Exhibit 99.1
Unaudited Attributed Financial Information for Tracking Stock Groups
The following tables present our assets and liabilities as of September 30, 2019 and revenue and expenses for the three and nine months ended September 30, 2019 and 2018 and cash flows for the nine months ended September 30, 2019 and 2018. The tables further present our assets, liabilities, revenue, expenses and cash flows that are intended to be attributed to the Liberty SiriusXM Group, Liberty Braves Group (“Braves Group”) and the Liberty Formula One Group (“Formula One Group”), respectively. The financial information should be read in conjunction with our condensed consolidated financial statements for the nine months ended September 30, 2019 included in this Quarterly Report on Form 10-Q.
Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the Liberty SiriusXM Group, Braves Group and the Formula One Group, our tracking stock capital structure does not affect the ownership or the respective legal title to our assets or responsibility for our liabilities. We and our subsidiaries are each responsible for our respective liabilities. Holders of Liberty SiriusXM common stock, Liberty Braves common stock and Liberty Formula One common stock are holders of our common stock and are subject to risks associated with an investment in our company and all of our businesses, assets and liabilities. The issuance of Liberty SiriusXM common stock, Liberty Braves and Liberty Formula One common stock does not affect the rights of our creditors.
1
SUMMARY ATTRIBUTED FINANCIAL DATA
Liberty SiriusXM Group
Summary Balance Sheet Data:
September 30, | December 31, | ||||||
2019 | 2018 | ||||||
amounts in millions | |||||||
Cash and cash equivalents | $ | 133 | 91 | ||||
Investments in affiliates, accounted for using the equity method | $ | 638 | 629 | ||||
Intangible assets not subject to amortization | $ | 25,678 | 23,781 | ||||
Intangible assets subject to amortization, net | $ | 1,632 | 942 | ||||
Total assets | $ | 31,004 | 28,292 | ||||
Deferred revenue | $ | 1,938 | 1,932 | ||||
Long-term debt, including current portion | $ | 8,857 | 7,858 | ||||
Deferred tax liabilities | $ | 1,856 | 1,673 | ||||
Attributed net assets | $ | 10,735 | 10,599 | ||||
Noncontrolling interest | $ | 5,666 | 5,108 |
Summary Statement of Operations Data:
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
2019 | 2018 | 2019 | 2018 | |||||||
amounts in millions | ||||||||||
Revenue | $ | 2,011 | 1,468 | 5,732 | 4,275 | |||||
Cost of services (1) | $ | (880) | (565) | (2,510) | (1,736) | |||||
Other operating expenses (1) | $ | (78) | (31) | (206) | (89) | |||||
Selling, general and administrative expense (1) | $ | (363) | (214) | (1,050) | (640) | |||||
Operating income (loss) | $ | 454 | 455 | 1,174 | 1,184 | |||||
Interest expense | $ | (115) | (95) | (326) | (291) | |||||
Income tax (expense) benefit | $ | (63) | (30) | (251) | (170) | |||||
Net earnings (loss) attributable to noncontrolling interests | $ | 68 | 98 | 175 | 263 | |||||
Earnings (loss) attributable to Liberty stockholders | $ | 140 | 185 | 368 | 550 |
(1) | Includes stock-based compensation expense as follows: |
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
2019 | 2018 | 2019 | 2018 | |||||||
amounts in millions | ||||||||||
Cost of services | $ | 10 | 5 | 29 | 28 | |||||
Other operating expenses | 15 | 5 | 37 | 13 | ||||||
Selling, general and administrative expense | 41 | 25 | 117 | 76 | ||||||
$ | 66 | 35 | 183 | 117 |
2
Braves Group
Summary Balance Sheet Data:
September 30, | December 31, | ||||||
2019 | 2018 | ||||||
amounts in millions | |||||||
Cash and cash equivalents | $ | 142 | 107 | ||||
Property and equipment, net | $ | 766 | 1,041 | ||||
Investments in affiliates, accounted for using the equity method | $ | 104 | 92 | ||||
Intangible assets not subject to amortization | $ | 323 | 323 | ||||
Intangible assets subject to amortization, net | $ | 35 | 37 | ||||
Total assets | $ | 1,594 | 1,805 | ||||
Deferred revenue | $ | 52 | 54 | ||||
Long-term debt, including current portion | $ | 535 | 491 | ||||
Deferred tax liabilities | $ | 78 | 69 | ||||
Attributed net assets | $ | 426 | 446 |
Summary Statement of Operations Data:
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
2019 | 2018 | 2019 | 2018 | |||||||
amounts in millions | ||||||||||
Revenue | $ | 212 | 200 | 442 | 410 | |||||
Selling, general and administrative expense (1) | $ | (26) | (26) | (77) | (72) | |||||
Operating income (loss) | $ | 21 | 45 | 6 | 29 | |||||
Share of earnings (losses) of affiliates, net | $ | 4 | 2 | 13 | 8 | |||||
Unrealized gains (losses) on intergroup interest | $ | 2 | (13) | (26) | (46) | |||||
Income tax (expense) benefit | $ | (7) | 12 | (1) | 11 | |||||
Earnings (loss) attributable to Liberty stockholders | $ | 12 | 41 | (33) | (13) |
(1) | Includes stock-based compensation of $4 million and $4 million for the three months ended September 30, 2019 and 2018, respectively, and $13 million and $9 million for the nine months ended September 30, 2019 and 2018, respectively. |
3
Formula One Group
Summary Balance Sheet Data:
September 30, | December 31, | ||||||
2019 | 2018 | ||||||
amounts in millions | |||||||
Cash and cash equivalents | $ | 419 | 160 | ||||
Investments in affiliates, accounted for using the equity method | $ | 956 | 920 | ||||
Intangible assets not subject to amortization | $ | 3,956 | 3,956 | ||||
Intangible assets subject to amortization, net | $ | 4,412 | 4,736 | ||||
Total assets | $ | 11,361 | 10,957 | ||||
Long-term debt, including current portion | $ | 5,329 | 5,039 | ||||
Attributed net assets | $ | 5,356 | 5,550 |
Summary Statement of Operations Data:
Three months ended | Nine months ended | |||||||||
September 30, | September 30, | |||||||||
2019 | 2018 | 2019 | 2018 | |||||||
amounts in millions | ||||||||||
Revenue | $ | 633 | 647 | 1,499 | 1,346 | |||||
Cost of Formula 1 revenue | $ | (434) | (450) | (1,023) | (945) | |||||
Selling, general and administrative expense (1) | $ | (51) | (48) | (148) | (137) | |||||
Operating income (loss) | $ | 32 | 31 | (12) | (81) | |||||
Interest expense | $ | (48) | (49) | (149) | (143) | |||||
Share of earnings (losses) of affiliates, net | $ | 58 | 58 | 74 | 66 | |||||
Realized and unrealized gains (losses) on financial instruments, net | $ | 26 | 19 | (171) | 110 | |||||
Unrealized gains (losses) on intergroup interest | $ | (2) | 13 | 26 | 46 | |||||
Income tax (expense) benefit | $ | (28) | (34) | 26 | 25 | |||||
Earnings (loss) attributable to Liberty stockholders | $ | 41 | 42 | (184) | 34 |
(1) | Includes stock-based compensation of $6 million and $7 million for the three months ended September 30, 2019 and 2018, respectively, and $21 million and $19 million for the nine months ended September 30, 2019 and 2018, respectively. |
4
BALANCE SHEET INFORMATION
September 30, 2019
(unaudited)
Attributed (note 1) | ||||||||||||
Liberty | ||||||||||||
SiriusXM | Braves | Formula One | Inter-Group | Consolidated | ||||||||
| Group | Group | Group | Eliminations | Liberty |
| ||||||
amounts in millions | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | | | | — | |
| |||||
Trade and other receivables, net |
| | | | — | |
| |||||
Other current assets |
| | | | — | |
| |||||
Total current assets |
| | | | — | |
| |||||
Intergroup interest in the Liberty Braves Group (note 1) | — | — | | ( | — | |||||||
Investments in affiliates, accounted for using the equity method (note 1) |
| | | | — | |
| |||||
Property and equipment, at cost |
| | | | — | |
| |||||
Accumulated depreciation |
| ( | ( | ( | — | ( |
| |||||
| | | | — | |
| ||||||
Intangible assets not subject to amortization | ||||||||||||
Goodwill |
| | | | — | |
| |||||
FCC licenses |
| | — | — | — | |
| |||||
Other |
| | | — | — | |
| |||||
| | | | — | |
| ||||||
Intangible assets subject to amortization, net |
| | | | — | |
| |||||
Other assets |
| | | | ( | |
| |||||
Total assets | $ | | | | ( | |
| |||||
Liabilities and Equity | ||||||||||||
Current liabilities: | ||||||||||||
Intergroup payable (receivable) (note 3) | $ | | ( | | — | — | ||||||
Accounts payable and accrued liabilities | |
| | | — | | ||||||
Deferred revenue |
| |
| | | — | | |||||
Other current liabilities |
| |
| | | — | | |||||
Total current liabilities |
| |
| | | — | | |||||
Long-term debt (note 1) |
| |
| | | — | | |||||
Deferred income tax liabilities |
| |
| | — | ( | | |||||
Redeemable intergroup interest (note 1) | — | | — | ( | — | |||||||
Other liabilities |
| |
| | | — | | |||||
Total liabilities |
| |
| | | ( | | |||||
Equity / Attributed net assets |
| |
| | | — | | |||||
Noncontrolling interests in equity of subsidiaries |
| |
| ( | | — | | |||||
Total liabilities and equity | $ | |
| | | ( | |
5
STATEMENT OF OPERATIONS INFORMATION
Three months ended September 30, 2019
(unaudited)
Attributed (note 1) | ||||||||||
Liberty | ||||||||||
SiriusXM | Braves | Formula One | Consolidated | |||||||
Group | Group | Group | Liberty | |||||||
amounts in millions | ||||||||||
Revenue: | ||||||||||
SIRIUS XM Holdings revenue | $ | |
| — | — | | ||||
Formula 1 revenue | — | — | | | ||||||
Other revenue |
| — |
| | — | | ||||
Total revenue |
| |
| | | | ||||
Operating costs and expenses, including stock-based compensation (note 2): | ||||||||||
Cost of services (exclusive of depreciation shown separately below): | ||||||||||
Revenue share and royalties |
| |
| — | — | | ||||
Programming and content |
| |
| — | — | | ||||
Customer service and billing |
| |
| — | — | | ||||
Other |
| |
| — | — | | ||||
Cost of Formula 1 revenue | — | — | | | ||||||
Subscriber acquisition costs |
| |
| — | — | | ||||
Other operating expenses |
| |
| | — | | ||||
Selling, general and administrative |
| |
| | | | ||||
Depreciation and amortization |
| |
| | | | ||||
| |
| | | | |||||
Operating income (loss) |
| |
| | | | ||||
Other income (expense): | ||||||||||
Interest expense |
| ( |
| ( | ( | ( | ||||
Share of earnings (losses) of affiliates, net |
| ( |
| | | | ||||
Realized and unrealized gains (losses) on financial instruments, net |
| ( |
| ( | | | ||||
Unrealized gains (losses) on intergroup interest (note 1) | — | | ( | — | ||||||
Other, net |
| ( |
| — | | ( | ||||
| ( |
| ( | | ( | |||||
Earnings (loss) before income taxes |
| |
| | | | ||||
Income tax (expense) benefit |
| ( |
| ( | ( | ( | ||||
Net earnings (loss) |
| |
| | | | ||||
Less net earnings (loss) attributable to the noncontrolling interests |
| |
| — | | | ||||
Net earnings (loss) attributable to Liberty stockholders | $ | |
| | | |
6
STATEMENT OF OPERATIONS INFORMATION
Three months ended September 30, 2018
(unaudited)
Attributed (note 1) | ||||||||||
Liberty | ||||||||||
SiriusXM | Braves | Formula One | Consolidated | |||||||
Group | Group | Group | Liberty | |||||||
amounts in millions | ||||||||||
Revenue: | ||||||||||
SIRIUS XM Holdings revenue | $ | |
| — | — | | ||||
Formula 1 revenue | — | — | | | ||||||
Other revenue |
| — |
| | — | | ||||
Total revenue |
| |
| | | | ||||
Operating costs and expenses, including stock-based compensation (note 2): | ||||||||||
Cost of services (exclusive of depreciation shown separately below): | ||||||||||
Revenue share and royalties |
| |
| — | — | | ||||
Programming and content |
| |
| — | — | | ||||
Customer service and billing |
| |
| — | — | | ||||
Other |
| |
| — | — | | ||||
Cost of Formula 1 revenue | — | — | | | ||||||
Subscriber acquisition costs |
| | — | — | | |||||
Other operating expenses |
| |
| | — | | ||||
Selling, general and administrative |
| |
| | | | ||||
Depreciation and amortization |
| |
| | | | ||||
| |
| | | | |||||
Operating income (loss) |
| |
| | | | ||||
Other income (expense): | ||||||||||
Interest expense |
| ( |
| ( | ( | ( | ||||
Share of earnings (losses) of affiliates, net |
| ( |
| | | | ||||
Realized and unrealized gains (losses) on financial instruments, net |
| ( |
| | | ( | ||||
Unrealized gains (losses) on intergroup interest (note 1) | — | ( | | — | ||||||
Other, net |
| |
| — | | | ||||
| ( |
| ( | | ( | |||||
Earnings (loss) before income taxes |
| |
| | | | ||||
Income tax (expense) benefit |
| ( |
| | ( | ( | ||||
Net earnings (loss) |
| |
| | | | ||||
Less net earnings (loss) attributable to the noncontrolling interests |
| |
| — | — | | ||||
Net earnings (loss) attributable to Liberty stockholders | $ | |
| | | |
7
STATEMENT OF OPERATIONS INFORMATION
Nine months ended September 30, 2019
(unaudited)
Attributed (note 1) | ||||||||||
Liberty | ||||||||||
SiriusXM | Braves | Formula One | Consolidated | |||||||
Group | Group | Group | Liberty | |||||||
amounts in millions | ||||||||||
Revenue: | ||||||||||
SIRIUS XM Holdings revenue | $ | |
| — | — | | ||||
Formula 1 revenue | — | — | | | ||||||
Other revenue |
| — |
| | — | | ||||
Total revenue |
| |
| | | | ||||
Operating costs and expenses, including stock-based compensation (note 2): | ||||||||||
Cost of subscriber services (exclusive of depreciation shown separately below): | ||||||||||
Revenue share and royalties |
| |
| — | — | | ||||
Programming and content |
| |
| — | — | | ||||
Customer service and billing |
| |
| — | — | | ||||
Other |
| |
| — | — | | ||||
Cost of Formula 1 revenue | — | — | | | ||||||
Subscriber acquisition costs |
| |
| — | — | | ||||
Other operating expenses |
| |
| | — | | ||||
Selling, general and administrative |
| |
| | | | ||||
Acquisition and other related costs | |
| — | — | | |||||
Depreciation and amortization |
| |
| | | | ||||
| |
| | | | |||||
Operating income (loss) |
| |
| | ( | | ||||
Other income (expense): | ||||||||||
Interest expense |
| ( |
| ( | ( | ( | ||||
Share of earnings (losses) of affiliates, net |
| ( |
| | | | ||||
Realized and unrealized gains (losses) on financial instruments, net |
| |
| ( | ( | ( | ||||
Unrealized gains (losses) on intergroup interest (note 1) | — | ( | | — | ||||||
Other, net |
| ( |
| | | ( | ||||
| ( |
| ( | ( | ( | |||||
Earnings (loss) before income taxes |
| |
| ( | ( | | ||||
Income tax (expense) benefit |
| ( |
| ( | | ( | ||||
Net earnings (loss) |
| |
| ( | ( | | ||||
Less net earnings (loss) attributable to the noncontrolling interests |
| |
| — | | | ||||
Net earnings (loss) attributable to Liberty stockholders | $ | |
| ( | ( | |
8
STATEMENT OF OPERATIONS INFORMATION
Nine months ended September 30, 2018
(unaudited)
Attributed (note 1) | ||||||||||
Liberty | ||||||||||
SiriusXM | Braves | Formula One | Consolidated | |||||||
Group | Group | Group | Liberty | |||||||
amounts in millions | ||||||||||
Revenue: | ||||||||||
SIRIUS XM Holdings revenue | $ | |
| — | — | | ||||
Formula 1 revenue | — | — | | | ||||||
Other revenue |
| — |
| | — | | ||||
Total revenue |
| |
| | | | ||||
Operating costs and expenses, including stock-based compensation (note 2): | ||||||||||
Cost of services (exclusive of depreciation shown separately below): | ||||||||||
Revenue share and royalties |
| |
| — | — | | ||||
Programming and content |
| |
| — | — | | ||||
Customer service and billing |
| |
| — | — | | ||||
Other |
| |
| — | — | | ||||
Cost of Formula 1 revenue | — | — | | | ||||||
Subscriber acquisition costs |
| | — | — | | |||||
Other operating expenses |
| |
| | — | | ||||
Selling, general and administrative |
| |
| | | | ||||
Depreciation and amortization |
| |
| | | | ||||
| |
| | | | |||||
Operating income (loss) |
| |
| | ( | | ||||
Other income (expense): | ||||||||||
Interest expense |
| ( |
| ( | ( | ( | ||||
Share of earnings (losses) of affiliates, net |
| ( |
| | | | ||||
Realized and unrealized gains (losses) on financial instruments, net |
| |
| | | | ||||
Unrealized gains (losses) on intergroup interest (note 1) | — | ( | | — | ||||||
Other, net |
| |
| | | | ||||
| ( |
| ( | | ( | |||||
Earnings (loss) before income taxes |
| |
| ( | | | ||||
Income tax (expense) benefit |
| ( |
| | | ( | ||||
Net earnings (loss) |
| |
| ( | | | ||||
Less net earnings (loss) attributable to the noncontrolling interests |
| |
| ( | | | ||||
Net earnings (loss) attributable to Liberty stockholders | $ | |
| ( | | |
9
STATEMENT OF CASH FLOWS INFORMATION
Nine months ended September 30, 2019
(unaudited)
Attributed (note 1) | ||||||||||
Liberty | ||||||||||
SiriusXM | Braves | Formula One | Consolidated | |||||||
Group | Group | Group | Liberty | |||||||
amounts in millions | ||||||||||
Cash flows from operating activities: | ||||||||||
Net earnings (loss) | $ | |
| ( | ( | | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||
Depreciation and amortization |
| |
| | | | ||||
Stock-based compensation |
| |
| | | | ||||
Share of (earnings) loss of affiliates, net |
| |
| ( | ( | ( | ||||
Unrealized (gains) losses on intergroup interest, net | — | | ( | — | ||||||
Realized and unrealized (gains) losses on financial instruments, net |
| ( |
| | | | ||||
Noncash interest expense (benefit) | | | | | ||||||
Deferred income tax expense (benefit) |
| |
| | ( | | ||||
Intergroup tax allocation | | ( | | — | ||||||
Intergroup tax (payments) receipts | ( | | ( | — | ||||||
Other charges (credits), net |
| |
| | ( | | ||||
Changes in operating assets and liabilities | ||||||||||
Current and other assets |
| |
| ( | ( | ( | ||||
Payables and other liabilities |
| ( |
| | | | ||||
Net cash provided (used) by operating activities |
| |
| | | | ||||
Cash flows from investing activities: | ||||||||||
Investments in equity method affiliates and debt and equity securities |
| ( |
| ( | ( | ( | ||||
Cash proceeds from sale of investments | | — | | | ||||||
Cash paid for acquisitions, net of cash acquired | | — | — | | ||||||
Capital expended for property and equipment |
| ( |
| ( | ( | ( | ||||
Sales of short term investments and other marketable securities | |
| — | — | | |||||
Other investing activities, net |
| |
| — | ( | ( | ||||
Net cash provided (used) by investing activities |
| |
| ( | ( | | ||||
Cash flows from financing activities: | ||||||||||
Borrowings of debt |
| |
| | — | | ||||
Repayments of debt |
| ( |
| ( | ( | ( | ||||
Series C Liberty SiriusXM stock repurchases | ( | — | — | ( | ||||||
Subsidiary shares repurchased by subsidiary |
| ( |
| — | — | ( | ||||
Cash dividends paid by subsidiary | ( | — | — | ( | ||||||
Taxes paid in lieu of shares issued for stock-based compensation |
| ( |
| ( | | ( | ||||
Other financing activities, net | ( | ( | | ( | ||||||
Net cash provided (used) by financing activities |
| ( |
| | | ( | ||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | — | — | ( | ( | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
| |
| | | | ||||
Cash, cash equivalents and restricted cash at beginning of period |
| |
| | | | ||||
Cash, cash equivalents and restricted cash at end of period | $ | |
| | | |
10
STATEMENT OF CASH FLOWS INFORMATION
Nine months ended September 30, 2018
(unaudited)
Attributed (note 1) | ||||||||||
Liberty | ||||||||||
SiriusXM | Braves | Formula One | Consolidated | |||||||
Group | Group | Group | Liberty | |||||||
amounts in millions | ||||||||||
Cash flows from operating activities: | ||||||||||
Net earnings (loss) | $ | |
| ( | | | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||
Depreciation and amortization |
| |
| | | | ||||
Stock-based compensation |
| |
| | | | ||||
Share of (earnings) loss of affiliates, net |
| |
| ( | ( | ( | ||||
Unrealized (gains) losses on intergroup interest, net | — | | ( | — | ||||||
Realized and unrealized (gains) losses on financial instruments, net |
| ( |
| ( | ( | ( | ||||
Noncash interest expense (benefit) | ( | | ( | ( | ||||||
Deferred income tax expense (benefit) |
| |
| | ( | | ||||
Intergroup tax allocation | | ( | ( | — | ||||||
Other charges (credits), net |
| |
| | | | ||||
Changes in operating assets and liabilities | ||||||||||
Current and other assets |
| ( |
| ( | ( | ( | ||||
Payables and other liabilities |
| |
| ( | | | ||||
Net cash provided (used) by operating activities |
| |
| | | | ||||
Cash flows from investing activities: | ||||||||||
Investments in equity method affiliates and debt and equity securities |
| ( |
| — | ( | ( | ||||
Cash proceeds from sale of investments | — | — | | | ||||||
Cash paid for acquisitions, net of cash acquired | ( | — | — | ( | ||||||
Capital expended for property and equipment |
| ( |
| ( | ( | ( | ||||
Other investing activities, net |
| |
| | | | ||||
Net cash provided (used) by investing activities |
| ( |
| | | ( | ||||
Cash flows from financing activities: | ||||||||||
Borrowings of debt |
| |
| | | | ||||
Repayments of debt |
| ( |
| ( | ( | ( | ||||
Series C Liberty SiriusXM stock repurchases | ( | — | — | ( | ||||||
Subsidiary shares repurchased by subsidiary |
| ( |
| — | — | ( | ||||
Cash dividends paid by subsidiary | ( | — | — | ( | ||||||
Taxes paid in lieu of shares issued for stock-based compensation |
| ( |
| — | ( | ( | ||||
Other financing activities, net | | — | | | ||||||
Net cash provided (used) by financing activities |
| ( |
| ( | ( | ( | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
| ( |
| | ( | ( | ||||
Cash, cash equivalents and restricted cash at beginning of period |
| |
| | | | ||||
Cash, cash equivalents and restricted cash at end of period | $ | |
| | | |
11
Notes to Attributed Financial Information (Continued)
(unaudited)
(1) | A tracking stock is a type of common stock that the issuing company intends to reflect or "track" the economic performance of a particular business or "group," rather than the economic performance of the company as a whole. While the Liberty SiriusXM Group, Liberty Braves Group (the “Braves Group”) and Formula One Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Therefore, the Liberty SiriusXM Group, Braves Group and Formula One Group do not represent separate legal entities, but rather represent those businesses, assets and liabilities that have been attributed to each respective group. Holders of tracking stock have no direct claim to the group's stock or assets and therefore, do not own, by virtue of their ownership of a Liberty tracking stock, any equity or voting interest in a company, such as Sirius XM Holdings Inc. (“SIRIUS XM Holdings”), Formula 1 or Live Nation Entertainment, Inc. (“Live Nation”), in which Liberty holds an interest and that is attributed to a Liberty tracking stock group, such as the Liberty SiriusXM Group or the Formula One Group. Holders of tracking stock are also not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation. |
The Liberty SiriusXM Group is comprised of our consolidated subsidiary, SIRIUS XM Holdings, corporate cash, Liberty’s 2.125% Exchangeable Senior Debentures due 2048 and its margin loan obligation incurred by a wholly-owned special purpose subsidiary of Liberty. As of September 30, 2019, the Liberty SiriusXM Group has cash and cash equivalents of approximately $133 million, which includes $79 million of subsidiary cash.
The Braves Group is comprised of our consolidated subsidiary, Braves Holdings, LLC (“Braves Holdings”), which indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC”) and certain assets and liabilities associated with ANLBC’s stadium and mixed use development project (the “Development Project”) and cash. As of September 30, 2019, the Braves Group has cash and cash equivalents of approximately $142 million, which includes $57 million of subsidiary cash.
The Formula One Group is comprised of all of the businesses, assets and liabilities of Liberty other than those specifically attributed to the Liberty SiriusXM Group or the Braves Group, including Liberty’s interests in Formula 1 and Live Nation Entertainment, Inc. (“Live Nation”), a minority equity investment in AT&T Inc., cash, an intergroup interest in the Braves Group, Liberty’s 1.375% Cash Convertible Notes due 2023 and related financial instruments, Liberty’s 2.25% Exchangeable Senior Debentures due 2046 and Liberty’s 1% Cash Convertible Notes due 2023. As of September 30, 2019, the Formula One Group has cash and cash equivalents of approximately $419 million, which includes $354 million of cash held by Formula 1.
The number of notional shares representing the intergroup interest held by the Formula One Group is 9,084,940, representing an approximate 15.1% intergroup interest in the Braves Group as of September 30, 2019. The intergroup interest is a quasi-equity interest which is not represented by outstanding shares of common stock; rather, the Formula One Group has an attributed value in the Braves Group which is generally stated in terms of a number of shares of stock issuable to the Formula One Group with respect to its interest in the Braves Group. Each reporting period, the notional shares representing the intergroup interest are marked to fair value. The change in fair value is recorded in the Unrealized gain (loss) on intergroup interest line item in the unaudited attributed condensed consolidated statements of operations. The Formula One Group’s intergroup interest is reflected in the Investment in intergroup interest line item, and the Braves Group liability for the intergroup interest is reflected in the Redeemable intergroup interest line item in the unaudited attributed condensed consolidated balance sheets. Both accounts are presented as noncurrent, as there are currently no plans for the settlement of the intergroup interest. Appropriate eliminating entries are recorded in the Company’s condensed consolidated financial statements.
As the notional shares underlying the intergroup interest are not represented by outstanding shares of common stock, such shares have not been officially designated Series A, B or C Liberty Braves common stock. However, Liberty has assumed that the notional shares (if and when issued) would be comprised of Series C Liberty Braves common stock in order to not dilute voting percentages. Therefore, the market price of Series C Liberty Braves common stock is used for the quarterly mark-to-market adjustment through the unaudited attributed condensed consolidated statements of operations.
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Notes to Attributed Financial Information (Continued)
(unaudited)
The intergroup interest will remain outstanding until the redemption of the outstanding interest, at the discretion of the Company’s Board of Directors, through transfer of securities, cash and/or other assets from the Braves Group to the Formula One Group.
For information relating to investments in affiliates accounted for using the equity method and debt, see notes 7 and 9, respectively, of the accompanying condensed consolidated financial statements.
(2) | Cash compensation expense for our corporate employees is allocated among the Liberty SiriusXM Group, Braves Group and the Formula One Group based on the estimated percentage of time spent providing services for each group. On an annual basis estimated time spent is determined through an interview process and a review of personnel duties unless transactions significantly change the composition of companies and investments in either respective group which would require a timelier reevaluation of estimated time spent. Other general and administrative expenses are charged directly to the groups whenever possible and are otherwise allocated based on estimated usage or some other reasonably determined methodology. Following the Recapitalization, stock compensation related to each tracking stock is calculated based on actual awards outstanding. |
While we believe that this allocation method is reasonable and fair to each group, we may elect to change the allocation methodology or percentages used to allocate general and administrative expenses in the future.
(3) | The intergroup balance at September 30, 2019 and December 31, 2018 is primarily a result of timing of tax benefits. |
(4) | The Liberty SiriusXM common stock, Liberty Braves common stock and Liberty Formula One common stock have voting and conversion rights under our restated charter. Following is a summary of those rights. Holders of Series A common stock of each group are entitled to one vote per share, and holders of Series B common stock of each group are entitled to ten votes per share. Holders of Series C common stock of each group are entitled to 1/100th of a vote per share in certain limited cases and will otherwise not be entitled to vote. In general, holders of Series A and Series B common stock vote as a single class. In certain limited circumstances, the board may elect to seek the approval of the holders of only Series A and Series B Liberty SiriusXM common stock, only Series A and Series B Liberty Braves common stock, or only Series A and Series B Liberty Formula One common stock. |
At the option of the holder, each share of Series B common stock of each group will be convertible into one share of Series A common stock of the same group. At the discretion of our board, the common stock related to one group may be converted into common stock of the same series that is related to another other group.
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