| Earnings Attributable to Liberty Media Corporation Stockholders Per Common Share |
(5) Earnings Attributable to Liberty Media Corporation Stockholders Per Common Share
Basic earnings (loss) per common share ("EPS") is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding (“WASO”) for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented, including any necessary adjustments to earnings (loss) attributable to shareholders.
Excluded from diluted EPS for the three and six months ended June 30, 2020 are approximately 25 million potentially dilutive shares of Series A and Series C Liberty SiriusXM common stock, 3 million potentially dilutive shares of Series A and Series C Liberty Braves common stock and 12 million potentially dilutive shares of Series A and Series C Liberty Formula One common stock, primarily due to warrants issued in connection with the Bond Hedge Transaction (as defined in note 9), because their inclusion would be antidilutive. The Amended Warrant Transactions (as defined in note 9) may have a dilutive effect with respect to the shares comprising the basket of Liberty’s tracking stocks as specified in the indenture, as amended, related to the Convertible Notes (the “Securities Basket”) underlying the warrants to the extent that the settlement price exceeds the strike price of the warrants, and the warrants are settled in shares comprising such Securities Basket. The warrants and any potential future settlement were reattributed from the Formula One Group to the Liberty SiriusXM Group effective April 22, 2020.
Series A, Series B and Series C Liberty SiriusXM Common Stock
The basic and diluted EPS calculations are based on the following weighted average outstanding shares of common stock.
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Three months ended June 30, |
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Six months ended June 30, |
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2020 (a) |
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2019 (a) |
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2020 (a) |
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2019 (a) |
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numbers of shares in millions |
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Basic WASO |
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328 |
|
329 |
|
326 |
|
331 |
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Potentially dilutive shares |
|
1 |
|
4 |
|
3 |
|
4 |
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Diluted WASO (b) |
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329 |
|
333 |
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329 |
|
335 |
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(a) |
As discussed in note 2, Liberty distributed subscription rights to holders of Liberty SiriusXM common stock, which were priced at a discount to the market value, to acquire additional shares of Liberty SiriusXM common stock. The LSXMK rights offering, because of the discount, is considered a stock dividend and has been reflected retroactively in prior periods for the weighted average shares outstanding. |
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(b) |
As discussed in note 2, the Formula One Group’s intergroup interest in the Liberty SiriusXM Group was eliminated on April 22, 2020 in conjunction with the reattribution. The number of notional Liberty Sirius XM shares representing the intergroup interest held by the Formula One Group was 1,945,491 immediately prior to the reattribution. The intergroup interest was a quasi-equity interest which was not represented by outstanding shares of common stock; rather, the Formula One Group had an attributed value in the Liberty SiriusXM Group
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which was generally stated in terms of a number of shares of stock issuable to the Formula One Group with respect to its interest in the Liberty SiriusXM Group. Each reporting period, the notional shares representing the intergroup interest were marked to fair value. As the notional shares underlying the intergroup interest were not represented by outstanding shares of common stock, such shares had not been officially designated Series A, B or C Liberty SiriusXM common stock. However, Liberty assumed that the notional shares would have been comprised of Series C Liberty SiriusXM common stock in order to not dilute voting percentages. Therefore, the market price of Series C Liberty SiriusXM common stock was used for the quarterly mark-to-market adjustment through the unaudited attributed condensed consolidated statements of operations. The notional shares representing the intergroup interest had no impact on the basic earnings per share weighted average number of shares outstanding. However, in periods where the Liberty SiriusXM Group had net earnings, the notional shares representing the intergroup interest were included in the diluted earnings per share WASO as if the shares had been issued and outstanding during the period. In periods where the Liberty SiriusXM Group had net earnings, an adjustment was also made to the numerator in the diluted earnings per share calculation for the unrealized gain or loss incurred from marking the intergroup interest to fair value during the period as follows: |
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Three months ended June 30, |
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Six months ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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amounts in millions |
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Basic earnings (loss) attributable to Liberty SiriusXM stockholders |
$ |
(88) |
|
167 |
|
126 |
|
228 |
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Unrealized (gain) loss on the intergroup interest |
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(4) |
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NA |
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(35) |
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NA |
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Diluted earnings (loss) attributable to Liberty SiriusXM stockholders |
$ |
(92) |
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167 |
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91 |
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228 |
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Series A, Series B and Series C Liberty Braves Common Stock
The basic and diluted EPS calculations are based on the following weighted average outstanding shares of common stock.
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Three months ended June 30, |
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Six months ended June 30, |
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2020 |
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2019 |
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2020 (a) |
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2019 (a) |
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numbers of shares in millions |
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Basic WASO |
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51 |
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51 |
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51 |
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51 |
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Potentially dilutive shares |
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9 |
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10 |
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9 |
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10 |
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Diluted WASO (b) |
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60 |
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61 |
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60 |
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61 |
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(a) |
Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive. |
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(b) |
Prior to the reattribution, as discussed in note 2, the number of notional Liberty Braves shares representing the Formula One Group’s intergroup interest in the Braves Group was 9,084,940. A portion of this intergroup interest was reattributed to the Liberty SiriusXM Group on April 22, 2020. The number of notional shares representing the intergroup interest in the Braves Group held by the Formula One Group is 6,792,903 and the number of notional shares representing the intergroup interest in the Braves Group held by the Liberty SiriusXM Group is 2,292,037 as of June 30, 2020.
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The intergroup interests are quasi-equity interests which are not represented by outstanding shares of common stock; rather, the Formula One Group and the Liberty SiriusXM Group have attributed values in the Braves Group which are generally stated in terms of a number of shares of stock issuable to the Formula One Group and the Liberty SiriusXM Group with respect to their interests in the Braves Group. Each reporting period, the notional shares representing the intergroup interests are marked to fair value. As the notional shares underlying the intergroup interests 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) related to the Formula One Group interest in the Braves Group would be comprised of Series C Liberty Braves common stock in order to not dilute voting percentages and the notional shares (if and when issued) related to the Liberty SiriusXM Group interest in the Braves Group would be comprised of Series A Liberty Braves common stock since Series A Liberty Braves common stock underly the 1.375% convertible bonds. Therefore, the market prices of Series C Liberty Braves and Series A Liberty Braves common stock are used for the quarterly mark-to-market adjustment for the intergroup interests held by Formula One Group and Liberty SiriusXM Group, respectively, through the unaudited attributed condensed consolidated statements of operations. The notional shares representing the intergroup interests have no impact on the basic WASO. However, the notional shares representing the intergroup interests are included in the diluted WASO as if the shares had been issued and outstanding during the period. In periods where the Liberty Braves Group had net earnings, an adjustment was also made to the numerator in the diluted earnings per share calculation for the unrealized gain or loss incurred from marking the intergroup interests to fair value during the period as follows:
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Three months ended June 30, |
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Six months ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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amounts in millions |
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Basic earnings (loss) attributable to Liberty Braves stockholders |
$ |
(38) |
|
26 |
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15 |
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(45) |
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Unrealized (gain) loss on the intergroup interests |
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7 |
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2 |
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(88) |
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28 |
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Diluted earnings (loss) attributable to Liberty Braves stockholders |
$ |
(31) |
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28 |
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(73) |
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(17) |
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Series A, Series B and Series C Liberty Formula One Common Stock
The basic and diluted EPS calculations are based on the following weighted average outstanding shares of common stock.
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Three months ended June 30, |
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Six months ended June 30, |
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2020 (a) |
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2019 (a) |
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2020 (a) |
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2019 (a) |
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numbers of shares in millions |
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Basic WASO |
|
232 |
|
231 |
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232 |
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231 |
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Potentially dilutive shares |
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5 |
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2 |
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6 |
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2 |
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Diluted WASO (b) |
|
237 |
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233 |
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238 |
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233 |
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(a) |
Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive. |
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(b) |
As discussed in note 2, the number of notional Formula One shares representing the Liberty SiriusXM Group’s intergroup interest in the Formula One Group is 5,271,475 shares as of June 30, 2020. The intergroup interest is a quasi-equity interest which is not represented by outstanding shares of common stock; rather, the Liberty
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SiriusXM Group has an attributed value in the Formula One Group which is generally stated in terms of a number of shares of stock issuable to the Liberty SiriusXM Group with respect to its interest in the Formula One Group. Each reporting period, the notional shares representing the intergroup interest are marked to fair value. 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 Formula One common stock. However, Liberty has assumed that the notional shares (if and when issued) would be comprised of Series A Liberty Formula One common stock since Series A Formula One common stock underly the 1.375% convertible bonds. Therefore, the market price of Series A Liberty Formula One common stock is used for the quarterly mark-to-market adjustment through the unaudited attributed condensed consolidated statements of operations. The notional shares representing the intergroup interest have no impact on the basic WASO. However, the notional shares representing the intergroup interest are included in the diluted WASO as if the shares had been issued and outstanding during the period. In periods where the Formula One Group had net earnings, an adjustment was also made to the numerator in the diluted earnings per share calculation for the unrealized gain or loss incurred from marking the intergroup interest to fair value during the period as follows: |
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Three months ended June 30, |
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Six months ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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amounts in millions |
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Basic earnings (loss) attributable to Formula One stockholders |
$ |
(200) |
|
(77) |
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(543) |
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(225) |
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Unrealized (gain) loss on the intergroup interest |
|
28 |
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NA |
|
28 |
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NA |
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Diluted earnings (loss) attributable to Formula One stockholders |
$ |
(172) |
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(77) |
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(515) |
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(225) |
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