are engaging with the sport across traditional, digital and social
media platforms. We congratulate Red Bull on their record-breaking
performance season-to-date, and are thrilled to see the gaps
closing across the rest of the grid to produce exciting rivalries
on track,” said Stefano Domenicali, Formula 1 President and CEO.
“Next year we will host 24 races around the globe, with
back-to-back races in closer proximity which will benefit the
efficiency of operations for both F1 and our teams.”
2Q22
2Q23
amounts in millions
Formula One Group
Revenue
Formula 1
$
744
$
724
Total Formula One Group
$
744
$
724
Operating Income (Loss)
Formula 1
$
65
$
72
Corporate and other
(16
)
(20
)
Total Formula One Group
$
49
$
52
Adjusted OIBDA (Loss)
Formula 1
$
154
$
155
Corporate and other
(8
)
(14
)
Total Formula One Group
$
146
$
141
The following table provides the operating results of Formula 1
(“F1”).
F1 Operating Results
2Q22
2Q23
% Change
amounts in millions
Primary Formula 1 revenue
$
628
$
618
(2
)%
Other Formula 1 revenue
116
106
(9
)%
Total Formula 1 revenue
$
744
$
724
(3
)%
Operating expenses (excluding stock-based
compensation):
Team payments
(368
)
(344
)
7
%
Other cost of Formula 1 revenue
(166
)
(175
)
(5
)%
Cost of Formula 1 revenue
$
(534
)
$
(519
)
3
%
Selling, general and administrative
expenses
(56
)
(50
)
11
%
Adjusted OIBDA
$
154
$
155
1
%
Stock-based compensation
(1
)
(1
)
—
%
Depreciation and Amortization(a)
(88
)
(82
)
7
%
Operating income (loss)
$
65
$
72
11
%
Number of races in period
7
6
a)
Includes $81 million and $74 million of
amortization related to purchase accounting as of June 30, 2022 and
June 30, 2023, respectively, that is excluded from calculations for
purposes of team payments.
Primary F1 revenue represents the majority of F1’s revenue and
is derived from (i) race promotion revenue, (ii) media rights fees
and (iii) sponsorship fees.
There were six races held in the second quarter of 2023,
compared to seven races held in the second quarter of 2022. The
Emilia-Romagna (“Imola”) Grand Prix originally scheduled for May
21, 2023 was cancelled following severe flooding in the region and
is not expected to be rescheduled or replaced in 2023. There are
now 22 events scheduled on the 2023 race calendar.
Primary F1 revenue decreased in the second quarter with growth
across race promotion and sponsorship offset by a decline in media
rights revenue. Despite one less race held in the current period,
race promotion revenue grew due to contractual increases in fees
and sponsorship revenue increased due to recognition of revenue
from new sponsors and growth in revenue from existing sponsors.
Media rights revenue decreased due to the impact of lower
proportionate recognition of season-based income (6/22 races took
place took place in the second quarter of 2023 compared to 7/22 in
the second quarter of 2022), partially offset by continued growth
in F1 TV subscription revenue and increased fees under new and
renewed contractual agreements. Other F1 revenue decreased in the
second quarter primarily due to lower freight income driven by the
easing of freight cost inflation on billing rates and lower
hospitality revenue due to one less race held in the current
period, partially offset by increased licensing income and higher
revenue related to Formula 2 / Formula 3 car chassis sales.
Operating income increased and adjusted OIBDA(2) was relatively
flat in the second quarter despite one less race taking place. Team
payments were lower compared to the prior year due to the pro rata
recognition of payments across the race season with one less race
held, partially offset by an expectation of increased team payments
for the full year. Other cost of F1 revenue is largely variable in
nature and is mostly derived from servicing both Primary and Other
F1 revenue opportunities. These costs increased as significantly
lower freight costs were offset by increased hospitality costs
associated with servicing higher Paddock Club attendance and cost
inflation and higher commissions and partner servicing costs
associated with growth in Primary F1 revenue streams. Other cost of
F1 revenue in the current period also includes hospitality, travel
and other costs related to the Imola event that had largely been
incurred prior to the event’s late cancellation. Selling, general
and administrative expense decreased in the second quarter due to
lower personnel and legal costs and foreign exchange favorability,
partially offset by higher marketing, property and IT costs. There
were $7 million of costs associated with the planning of the Las
Vegas Grand Prix included in selling, general and administrative
expense in the second quarter of 2023.
The businesses and assets attributed to Formula One Group during
the second quarter of 2023 consisted of Liberty Media’s subsidiary
F1, other minority investments and an intergroup interest in Braves
Group, and as of August 4, 2023, consist primarily of Liberty
Media’s subsidiary F1 and other minority investments.
BRAVES GROUP - Liberty Media completed the Split-Off of
the Braves and its associated mixed-use development into the
separate public company Atlanta Braves Holdings (NASDAQ: BATRA,
BATRK) on July 18, 2023. For discussion of the Braves results for
the second quarter of 2023, please refer to the Atlanta Braves
Holdings second quarter 2023 earnings press release which can be
found on its website at
https://www.bravesholdings.com/investors/financial-information/financial-results.
Share Repurchases
There were no repurchases of Liberty Media’s common stock from
May 1, 2023 through July 31, 2023. The total remaining repurchase
authorization for Liberty Media as of August 1, 2023 is $1.1
billion and can be applied to repurchases of common shares of any
of the Liberty Media tracking stocks.
FOOTNOTES
- Liberty Media will discuss these headlines and other matters on
Liberty Media's earnings conference call that will begin at 10:00
a.m. (E.T.) on August 4, 2023. For information regarding how to
access the call, please see “Important Notice” later in this
document.
- For definitions of Adjusted OIBDA (as defined by Liberty Media)
and adjusted EBITDA and free cash flow (as defined by SiriusXM) and
applicable reconciliations see the accompanying schedules.
NOTES
The following financial information with respect to Liberty
Media's equity affiliates, available for sale securities, cash and
debt is intended to supplement Liberty Media's condensed
consolidated balance sheet and statement of operations to be
included in its Form 10-Q for the period ended June 30, 2023. For
purposes of this presentation, financial information with respect
to Liberty Media’s equity affiliates, available for sale
securities, cash and debt is also shown adjusted for the Split-Off
and the Reclassification.
On August 3, 2023, in connection with the Reclassification,
Liberty Media’s Live Nation investment previously attributed to
Liberty SiriusXM Group and certain private and public assets
previously attributed to Formula One Group were attributed to
Liberty Live Group. Approximately $100 million of cash from Formula
One Group was contributed to Liberty Live Group in connection with
the Reclassification, of which approximately $33 million came from
the partial liquidation of monetizable public holdings previously
held at Formula One Group. Additionally, all intergroup interests
were settled in connection with the Split-Off.
Additional information on the assets attributed to each tracker
adjusted for the Split-Off and the Reclassification can be found at
https://www.libertymedia.com/about/asset-list.
Fair Value of Corporate Public
Holdings
Adjusted for
Split-Off and
Reclassification
(amounts in millions)
3/31/2023
6/30/2023
6/30/2023
Liberty SiriusXM Group
Live Nation Investment(a)
4,875
6,345
N/A
Total Liberty SiriusXM Group
$
4,875
$
6,345
N/A
Formula One Group
Other Monetizable Public Holdings(b)
172
148
11
Total Formula One Group
$
172
$
148
$
11
Braves Group
N/A
N/A
N/A
Liberty Live Group
Live Nation Investment(a)
N/A
N/A
6,345
Other Monetizable Public Holdings(b)
N/A
N/A
104
Total Liberty Live Group
N/A
N/A
6,449
Total Liberty Media
$
5,047
$
6,493
$
6,460
a)
Represents the fair value of the equity
investment in Live Nation. In accordance with GAAP, Liberty Media
accounts for its investment in the equity of Live Nation using the
equity method of accounting and includes it in its condensed
consolidated balance sheet at $157 million and $243 million as of
March 31, 2023 and June 30, 2023, respectively. In connection with
the Reclassification, the equity investment in Live Nation
previously held at Liberty SiriusXM Group was attributed to Liberty
Live Group.
b)
Represents the carrying value of other
public holdings that are accounted for at fair value. Excludes
intergroup interests. Includes exchange-traded funds previously
held at Formula One Group that were attributed to Liberty Live
Group in connection with the Reclassification.
Cash and Debt
The following presentation is provided to separately identify
cash and debt information.
Adjusted for
Split-Off and
Reclassification
(amounts in millions)
3/31/2023
6/30/2023
6/30/2023
Cash and Cash Equivalents Attributable
to:
Liberty SiriusXM Group(a)
$
430
$
311
$
382
Formula One Group(b)
1,584
1,489
1,351
Braves Group(c)
215
131
N/A
Liberty Live Group(d)
N/A
N/A
100
Total Consolidated Cash and Cash
Equivalents (GAAP)
$
2,229
$
1,931
$
1,833
Debt:
SiriusXM senior notes(e)
$
8,750
$
8,750
$
8,750
Pandora convertible senior notes(f)
118
20
20
1.375% cash convertible notes due
2023(g)
199
199
199
3.75% convertible notes due 2028(g)
575
575
575
2.125% SiriusXM exchangeable senior
debentures due 2048(g)
275
—
—
2.75% SiriusXM exchangeable senior
debentures due 2049(g)
586
586
586
SiriusXM margin loan
875
875
875
Other subsidiary debt(h)
710
723
723
0.5% Live Nation exchangeable senior
debentures due 2050(g)
920
920
N/A
Live Nation margin loan
—
—
N/A
Total Attributed Liberty SiriusXM Group
Debt
$
13,008
$
12,648
$
11,728
Unamortized discount, fair market value
adjustment and deferred loan costs
(108
)
82
(18
)
Total Attributed Liberty SiriusXM Group
Debt (GAAP)
$
12,900
$
12,730
$
11,710
2.25% convertible notes due 2027(g)
475
475
475
Formula 1 term loan and revolving credit
facility
2,420
2,416
2,416
Other corporate level debt
63
61
61
Total Attributed Formula One Group
Debt
$
2,958
$
2,952
$
2,952
Fair market value adjustment
—
(2
)
(2
)
Total Attributed Formula One Group Debt
(GAAP)
$
2,958
$
2,950
$
2,950
Formula 1 leverage(i)
2.2x
2.2x
2.2x
Atlanta Braves debt
542
543
N/A
Total Attributed Braves Group
Debt
$
542
$
543
N/A
Deferred loan costs
(4
)
(4
)
N/A
Total Attributed Braves Group Debt
(GAAP)
$
538
$
539
N/A
0.5% Live Nation exchangeable senior
debentures due 2050(g)
N/A
N/A
920
Live Nation margin loan
N/A
N/A
—
Total Attributed Liberty Live Group
Debt
N/A
N/A
$
920
Unamortized discount, fair market value
adjustment and deferred loan costs
N/A
N/A
100
Total Attributed Liberty Live Group
Debt (GAAP)
N/A
N/A
$
1,020
Total Liberty Media Corporation Debt
(GAAP)
$
16,396
$
16,219
$
15,680
a)
Includes $53 million and $51 million of
cash held at SiriusXM as of March 31, 2023 and June 30, 2023,
respectively. Cash adjusted for Split-Off and Reclassification
reflects $71 million payment from Formula One Group to Liberty
SiriusXM Group to settle intergroup interest.
b)
Includes $1,043 million and $1,055 million
of cash held at F1 as of March 31, 2023 and June 30, 2023,
respectively. Cash adjusted for Split-Off and Reclassification
reflects $71 million payment from Formula One Group to Liberty
SiriusXM Group to settle intergroup interest and $67 million of
cash on hand contributed to Liberty Live Group.
c)
Excludes restricted cash held in reserves
pursuant to the terms of various financial obligations of $30
million and $52 million as of March 31, 2023 and June 30, 2023,
respectively.
d)
In connection with the Reclassification
Liberty Live Group was capitalized with $100 million of cash from
Formula One Group, of which approximately $33 million came from the
partial liquidation of monetizable public holdings previously held
at Formula One Group.
e)
Outstanding principal amount of Senior
Notes or Term Loan with no reduction for the net unamortized
discount.
f)
During the three months ended June 30,
2023, certain investors exercised their right to require a Special
Repurchase, as defined in the indenture governing the Pandora
convertible senior notes, and Pandora repurchased $98 million
principal amount of such notes with cash for an aggregate purchase
price equal to 100% of the principal amount of the notes
repurchased plus accrued and unpaid interest to the date of
repurchase.
g)
Face amount of the convertible notes and
exchangeable debentures with no fair market value adjustment.
h)
Includes SiriusXM revolving credit
facility and term loan.
i)
Net debt to covenant OIBDA ratio of F1
operating business as defined in F1’s credit facilities for
covenant calculations.
Liberty Media, SiriusXM, F1 and the Braves are in compliance
with their debt covenants as of June 30, 2023.
Total cash and cash equivalents attributed to Liberty SiriusXM
Group decreased $119 million in the second quarter as net debt
repayment at both Liberty SiriusXM Group and SiriusXM and capital
expenditures and return of capital at SiriusXM more than offset
cash from operations at SiriusXM. Included in the cash and cash
equivalents balance attributed to Liberty SiriusXM Group at June
30, 2023 is $51 million held at SiriusXM. Although SiriusXM is a
consolidated subsidiary, it is a separate public company with a
non-controlling interest, therefore Liberty Media does not have
ready access to SiriusXM’s cash balance. Liberty SiriusXM Group
received $78 million of dividends from SiriusXM during the
quarter.
Total debt attributed to Liberty SiriusXM Group decreased $360
million during the quarter due to net debt repayment at both
Liberty SiriusXM Group and SiriusXM. During the second quarter,
Liberty SiriusXM Group paid $275 million to settle the remaining
amount outstanding of its 2.125% exchangeable debentures due 2048.
On August 3, 2023, in connection with the Reclassification, the
0.5% exchangeable debentures due 2050 and the Live Nation margin
loan were attributed to Liberty Live Group.
Total cash and cash equivalents attributed to Formula One Group
decreased $95 million during the quarter as cash from operations at
F1 was more than offset by capital expenditures related to the Las
Vegas Grand Prix and the purchase of investments. Total debt at
Formula One Group was relatively flat in the second quarter.
The margin on F1’s existing Term Loan B was permanently reduced
from 3.25% to 3.00% during the second quarter as a result of F1’s
reported leverage at March 31, 2023 as defined in its credit
facilities for covenant calculations falling below a certain
threshold.
In connection with the Reclassification, the conversion
consideration of the 1.375% cash convertible notes was adjusted
such that the conversion rate is 23.1586 per bond and comprised of
(i) 0.2547 of a share of new Series A Liberty Formula One common
stock, (ii) 0.2650 of a share of new Series A Liberty Live common
stock and (iii) 1.0163 shares of new Series A Liberty SiriusXM
common stock. Liberty Media also expects that its 3.75% Liberty
SiriusXM Group convertible notes due 2028 (convertible into LSXMA)
and its 2.25% Formula One Group convertible notes due 2027
(convertible into FWONK) will be adjusted to provide for the
conversion and settlement of the notes into the reclassified
Liberty SiriusXM Group and Formula One Group equities,
respectively, at new conversion rates in accordance with each
respective bond indenture. The relevant information will be
communicated to bondholders pursuant to the terms of the bond
indentures.
Important Notice: Liberty Media Corporation (NASDAQ:
LSXMA, LSXMB, LSXMK, FWONA, FWONK, LLYVA, LLYVK) will discuss
Liberty Media's earnings release on a conference call which will
begin at 10:00 a.m. (E.T.) on August 4, 2023. The call can be
accessed by dialing (877) 704-2829 or (215) 268-9864, passcode
13736985 at least 10 minutes prior to the start time. The call will
also be broadcast live across the Internet and archived on our
website. To access the webcast go to
https://www.libertymedia.com/investors/news-events/ir-calendar.
Links to this press release will also be available on the Liberty
Media website.
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements about business strategies, market
potential, future financial performance and prospects, the Las
Vegas Grand Prix, the expected benefits of the Split-Off and
Reclassification, the continuation of our stock repurchase plan and
other matters that are not historical facts. These forward-looking
statements involve many risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
by such statements, including, without limitation, possible changes
in market acceptance of new products or services, regulatory
matters affecting our businesses, the unfavorable outcome of
pending or future litigation, the failure to realize benefits of
acquisitions, rapid technological and industry change, failure of
third parties to perform, continued access to capital on terms
acceptable to Liberty Media and changes in law, including consumer
protection laws, and their enforcement. These forward-looking
statements speak only as of the date of this press release, and
Liberty Media expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in Liberty Media's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Please refer to the publicly filed documents of Liberty Media,
including Amendment No. 5 to Liberty Media’s Registration Statement
on Form S-4 filed on June 8, 2023 and the most recent Forms 10-K
and 10-Q, for additional information about Liberty Media and about
the risks and uncertainties related to Liberty Media's business
which may affect the statements made in this press release.
LIBERTY MEDIA
CORPORATION
BALANCE SHEET
INFORMATION
June 30, 2023
(unaudited)
Attributed
Liberty
Formula
SiriusXM
Braves
One
Intergroup
Consolidated
Group
Group
Group
Eliminations
Liberty
amounts in millions
Assets
Current assets:
Cash and cash equivalents
$
311
131
1,489
—
1,931
Trade and other receivables, net
660
52
110
—
822
Other current assets
354
72
355
—
781
Total current assets
1,325
255
1,954
—
3,534
Intergroup interests
143
—
269
(412
)
—
Investments in affiliates, accounted for
using the equity method
960
99
67
—
1,126
Property and equipment, at cost
2,975
1,037
747
—
4,759
Accumulated depreciation
(1,785
)
(299
)
(118
)
—
(2,202
)
1,190
738
629
—
2,557
Intangible assets not subject to
amortization
Goodwill
15,209
176
3,956
—
19,341
FCC licenses
8,600
—
—
—
8,600
Other
1,242
124
—
—
1,366
25,051
300
3,956
—
29,307
Intangible assets subject to amortization,
net
1,032
23
3,004
—
4,059
Other assets
524
85
1,254
(4
)
1,859
Total assets
$
30,225
1,500
11,133
(416
)
42,442
Liabilities and Equity
Current liabilities:
Intergroup payable (receivable)
$
57
(2
)
(55
)
—
—
Accounts payable and accrued
liabilities
1,374
65
315
—
1,754
Current portion of debt
753
7
27
—
787
Deferred revenue
1,287
142
724
—
2,153
Other current liabilities
69
3
27
—
99
Total current liabilities
3,540
215
1,038
—
4,793
Long-term debt
11,977
532
2,923
—
15,432
Deferred income tax liabilities
2,011
51
—
(4
)
2,058
Redeemable intergroup interests
—
341
71
(412
)
—
Other liabilities
587
147
146
—
880
Total liabilities
18,115
1,286
4,178
(416
)
23,163
Equity / Attributed net assets
9,150
203
6,931
—
16,284
Noncontrolling interests in equity of
subsidiaries
2,960
11
24
—
2,995
Total liabilities and equity
$
30,225
1,500
11,133
(416
)
42,442
LIBERTY MEDIA
CORPORATION
STATEMENT OF
OPERATIONS
Three months ended June 30,
2023 (unaudited)
Attributed
Liberty
Formula
SiriusXM
Braves
One
Consolidated
Group
Group
Group
Liberty
amounts in millions
Revenue:
Sirius XM Holdings revenue
$
2,250
—
—
2,250
Formula 1 revenue
—
—
724
724
Other revenue
—
270
—
270
Total revenue
2,250
270
724
3,244
Operating costs and expenses, including
stock-based compensation:
Cost of Sirius XM Holdings services
(exclusive of depreciation shown separately below):
Revenue share and royalties
732
—
—
732
Programming and content(1)
153
—
—
153
Customer service and billing(1)
124
—
—
124
Other(1)
54
—
—
54
Cost of Formula 1 revenue (exclusive of
depreciation shown separately below)
—
—
519
519
Subscriber acquisition costs
93
—
—
93
Other operating expenses(1)
83
197
—
280
Selling, general and administrative(1)
387
34
69
490
Impairment, restructuring and acquisition
costs, net of recoveries
18
1
—
19
Depreciation and amortization
154
19
84
257
1,798
251
672
2,721
Operating income (loss)
452
19
52
523
Other income (expense):
Interest expense
(137
)
(9
)
(54
)
(200
)
Share of earnings (losses) of affiliates,
net
79
12
(1
)
90
Realized and unrealized gains (losses) on
financial instruments, net
(164
)
4
64
(96
)
Unrealized gains (losses) on intergroup
interests
10
(50
)
40
—
Other, net
23
3
24
50
(189
)
(40
)
73
(156
)
Earnings (loss) before income taxes
263
(21
)
125
367
Income tax (expense) benefit
(46
)
(8
)
(10
)
(64
)
Net earnings (loss)
217
(29
)
115
303
Less net earnings (loss) attributable to
the noncontrolling interests
51
—
(1
)
50
Net earnings (loss) attributable to
Liberty stockholders
$
166
(29
)
116
253
(1) Includes stock-based compensation
expense as follows:
Programming and content
8
—
—
8
Customer service and billing
2
—
—
2
Other
1
—
—
1
Other operating expenses
11
—
—
11
Selling, general and administrative
24
3
5
32
Stock compensation expense
$
46
3
5
54
LIBERTY MEDIA
CORPORATION
STATEMENT OF
OPERATIONS
Three months ended June 30,
2022 (unaudited)
Attributed
Liberty
Formula
SiriusXM
Braves
One
Consolidated
Group
Group
Group
Liberty
amounts in millions
Revenue:
Sirius XM Holdings revenue
$
2,254
—
—
2,254
Formula 1 revenue
—
—
744
744
Other revenue
—
260
—
260
Total revenue
2,254
260
744
3,258
Operating costs and expenses, including
stock-based compensation:
Cost of Sirius XM Holdings services
(exclusive of depreciation shown separately below):
Revenue share and royalties
711
—
—
711
Programming and content(1)
152
—
—
152
Customer service and billing(1)
126
—
—
126
Other(1)
58
—
—
58
Cost of Formula 1 revenue (exclusive of
depreciation shown separately below)
—
—
534
534
Subscriber acquisition costs
91
—
—
91
Other operating expenses(1)
72
175
—
247
Selling, general and administrative(1)
419
33
68
520
Impairment, restructuring and acquisition
costs, net of recoveries
1
—
—
1
Depreciation and amortization
152
17
93
262
1,782
225
695
2,702
Operating income (loss)
472
35
49
556
Other income (expense):
Interest expense
(125
)
(6
)
(30
)
(161
)
Share of earnings (losses) of affiliates,
net
54
8
(1
)
61
Realized and unrealized gains (losses) on
financial instruments, net
296
1
83
380
Unrealized gains (losses) on intergroup
interests
(35
)
35
—
—
Other, net
4
1
17
22
194
39
69
302
Earnings (loss) before income taxes
666
74
118
858
Income tax (expense) benefit
(168
)
(10
)
(6
)
(184
)
Net earnings (loss)
498
64
112
674
Less net earnings (loss) attributable to
the noncontrolling interests
51
—
2
53
Less net earnings (loss) attributable to
redeemable noncontrolling interest
—
—
(1
)
(1
)
Net earnings (loss) attributable to
Liberty stockholders
$
447
64
111
622
(1) Includes stock-based compensation
expense as follows:
Programming and content
8
—
—
8
Customer service and billing
2
—
—
2
Other
2
—
—
2
Other operating expenses
9
—
—
9
Selling, general and administrative
29
3
4
36
Stock compensation expense
$
50
3
4
57
LIBERTY MEDIA
CORPORATION
STATEMENT OF CASH FLOWS
INFORMATION
Six months ended June 30, 2023
(unaudited)
Attributed
Liberty
Formula
SiriusXM
Braves
One
Consolidated
Group
Group
Group
Liberty
amounts in millions
Cash flows from operating activities:
Net earnings (loss)
$
437
(88
)
6
355
Adjustments to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization
315
34
168
517
Stock-based compensation
94
6
10
110
Non-cash impairment and restructuring
costs
21
—
—
21
Share of (earnings) loss of affiliates,
net
(72
)
(11
)
3
(80
)
Unrealized (gains) losses on intergroup
interests, net
(64
)
63
1
—
Realized and unrealized (gains) losses on
financial instruments, net
162
(3
)
(17
)
142
Deferred income tax expense (benefit)
(33
)
(3
)
1
(35
)
Intergroup tax allocation
86
(2
)
(84
)
—
Intergroup tax (payments) receipts
(33
)
(3
)
36
—
Other charges (credits), net
(12
)
4
—
(8
)
Changes in operating assets and
liabilities
Current and other assets
1
(5
)
(91
)
(95
)
Payables and other liabilities
(48
)
44
275
271
Net cash provided (used) by operating
activities
854
36
308
1,198
Cash flows from investing activities:
Investments in equity method affiliates
and debt and equity securities
(41
)
—
(173
)
(214
)
Cash proceeds from dispositions
(1
)
—
68
67
Capital expended for property and
equipment, including internal-use software and website
development
(334
)
(30
)
(180
)
(544
)
Other investing activities, net
(1
)
—
(19
)
(20
)
Net cash provided (used) by investing
activities
(377
)
(30
)
(304
)
(711
)
Cash flows from financing activities:
Borrowings of debt
2,048
16
—
2,064
Repayments of debt
(2,563
)
(19
)
(59
)
(2,641
)
Intergroup (repayments) borrowings
202
—
(202
)
—
Subsidiary shares repurchased by
subsidiary
(199
)
—
—
(199
)
Cash dividends paid by subsidiary
(33
)
—
—
(33
)
Taxes paid in lieu of shares issued for
stock-based compensation
(19
)
(1
)
(8
)
(28
)
Other financing activities, net
36
8
19
63
Net cash provided (used) by financing
activities
(528
)
4
(250
)
(774
)
Effect of foreign exchange rate changes on
cash, cash equivalents and restricted cash
—
—
2
2
Net increase (decrease) in cash, cash
equivalents and restricted cash
(51
)
10
(244
)
(285
)
Cash, cash equivalents and restricted cash
at beginning of period
370
173
1,733
2,276
Cash, cash equivalents and restricted cash
at end of period
$
319
183
1,489
1,991
Cash and cash equivalents
$
311
131
1,489
1,931
Restricted cash included in other current
assets
—
52
—
52
Restricted cash included in other
assets
8
—
—
8
Total cash and cash equivalents and
restricted cash at end of period
$
319
183
1,489
1,991
LIBERTY MEDIA
CORPORATION
STATEMENT OF CASH FLOWS
INFORMATION
Six months ended June 30, 2022
(unaudited)
Attributed
Liberty
Formula
SiriusXM
Braves
One
Consolidated
Group
Group
Group
Liberty
amounts in millions
Cash flows from operating activities:
Net earnings (loss)
$
842
51
77
970
Adjustments to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization
304
35
183
522
Stock-based compensation
99
6
7
112
Share of (earnings) loss of affiliates,
net
(36
)
(12
)
1
(47
)
Unrealized (gains) losses on intergroup
interests, net
15
(36
)
21
—
Realized and unrealized (gains) losses on
financial instruments, net
(357
)
(6
)
(76
)
(439
)
Deferred income tax expense (benefit)
161
(6
)
26
181
Intergroup tax allocation
65
13
(78
)
—
Intergroup tax (payments) receipts
(42
)
9
33
—
Other charges (credits), net
(13
)
(11
)
(10
)
(34
)
Changes in operating assets and
liabilities
—
—
—
—
Current and other assets
11
(8
)
(117
)
(114
)
Payables and other liabilities
(162
)
65
167
70
Net cash provided (used) by operating
activities
887
100
234
1,221
Cash flows from investing activities:
Investments in equity affiliates and debt
and equity securities
(1
)
(5
)
(3
)
(9
)
Cash proceeds from dispositions
50
47
51
148
Cash (paid) received for acquisitions, net
of cash acquired
(137
)
—
—
(137
)
Capital expended for property and
equipment, including internal-use software and website
development
(196
)
(8
)
(251
)
(455
)
Other investing activities, net
4
—
74
78
Net cash provided (used) by investing
activities
(280
)
34
(129
)
(375
)
Cash flows from financing activities:
Borrowings of debt
2,634
40
—
2,674
Repayments of debt
(2,320
)
(138
)
(243
)
(2,701
)
Liberty stock repurchases
(319
)
—
(37
)
(356
)
Subsidiary shares repurchased by
subsidiary
(415
)
—
—
(415
)
Cash dividends paid by subsidiary
(217
)
—
—
(217
)
Taxes paid in lieu of shares issued for
stock-based compensation
(71
)
—
26
(45
)
Other financing activities, net
(3
)
(7
)
27
17
Net cash provided (used) by financing
activities
(711
)
(105
)
(227
)
(1,043
)
Effect of foreign exchange rates on cash,
cash equivalents and restricted cash
—
—
(8
)
(8
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(104
)
29
(130
)
(205
)
Cash, cash equivalents and restricted cash
at beginning of period
606
244
2,074
2,924
Cash, cash equivalents and restricted cash
at end of period
$
502
273
1,944
2,719
Cash and cash equivalents
$
494
207
1,944
2,645
Restricted cash included in other current
assets
—
56
—
56
Restricted cash included in other
assets
8
10
—
18
Total cash and cash equivalents and
restricted cash at end of period
$
502
273
1,944
2,719
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTAL
DISCLOSURES
SCHEDULE 1
To provide investors with additional information regarding our
financial results, this press release includes a presentation of
Adjusted OIBDA, which is a non-GAAP financial measure, for Liberty
SiriusXM Group, Braves Group and Formula One Group, together with
reconciliations to operating income, as determined under GAAP.
Liberty Media defines Adjusted OIBDA as operating income (loss)
plus depreciation and amortization, stock-based compensation,
separately reported litigation settlements, restructuring,
acquisition and other related costs and impairment charges.
Liberty Media believes Adjusted OIBDA is an important indicator
of the operational strength and performance of its businesses by
identifying those items that are not directly a reflection of each
business’ performance or indicative of ongoing business trends. In
addition, this measure allows management to view operating results
and perform analytical comparisons and benchmarking between
businesses and identify strategies to improve performance. Because
Adjusted OIBDA is used as a measure of operating performance,
Liberty Media views operating income as the most directly
comparable GAAP measure. Adjusted OIBDA is not meant to replace or
supersede operating income or any other GAAP measure, but rather to
supplement such GAAP measures in order to present investors with
the same information that Liberty Media's management considers in
assessing the results of operations and performance of its
assets.
The following table provides a reconciliation of Adjusted OIBDA
for Liberty Media to operating income (loss) calculated in
accordance with GAAP for the three months ended June 30, 2022 and
June 30, 2023, respectively.
QUARTERLY SUMMARY
(amounts in millions)
2Q22
2Q23
Liberty SiriusXM Group
Operating income
$
472
$
452
Depreciation and amortization
152
154
Stock compensation expense
50
46
Legal settlements and reserves
—
24
Impairment, restructuring and acquisition
costs, net of recoveries(a)
1
18
Adjusted OIBDA
$
675
$
694
Formula One Group
Operating income
$
49
$
52
Depreciation and amortization
93
84
Stock compensation expense
4
5
Adjusted OIBDA
$
146
$
141
Braves Group
Operating income
$
35
$
19
Depreciation and amortization
17
19
Stock compensation expense
3
3
Impairment, restructuring and acquisition
costs, net of recoveries(a)
—
1
Adjusted OIBDA
$
55
$
42
Liberty Media Corporation
(Consolidated)
Operating income
$
556
$
523
Depreciation and amortization
262
257
Stock compensation expense
57
54
Legal settlements and reserves
—
24
Impairment, restructuring and acquisition
costs, net of recoveries(a)
1
19
Adjusted OIBDA
$
876
$
877
(a)
During the three months ended June 30,
2023, SiriusXM recorded impairments primarily related to terminated
software projects of $10 million, severance and other related costs
of $5 million and a cost-method investment impairment of $2
million. During the three months ended June 30, 2023, Braves
Holdings recorded $1 million of charges associated with hurricane
damage to the Braves’ spring training facility located in North
Port, Florida. These charges have been excluded from adjusted
OIBDA.
SCHEDULE 2
This press release also includes a presentation of adjusted
EBITDA of SiriusXM, which is a non-GAAP financial measure used by
SiriusXM, together with a reconciliation to SiriusXM's stand-alone
net income, as determined under GAAP. SiriusXM defines adjusted
EBITDA as net income before interest expense, income tax expense
and depreciation and amortization. SiriusXM adjusts EBITDA to
exclude the impact of other expense (income) as well as certain
other charges discussed below. Adjusted EBITDA is a non-GAAP
financial measure that excludes or adjusts for (if applicable): (i)
loss on extinguishment of debt, (ii) share-based payment expense,
(iii) impairment, restructuring and acquisition costs, (iv) legal
settlements/reserves and (v) other significant operating expense
(income) that do not relate to the on-going performance of
SiriusXM’s business. SiriusXM believes adjusted EBITDA is a useful
measure of the underlying trend of its operating performance, which
provides useful information about its business apart from the costs
associated with its capital structure and purchase price
accounting. SiriusXM believes investors find this non-GAAP
financial measure useful when analyzing past operating performance
with current performance and comparing SiriusXM’s operating
performance to the performance of other communications,
entertainment and media companies. SiriusXM believes investors use
adjusted EBITDA to estimate current enterprise value and to make
investment decisions. As a result of large capital investments in
SiriusXM’s satellite radio system, its results of operations
reflect significant charges for depreciation expense. SiriusXM
believes the exclusion of share-based payment expense is useful as
it is not directly related to the operational conditions of its
business. SiriusXM also believes the exclusion of impairment,
restructuring and acquisition related costs, to the extent they
occur during the period, is useful as they are significant expenses
not incurred as part of its normal operations for the period.
Adjusted EBITDA has certain limitations in that it does not take
into account the impact to SiriusXM’s consolidated statements of
comprehensive income of certain expenses, including share-based
payment expense. SiriusXM endeavors to compensate for the
limitations of the non-GAAP measure presented by also providing the
comparable GAAP measure with equal or greater prominence and
descriptions of the reconciling items, including quantifying such
items, to derive the non-GAAP measure. Investors that wish to
compare and evaluate SiriusXM’s operating results after giving
effect for these costs, should refer to net income as disclosed in
SiriusXM’s unaudited consolidated statements of comprehensive
income. Since adjusted EBITDA is a non-GAAP financial performance
measure, SiriusXM’s calculation of adjusted EBITDA may be
susceptible to varying calculations; may not be comparable to other
similarly titled measures of other companies; and should not be
considered in isolation, as a substitute for, or superior to
measures of financial performance prepared in accordance with GAAP.
The reconciliation of net income to the adjusted EBITDA is
calculated as follows:
Unaudited
For the Three Months Ended
June 30,
2022
2023
($ in millions)
Net income:
$
292
$
310
Add back items excluded from Adjusted
EBITDA:
Legal settlements and reserves
—
24
Impairment, restructuring and acquisition
costs(a)
1
18
Share-based payment expense
47
42
Depreciation and amortization
135
139
Interest expense
104
107
Other (income) expense
4
—
Income tax expense
96
62
Adjusted EBITDA
$
679
$
702
(a)
During the three months ended June 30,
2023, SiriusXM recorded impairments primarily related to terminated
software projects of $10 million, severance and other related costs
of $5 million and a cost-method investment impairment of $2
million. These charges have been excluded from adjusted OIBDA.
SCHEDULE 3
This press release also includes a presentation of free cash
flow of SiriusXM, which is a non-GAAP financial measure used by
SiriusXM, together with a reconciliation to SiriusXM's stand-alone
cash flow provided by operating activities, as determined under
GAAP. SiriusXM’s free cash flow is derived from cash flow provided
by operating activities plus insurance recoveries on its
satellites, net of additions to property and equipment and
purchases of other investments. Free cash flow is a metric that
SiriusXM’s management and board of directors use to evaluate the
cash generated by its operations, net of capital expenditures and
other investment activity. In a capital intensive business, with
significant investments in satellites, SiriusXM looks at its
operating cash flow, net of these investing cash outflows, to
determine cash available for future subscriber acquisition and
capital expenditures, to repurchase or retire debt, to acquire
other companies and to evaluate its ability to return capital to
stockholders. SiriusXM excludes from free cash flow certain items
that do not relate to the on-going performance of its business,
such as cash flows related to acquisitions, strategic and
short-term investments and net loan activity with related parties
and other equity investees. SiriusXM believes free cash flow is an
indicator of the long-term financial stability of its business.
Free cash flow, which is reconciled to "Net cash provided by
operating activities," is a non-GAAP financial measure. This
measure can be calculated by deducting amounts under the captions
"Additions to property and equipment" and deducting or adding
Restricted and other investment activity from "Net cash provided by
operating activities" from the unaudited consolidated statements of
cash flows. Free cash flow should be used in conjunction with other
GAAP financial performance measures and may not be comparable to
free cash flow measures presented by other companies. Free cash
flow should be viewed as a supplemental measure rather than an
alternative measure of cash flows from operating activities, as
determined in accordance with GAAP. Free cash flow is limited and
does not represent remaining cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the
payments required for debt maturities. SiriusXM believes free cash
flow provides useful supplemental information to investors
regarding its current cash flow, along with other GAAP measures
(such as cash flows from operating and investing activities), to
determine its financial condition, and to compare its operating
performance to other communications, entertainment and media
companies. Free cash flow is calculated as follows:
Unaudited
For the Three Months Ended
June 30,
2022
2023
($ in millions)
Cash flow information
Net cash provided by operating
activities
$
533
$
451
Net cash used in investing activities
$
(191
)
$
(130
)
Net cash used in financing activities
$
(292
)
$
(323
)
Free cash flow
Net cash provided by operating
activities
$
533
$
451
Additions to property and equipment
(99
)
(128
)
Purchases of other investments
1
—
Free cash flow
$
435
$
323
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803283098/en/
Shane Kleinstein (720) 875-5432
Liberty Media (NASDAQ:LSXMA)
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Liberty Media (NASDAQ:LSXMA)
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