Liberty Media Corporation Reports Fourth Quarter and Year End 2019 Financial Results

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ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Liberty Media Corporation (“Liberty Media” or “Liberty”) (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported fourth quarter and year end 2019 results. Headlines include(1):

  • Attributed to Liberty SiriusXM Group
    • SiriusXM reported strong full year 2019 results
      • Self-pay net subscriber additions of one million plus for 10th consecutive year
      • 2019 revenue increased to $7.8 billion; pro forma revenue increased 8% to $7.9 billion
      • Full-year net income of $914 million; diluted EPS of $0.20
      • Adjusted EBITDA(2) hit record $2.4 billion, up 14%
      • SiriusXM capital returns in 2019 totaled $2.4 billion
      • SiriusXM confirmed 2020 guidance
    • Liberty Media’s ownership of SiriusXM stood at 71.6% as of January 31st
    • From November 1st through January 31st, Liberty SiriusXM Group repurchased 1.2 million LSXMA/K shares for total cash consideration of $55 million
  • Attributed to Formula One Group
    • Audience figures increased across TV and digital platforms in 2019 for third consecutive year
      • Cumulative TV viewers up 9% to 1.9 billion
      • Social media followers increased 33% to 24.9 million
    • Aggregate attendance at races grew 2% to 4.2 million in 2019
      • Average attendance per race weekend increased 2% to over 200,000
    • 2020 season marks F1’s 70th anniversary and begins March 15th in Melbourne
    • From November 1st through January 31st, Formula One Group purchased 1.1 million LSXMA/K shares for total cash consideration of $52 million
  • Attributed to Braves Group
    • Baseball revenue grew 8% to $438 million in 2019
    • Regular season tickets sold increased to 2.7 million in 2019

“2019 was a strong year for our companies,” said Greg Maffei, Liberty Media President and CEO. “SiriusXM marked ten consecutive years of adding one million plus self-pay net subscribers and returned capital of nearly $2.4 billion in 2019. Formula 1 produced exceptional financial results, added viewers and grew race attendance. The Braves also had the highest ticket sales since 2007.”

Operating Results

Unless otherwise noted, the following discussion compares financial information for the three months or year ended December 31, 2019 to the same period in 2018.

LIBERTY SIRIUSXM GROUP – The following table provides the financial results attributed to Liberty SiriusXM Group for the fourth quarter and full year 2019. Approximately $12 million and $34 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Liberty SiriusXM Group in the fourth quarter and full year 2019, respectively.

 

 

Three months ended

 

 

 

 

 

 

Twelve months ended

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

December 31,

 

 

 

 

 

 

2018

 

2019

 

% Change

 

 

2018

 

2019

 

% Change

 

 

amounts in millions

 

 

 

 

 

 

amounts in millions

 

 

 

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sirius XM Holdings

 

$

 

1,496

 

 

$

 

2,062

 

 

 

38

 

%

 

 

$

 

5,771

 

 

$

 

7,794

 

 

 

35

 

%

Total Liberty SiriusXM Group

 

$

 

1,496

 

 

$

 

2,062

 

 

 

38

 

%

 

 

$

 

5,771

 

 

$

 

7,794

 

 

 

35

 

%

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sirius XM Holdings

 

 

442

 

 

 

382

 

 

 

(14

)

%

 

 

 

1,659

 

 

 

1,578

 

 

 

(5

)

%

Corporate and other

 

 

(6

)

 

 

(12

)

 

 

(100

)

%

 

 

 

(39

)

 

 

(34

)

 

 

13

 

%

Total Liberty SiriusXM Group

 

$

 

436

 

 

$

 

370

 

 

 

(15

)

%

 

 

$

 

1,620

 

 

$

 

1,544

 

 

 

(5

)

%

Adjusted OIBDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sirius XM Holdings

 

 

574

 

 

 

582

 

 

 

1

 

%

 

 

 

2,233

 

 

 

2,453

 

 

 

10

 

%

Corporate and other

 

 

(1

)

 

 

(7

)

 

 

(600

)

%

 

 

 

(16

)

 

 

(17

)

 

 

(6

)

%

Total Liberty SiriusXM Group

 

$

 

573

 

 

$

 

575

 

 

 

—

 

%

 

 

$

 

2,217

 

 

$

 

2,436

 

 

 

10

 

%

SiriusXM’s financial results above include the results of Pandora beginning February 1, 2019, the date Pandora was acquired by SiriusXM. Pro forma results for SiriusXM including Pandora for all periods presented, including adjustments related to amortization of acquired intangible assets, depreciation of property and equipment, acquisition costs, fair value of gain or loss on the Pandora investment and associated tax impacts, can be found in Liberty Media’s Form 10-K for the year ended December 31, 2019.

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 fourth quarter and full year results on February 4, 2020. For additional detail on SiriusXM’s financial results, 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 Formula One Group holds an approximate 0.3% intergroup interest in the Liberty SiriusXM Group as of January 31, 2020. Assuming the issuance of the shares underlying the intergroup interest held by the Formula One Group, the Liberty SiriusXM Group outstanding share count as of January 31, 2020 would have been 316 million.

The businesses and assets attributed to Liberty SiriusXM Group consist primarily of Liberty Media’s interest in SiriusXM, which includes its subsidiary Pandora.

FORMULA ONE GROUP – The following table provides the financial results attributed to the Formula One Group for the fourth quarter and full year 2019. Approximately $15 million and $44 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Formula One Group in the fourth quarter and full year 2019, respectively.

“Formula 1 continues to benefit from the investments made in the business over the past few years. We see this in the strong financial results, viewership, attendance and engagement. 2020 marks the 70th anniversary of the sport, which will provide further momentum,” said Chase Carey, Formula 1 Chairman and CEO. “We are excited to welcome two new Grands Prix to the calendar in Vietnam and the Netherlands and look forward to the debut of the second season of the Netflix series ‘Formula 1: Drive to Survive’ on February 28th.”

 

 

Three months ended

 

 

Twelve months ended

 

 

December 31,

 

 

December 31,

 

 

2018

 

2019

 

 

2018

 

2019

 

 

amounts in millions

 

 

amounts in millions

Formula One Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Formula 1

 

$

 

481

 

 

$

 

523

 

 

 

$

 

1,827

 

 

$

 

2,022

 

Total Formula One Group

 

$

 

481

 

 

$

 

523

 

 

 

$

 

1,827

 

 

$

 

2,022

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Formula 1

 

$

 

(12

)

 

$

 

(6

)

 

 

$

 

(68

)

 

$

 

17

 

Corporate and other

 

 

(17

)

 

 

(17

)

 

 

 

(42

)

 

 

(52

)

Total Formula One Group

 

$

 

(29

)

 

$

 

(23

)

 

 

$

 

(110

)

 

$

 

(35

)

Adjusted OIBDA

 

 

 

 

 

 

 

 

 

 

 

 

 

Formula 1

 

$

 

105

 

 

$

 

110

 

 

 

$

 

400

 

 

$

 

482

 

Corporate and other

 

 

(13

)

 

 

(13

)

 

 

 

(25

)

 

 

(36

)

Total Formula One Group

 

$

 

92

 

 

$

 

97

 

 

 

$

 

375

 

 

$

 

446

 

The following table provides the operating results of Formula 1 (“F1”).

F1 Operating Results

 

Three months ended

 

 

 

 

 

Twelve months ended

 

 

 

 

December 31,

 

 

 

 

 

December 31,

 

 

 

 

2018

 

2019

 

% Change

 

2018

 

2019

 

% Change

 

(unaudited)

 

 

 

 

(unaudited)

 

 

 

amounts in USD millions

 

 

 

 

amounts in USD millions

 

 

Primary Formula 1 revenue

$

 

351

 

 

$

 

382

 

 

9

 

%

 

$

 

1,487

 

 

$

 

1,664

 

 

12

 

%

Other Formula 1 revenue

 

130

 

 

 

141

 

 

8

 

%

 

 

340

 

 

 

358

 

 

5

 

%

Total Formula 1 revenue

$

 

481

 

 

$

 

523

 

 

9

 

%

 

$

 

1,827

 

 

$

 

2,022

 

 

11

 

%

Operating expenses (excluding stock-based compensation included below):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Team payments

 

(217

)

 

 

(246

)

 

(13

)

%

 

 

(913

)

 

 

(1,012

)

 

(11

)

%

Other cost of Formula 1 revenue

 

(111

)

 

 

(124

)

 

(12

)

%

 

 

(360

)

 

 

(381

)

 

(6

)

%

Cost of Formula 1 revenue

$

 

(328

)

 

$

 

(370

)

 

(13

)

%

 

$

 

(1,273

)

 

$

 

(1,393

)

 

(9

)

%

Selling, general and administrative expenses

 

(48

)

 

 

(43

)

 

10

 

%

 

 

(154

)

 

 

(147

)

 

5

 

%

Adjusted OIBDA

$

 

105

 

 

$

 

110

 

 

5

 

%

 

$

 

400

 

 

$

 

482

 

 

21

 

%

Stock-based compensation

 

(4

)

 

 

(4

)

 

—

%

 

 

(16

)

 

 

(19

)

 

(19

)

%

Depreciation and Amortization

 

(113

)

 

 

(112

)

 

1

 

%

 

 

(452

)

 

 

(446

)

 

1

 

%

Operating income (loss)

$

 

(12

)

 

 

(6

)

 

50

 

%

 

$

 

(68

)

 

 

17

 

 

125

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of races in period

 

5

 

 

 

5

 

 

 

 

 

 

21

 

 

 

21

 

 

 

 

Primary F1 revenue represents the majority of F1’s revenue and is derived from (i) race promotion fees, (ii) broadcasting fees and (iii) advertising and sponsorship fees. For the year ended December 31, 2019, these revenue streams comprised 30%, 38% and 15%, respectively, of total F1 revenue.

Primary F1 revenue grew in both the fourth quarter and full year 2019. Broadcast revenue increased in the fourth quarter and full year due to contractual rate increases, partially offset by the impact of weaker foreign exchange rates. Advertising and sponsorship revenue was relatively flat in the fourth quarter, and advertising and sponsorship revenue grew in the full year due to revenue from new sponsorship agreements. Growth in these revenue streams was partially offset by a decline in race promotion revenue in both the fourth quarter and full year. The fourth quarter decline in race promotion revenue was primarily due to the renewal terms of one contract, and the full year decline was driven by the impact of renewal terms of two contracts and weaker prevailing foreign exchange rates.

Other F1 revenue increased in the fourth quarter and full year 2019 driven by increases in digital media revenue, higher Paddock Club attendance, increased revenue from other event-based activities and higher sales of equipment, parts and maintenance to F2 and F3 teams.

Operating income grew in the fourth quarter and full year 2019. Adjusted OIBDA increased in the fourth quarter and full year due to the aforementioned revenue growth, partially offset by elevated costs. Team payments increased in the fourth quarter and full year driven by the growth in F1 revenue and the associated impact on variable elements of team payments. Other cost of F1 revenue increased in the fourth quarter and full year due to various technical initiatives, the continued further development and delivery of digital and social media products and platforms, increased costs related to the sale of equipment, parts, maintenance and other services provided to F2 and F3 teams and higher FIA fees. Selling, general and administrative expense decreased in the fourth quarter and full year driven by lower bad debt expense and foreign exchange gains, partially offset by higher personnel and information technology costs.

F1’s total net debt to covenant OIBDA ratio, as defined in F1’s credit facilities for covenant calculations, was approximately 5.1x as of December 31, 2019, as compared to a maximum allowable leverage ratio of 8.25x.

The businesses and assets attributed to the Formula One Group consist of Liberty Media’s subsidiary F1, its interest in Live Nation, minority equity investments and intergroup interests in the Braves Group and Liberty SiriusXM Group. There are approximately 9.1 million notional shares underlying the Formula One Group’s 15.1% intergroup interest in the Braves Group and approximately 1.1 million notional shares underlying the Formula One Group’s 0.3% intergroup interest in the Liberty SiriusXM Group as of January 31, 2020.

BRAVES GROUP - The following table provides the financial results attributed to the Braves Group for the fourth quarter and full year 2019. Approximately $1 million and $7 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Braves Group in the fourth quarter and full year 2019, respectively.

 

 

Three months ended

 

 

Twelve months ended

 

 

December 31,

 

 

December 31,

 

 

2018

 

2019

 

 

2018

 

2019

 

 

amounts in millions

 

 

amounts in millions

Braves Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

$

32

 

 

$

34

 

 

 

$

442

 

$

476

 

Total Braves Group

 

$

32

 

 

$

34

 

 

 

$

442

 

$

476

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

(28

)

 

 

(45

)

 

 

 

1

 

 

(39

)

Total Braves Group

 

$

(28

)

 

$

(45

)

 

 

$

1

 

$

(39

)

Adjusted OIBDA

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

(12

)

 

 

(24

)

 

 

 

88

 

 

49

 

Total Braves Group

 

$

(12

)

 

$

(24

)

 

 

$

88

 

$

49

 

The following table provides the operating results of Braves Holdings, LLC (“Braves”).

Braves Operating Results

 

Three months ended

 

 

 

 

Twelve months ended

 

 

 

 

 

December 31,

 

 

 

 

December 31,

 

 

 

 

 

2018

 

2019

 

% Change

 

2018

 

2019

 

% Change

 

amounts in millions

 

 

 

 

 

 

 

 

 

Baseball revenue

$

22

 

 

$

23

 

 

5

 

%

 

$

404

 

 

$

438

 

 

8

 

%

Development revenue

 

10

 

 

 

11

 

 

10

 

%

 

 

38

 

 

 

38

 

 

—

%

Total revenue

$

32

 

 

$

34

 

 

6

 

%

 

$

442

 

 

$

476

 

 

8

 

%

Operating expenses (excluding stock-based compensation included below):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

(18

)

 

 

(35

)

 

(94

)

%

 

 

(265

)

 

 

(340

)

 

(28

)

%

Selling, general and administrative expenses

 

(25

)

 

 

(22

)

 

12

 

%

 

 

(83

)

 

 

(82

)

 

1

 

%

Adjusted OIBDA

$

(11

)

 

$

(23

)

 

(109

)

%

 

$

94

 

 

$

54

 

 

(43

)

%

Stock-based compensation

 

(2

)

 

 

(4

)

 

(100

)

%

 

 

(10

)

 

 

(15

)

 

(50

)

%

Depreciation and Amortization

 

(13

)

 

 

(17

)

 

(31

)

%

 

 

(76

)

 

 

(71

)

 

7

 

%

Operating income (loss)

$

(26

)

 

$

(44

)

 

(69

)

%

 

$

8

 

 

$

(32

)

 

500

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regular season home games in period

 

—

 

 

—

 

 

 

 

 

81

 

 

 

81

 

 

 

 

Postseason home games in period

 

2

 

 

 

3

 

 

 

 

 

 

2

 

 

 

3

 

 

 

 

Baseball revenue per home game(1)

 

NA

 

 

NA

 

 

 

 

$

5.0

 

 

$

5.4

 

 

 

 

 

(1)

Baseball revenue per regular season home game.

Baseball revenue is comprised of (i) ballpark operations (ticket sales, concessions, corporate sales, retail, suites, premium seat fees and postseason), (ii) local broadcast rights and (iii) national broadcast rights, licensing and other shared MLB revenue streams. Development revenue is derived from the Battery Atlanta mixed-use facilities and primarily includes rental income.

Baseball revenue grew in the fourth quarter due to three postseason home games held in 2019 compared to two in the prior year. For the full year 2019, baseball revenue grew primarily due to increased ballpark operations revenue driven by higher attendance as well as growth in local and national broadcast rights. Development revenue grew modestly in the fourth quarter primarily due to increased retail tenant rental income. For the full year 2019, development revenue was flat despite the absence of revenue from the residential portion of the Battery in the current year due to its sale on October 9, 2018.

Operating loss grew and adjusted OIBDA declined in the fourth quarter and full year 2019. Revenue growth was more than offset by growth in operating expenses due to higher player salaries, increased baseball operations costs related to the new spring training facility and higher player development costs, increased obligations under MLB’s revenue sharing plan and higher concession related costs due to increased attendance.

The Formula One Group holds an approximate 15.1% intergroup interest in the Braves Group as of January 31, 2020. Assuming the issuance of the shares underlying the intergroup interest held by the Formula One Group, the Braves Group outstanding share count as of January 31, 2020 would have been 60 million.

The businesses and assets attributed to the Braves Group consist primarily of Liberty Media’s subsidiary the Braves, which indirectly owns the Atlanta Braves Major League Baseball Club, six minor league baseball clubs and certain assets and liabilities associated with the Braves’ ballpark and mixed-use development project.

Share Repurchases

From November 1, 2019 through January 31, 2020, Liberty SiriusXM Group repurchased approximately 709 thousand Series C Liberty SiriusXM shares (Nasdaq: LSXMK) at an average cost per share of $47.45 for total cash consideration of $33 million and repurchased approximately 446 thousand Series A Liberty SiriusXM shares (Nasdaq: LSXMA) at an average cost per share of $48.74 for total cash consideration of $22 million.

From November 1, 2019 through January 31, 2020, Formula One Group purchased approximately 636 thousand Series C Liberty SiriusXM shares (Nasdaq: LSXMK) at an average cost per share of $47.71 for total cash consideration of $30 million and purchased approximately 446 thousand Series A Liberty SiriusXM shares (Nasdaq: LSXMA) at an average cost per share of $48.74 for total cash consideration of $22 million.

The total remaining repurchase authorization for Liberty Media as of February 1, 2020 is approximately $1.3 billion and can be applied to repurchases of Series A and Series C shares of any of the Liberty Media Corporation tracking stocks.

FOOTNOTES

1)

Liberty Media's President and CEO, Greg Maffei, will discuss these highlights and other matters in Liberty Media's earnings conference call which will begin at 10:00 a.m. (E.S.T.) on February 26, 2020. For information regarding how to access the call, please see “Important Notice” later in this document.

2)

For definitions of adjusted OIBDA (as defined by Liberty Media) and adjusted EBITDA (as defined by SiriusXM) and applicable reconciliations, see the accompanying schedules.

NOTES

The following financial information with respect to Liberty Media's equity affiliates and available for sale securities is intended to supplement Liberty Media's consolidated balance sheet and statement of operations to be included in its Form 10-K for the year ended December 31, 2019.

Fair Value of Corporate Public Holdings

 

 

 

 

 

 

 

(amounts in millions)

 

9/30/2019

 

12/31/2019

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

iHeart(1)

 

$

105

 

$

118

 

Total Liberty SiriusXM Group

 

$

105

 

$

118

 

Formula One Group

 

 

 

 

 

 

 

Live Nation Investment(2)

 

 

4,620

 

 

4,978

 

Other Public Holdings(3)

 

 

288

 

 

242

 

Total Formula One Group

 

$

4,908

 

$

5,220

 

Braves Group

 

 

N/A

 

 

N/A

 

Total Liberty Media

 

$

5,013

 

$

5,338

 

 

(1)

Includes fair value of iHeart shares and warrants which are included in other long-term assets.

(2)

Represents the fair value of the equity investment attributed to Formula One Group. 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 consolidated balance sheet at $792 million and $746 million as of September 30, 2019 and December 31, 2019, respectively.

(3)

Represents the carrying value of other public holdings which are accounted for at fair value. Excludes Braves Group and Liberty SiriusXM Group intergroup interests.

Cash and Debt

The following presentation is provided to separately identify cash and liquid investments and debt information.

(amounts in millions)

 

9/30/2019

 

12/31/2019

 

Cash, Cash Equivalents and Restricted Cash Attributable to:

 

 

 

 

 

 

 

Liberty SiriusXM Group(1)(2)

 

$

144

 

 

$

507

 

 

Formula One Group(3)

 

 

419

 

 

 

587

 

 

Braves Group(2)

 

 

210

 

 

 

212

 

 

Total Consolidated Cash, Cash Equivalents and Restricted Cash (GAAP)

 

$

773

 

 

$

1,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt:

 

 

 

 

 

 

 

SiriusXM senior notes(4)

 

$

7,750

 

 

$

7,750

 

 

Pandora convertible senior notes

 

 

194

 

 

 

194

 

 

2.125% exchangeable senior debentures due 2048(5)

 

 

400

 

 

 

400

 

 

2.75% exchangeable senior debentures due 2049(5)

 

 

—

 

 

604

 

 

Margin loans

 

 

550

 

 

 

350

 

 

Other subsidiary debt(6)

 

 

65

 

 

 

—

 

Total Attributed Liberty SiriusXM Group Debt

 

$

8,959

 

 

$

9,298

 

 

Unamortized discount, fair market value adjustment and deferred loan costs

 

 

(102

)

 

 

(53

)

 

Total Attributed Liberty SiriusXM Group Debt (GAAP)

 

$

8,857

 

 

$

9,245

 

 

 

 

 

 

 

 

 

 

1.375% cash convertible notes due 2023(5)

 

 

1,000

 

 

 

1,000

 

 

1% cash convertible notes due 2023(5)

 

 

450

 

 

 

450

 

 

2.25% exchangeable senior debentures due 2046(5)

 

 

210

 

 

 

208

 

 

2.25% exchangeable senior debentures due 2048(5)

 

 

385

 

 

 

385

 

 

Live Nation margin loan

 

 

—

 

 

130

 

 

Formula 1 bank loan

 

 

2,902

 

 

 

2,902

 

 

Other corporate level debt

 

 

32

 

 

 

32

 

 

Total Attributed Formula One Group Debt

 

$

4,979

 

 

$

5,107

 

 

Fair market value adjustment

 

 

350

 

 

 

570

 

 

Total Attributed Formula One Group Debt (GAAP)

 

$

5,329

 

 

$

5,677

 

 

Formula 1 leverage(7)

 

 

5.3x

 

 

5.1x

 

 

 

 

 

 

 

 

 

Atlanta Braves debt

 

 

540

 

 

 

559

 

 

Total Attributed Braves Group Debt

 

$

540

 

 

$

559

 

 

Deferred loan costs

 

 

(5

)

 

 

(5

)

 

Total Attributed Braves Group Debt (GAAP)

 

$

535

 

 

$

554

 

 

 

 

 

 

 

 

 

 

Total Liberty Media Corporation Debt (GAAP)

 

$

14,721

 

 

$

15,476

 

 

 

(1)

Includes $90 million and $120 million of cash, liquid investments and restricted cash held at SiriusXM as of September 30, 2019 and December 31, 2019, respectively.

(2)

Includes restricted cash held in reserves pursuant to the terms of various financial obligations.

(3)

Includes $354 million and $402 million of cash and liquid investments held at Formula 1 as of September 30, 2019 and December 31, 2019, respectively.

(4)

Outstanding principal amount of Senior Notes with no reduction for the net unamortized discount.

(5)

Face amount of the cash convertible notes and exchangeable debentures with no fair market value adjustment.

(6)

Includes SiriusXM revolving credit facility.

(7)

Net debt to covenant OIBDA ratio of F1 operating business as defined in F1’s credit facilities for covenant calculations.

Total cash, liquid investments and restricted cash attributed to Liberty SiriusXM Group increased $363 million during the fourth quarter as additional borrowing at Liberty SiriusXM and cash from operations at SiriusXM more than offset return of capital at both SiriusXM and Liberty SiriusXM. Included in the cash, liquid investments and restricted cash balance attributed to Liberty SiriusXM Group at December 31, 2019 is $120 million at SiriusXM. Although SiriusXM is a consolidated subsidiary, it is a separate public company with a significant non-controlling interest, therefore Liberty Media does not have ready access to SiriusXM’s cash balance.

Total debt attributed to Liberty SiriusXM Group increased $339 million during the fourth quarter due to additional debt raised at Liberty SiriusXM Group. On November 26, 2019, Liberty Media closed a private offering of approximately $604 million of 2.75% exchangeable senior debentures due 2049. The number of shares of SiriusXM common stock attributable to a debenture represents an initial exchange price of $8.62 per share. A total of approximately 70 million shares of SiriusXM common stock are attributable to the debentures. Net proceeds are expected to be used for general corporate purposes.

Total cash and liquid investments attributed to Formula One Group increased $168 million during the fourth quarter, primarily as a result of net borrowings and operating cash flow at F1, partially offset by Formula One Group’s purchase of Liberty SiriusXM Group shares. Cash at F1 increased in the fourth quarter due to increased operating cash flow, partially offset by interest paid during the quarter.

Total debt attributed to Formula One Group increased $128 million during the quarter due to drawing down on the Live Nation margin loan to fund purchases of Liberty SiriusXM Group stock.

Total cash, liquid investments and restricted cash attributed to the Braves Group was relatively flat in the quarter as capital expenditures related to the mixed-use development was offset by cash from operations and borrowings during the quarter.

Total debt attributed to the Braves Group increased $19 million during the fourth quarter primarily due to additional borrowing to fund the second phase of the mixed-use development. The second phase of the Battery Atlanta mixed-use development is expected to cost approximately $200 million, which the Braves and affiliated entities expect to fund through a mix of approximately $55 million in equity and approximately $145 million in net debt.

Important Notice: Liberty Media Corporation (Nasdaq: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) President and CEO, Greg Maffei, will discuss Liberty Media's earnings release in a conference call which will begin at 10:00 a.m. (E.S.T.) on February 26, 2020. The call can be accessed by dialing (800) 458-4121 or (720) 543-0206, passcode 8907538, 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 http://www.libertymedia.com/events. 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, Formula 1’s race calendar and new races, costs and funding associated with the Battery Atlanta mixed-use development and new Braves facilities, 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 (including SiriusXM’s acquisition of Pandora), rapid technological and industry change, failure of third parties to perform, changes in consumer protection laws and their enforcement, continued access to capital on terms acceptable to Liberty Media and changes in law and market conditions conducive to stock repurchases. 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 the most recent Form 10-K, 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

December 31, 2019 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

 

 

 

 

 

Liberty SiriusXM

 

Braves

 

Formula One

 

Inter-Group

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Eliminations

 

Liberty

 

 

 

amounts in millions

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

493

 

 

142

 

 

587

 

 

—

 

1,222

 

 

Trade and other receivables, net

 

 

670

 

 

28

 

 

69

 

 

—

 

767

 

 

Other current assets

 

 

227

 

 

97

 

 

92

 

 

—

 

416

 

 

Total current assets

 

 

1,390

 

 

267

 

 

748

 

 

—

 

2,405

 

 

Intergroup interests

 

 

—

 

—

 

292

 

 

(292

)

 

—

 

Investments in affiliates, accounted for using the equity method

 

 

644

 

 

99

 

 

882

 

 

—

 

1,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, at cost

 

 

2,686

 

 

923

 

 

171

 

 

—

 

3,780

 

 

Accumulated depreciation

 

 

(1,331

)

 

(128

)

 

(59

)

 

—

 

(1,518

)

 

 

 

 

1,355

 

 

795

 

 

112

 

 

—

 

2,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets not subject to amortization

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

15,803

 

 

180

 

 

3,956

 

 

—

 

19,939

 

 

FCC licenses

 

 

8,600

 

 

—

 

—

 

—

 

8,600

 

 

Other

 

 

1,262

 

 

143

 

 

—

 

—

 

1,405

 

 

 

 

 

25,665

 

 

323

 

 

3,956

 

 

—

 

29,944

 

 

Intangible assets subject to amortization, net

 

 

1,603

 

 

34

 

 

4,303

 

 

—

 

5,940

 

 

Other assets

 

 

764

 

 

75

 

 

1,212

 

 

(38

)

 

2,013

 

 

Total assets

 

$

31,421

 

 

1,593

 

 

11,505

 

 

(330

)

 

44,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Intergroup payable (receivable)

 

$

(23

)

 

(9

)

 

32

 

 

—

 

—

 

Accounts payable and accrued liabilities

 

 

1,294

 

 

63

 

 

264

 

 

—

 

1,621

 

 

Current portion of debt

 

 

1

 

 

59

 

 

—

 

—

 

60

 

 

Deferred revenue

 

 

1,930

 

 

70

 

 

113

 

 

—

 

2,113

 

 

Other current liabilities

 

 

72

 

 

5

 

 

17

 

 

—

 

94

 

 

Total current liabilities

 

 

3,274

 

 

188

 

 

426

 

 

—

 

3,888

 

 

Long-term debt

 

 

9,244

 

 

495

 

 

5,677

 

 

—

 

15,416

 

 

Deferred income tax liabilities

 

 

1,890

 

 

61

 

 

—

 

(38

)

 

1,913

 

 

Redeemable intergroup interest

 

 

24

 

 

268

 

 

—

 

(292

)

 

—

 

Other liabilities

 

 

683

 

 

203

 

 

161

 

 

—

 

1,047

 

 

Total liabilities

 

 

15,115

 

 

1,215

 

 

6,264

 

 

(330

)

 

22,264

 

 

Equity / Attributed net assets

 

 

10,678

 

 

378

 

 

5,239

 

 

—

 

16,295

 

 

Noncontrolling interests in equity of subsidiaries

 

 

5,628

 

 

—

 

2

 

 

—

 

5,630

 

 

Total liabilities and equity

$

31,421

1,593

11,505

 

(330

)

44,189

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF OPERATIONS

Twelve months ended December 31, 2019 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

 

 

Liberty SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Sirius XM Holdings revenue

 

$

7,794

 

 

—

 

—

 

7,794

 

 

Formula 1 revenue

 

 

—

 

—

 

2,022

 

 

2,022

 

 

Other revenue

 

 

—

 

476

 

 

—

 

476

 

 

Total revenue

 

 

7,794

 

 

476

 

 

2,022

 

 

10,292

 

 

Operating costs and expenses, including stock-based compensation:

 

 

 

 

 

 

 

 

 

 

Cost of services (exclusive of depreciation shown separately below):

 

 

 

 

 

 

 

 

 

 

Revenue share and royalties

 

 

2,291

 

 

—

 

—

 

2,291

 

 

Programming and content

 

 

462

 

 

—

 

—

 

462

 

 

Customer service and billing

 

 

475

 

 

—

 

—

 

475

 

 

Other

 

 

199

 

 

—

 

—

 

199

 

 

Cost of Formula 1 revenue

 

 

—

 

—

 

1,394

 

 

1,394

 

 

Subscriber acquisition costs

 

 

427

 

 

—

 

—

 

427

 

 

Other operating expenses

 

 

280

 

 

340

 

 

—

 

620

 

 

Selling, general and administrative

 

 

1,495

 

 

104

 

 

210

 

 

1,809

 

 

Acquisition and other related costs

 

 

84

 

 

—

 

—

 

84

 

 

Depreciation and amortization

 

 

537

 

 

71

 

 

453

 

 

1,061

 

 

 

 

 

6,250

 

 

515

 

 

2,057

 

 

8,822

 

 

Operating income (loss)

 

 

1,544

 

 

(39

)

 

(35

)

 

1,470

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(435

)

 

(27

)

 

(195

)

 

(657

)

 

Share of earnings (losses) of affiliates, net

 

 

(24

)

 

18

 

 

12

 

 

6

 

 

Unrealized gain/(loss) on inter-group interests

 

 

—

 

(42

)

 

42

 

 

—

 

Realized and unrealized gains (losses) on financial instruments, net

 

 

(41

)

 

(4

)

 

(270

)

 

(315

)

 

Other, net

 

 

(38

)

 

2

 

 

45

 

 

9

 

 

 

 

 

(538

)

 

(53

)

 

(366

)

 

(957

)

 

Earnings (loss) before income taxes

 

 

1,006

 

 

(92

)

 

(401

)

 

513

 

 

Income tax (expense) benefit

 

 

(271

)

 

15

 

 

90

 

 

(166

)

 

Net earnings (loss)

 

 

735

 

 

(77

)

 

(311

)

 

347

 

 

Less net earnings (loss) attributable to the noncontrolling interests

 

 

241

 

 

—

 

—

 

241

 

 

Net earnings (loss) attributable to Liberty stockholders

 

$

494

 

 

(77

)

 

(311

)

 

106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Programming and content

 

 

30

 

 

—

 

—

 

30

 

 

Customer service and billing

 

 

4

 

 

—

 

—

 

4

 

 

Other costs of services

 

 

9

 

 

—

 

—

 

9

 

 

Operating

 

 

49

 

 

—

 

—

 

49

 

 

Selling, general and administrative

 

 

154

 

 

17

 

 

28

 

 

199

 

 

Stock compensation expense

$

246

 

17

 

28

 

291

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF OPERATIONS

Twelve months ended December 31, 2018 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

 

 

Liberty SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Sirius XM Holdings revenue

 

$

5,771

 

 

—

 

—

 

5,771

 

 

Formula 1 revenue

 

 

—

 

—

 

1,827

 

 

1,827

 

 

Other revenue

 

 

—

 

442

 

 

—

 

442

 

 

Total revenue

 

 

5,771

 

 

442

 

 

1,827

 

 

8,040

 

 

Operating costs and expenses, including stock-based compensation:

 

 

 

 

 

 

 

 

 

 

Cost of services (exclusive of depreciation shown separately below):

 

 

 

 

 

 

 

 

 

 

Revenue share and royalties

 

 

1,394

 

 

—

 

—

 

1,394

 

 

Programming and content

 

 

406

 

 

—

 

—

 

406

 

 

Customer service and billing

 

 

382

 

 

—

 

—

 

382

 

 

Other

 

 

126

 

 

—

 

—

 

126

 

 

Cost of Formula 1 revenue

 

 

—

 

—

 

1,273

 

 

1,273

 

 

Subscriber acquisition costs

 

 

470

 

 

—

 

—

 

470

 

 

Other operating expenses

 

 

123

 

 

265

 

 

—

 

388

 

 

Selling, general and administrative

 

 

878

 

 

100

 

 

204

 

 

1,182

 

 

Acquisition and other related costs

 

 

3

 

 

—

 

—

 

3

 

 

Depreciation and amortization

 

 

369

 

 

76

 

 

460

 

 

905

 

 

 

 

 

4,151

 

 

441

 

 

1,937

 

 

6,529

 

 

Operating income (loss)

 

 

1,620

 

 

1

 

 

(110

)

 

1,511

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(388

)

 

(26

)

 

(192

)

 

(606

)

 

Share of earnings (losses) of affiliates, net

 

 

(11

)

 

12

 

 

17

 

 

18

 

 

Unrealized gain/(loss) on inter-group interests

 

 

—

 

(24

)

 

24

 

 

—

 

Realized and unrealized gains (losses) on financial instruments, net

 

 

(1

)

 

(2

)

 

43

 

 

40

 

 

Other, net

 

 

25

 

 

35

 

 

18

 

 

78

 

 

 

 

 

(375

)

 

(5

)

 

(90

)

 

(470

)

 

Earnings (loss) before income taxes

 

 

1,245

 

 

(4

)

 

(200

)

 

1,041

 

 

Income tax (expense) benefit

 

 

(241

)

 

15

 

 

50

 

 

(176

)

 

Net earnings (loss)

 

 

1,004

 

 

11

 

 

(150

)

 

865

 

 

Less net earnings (loss) attributable to the noncontrolling interests

 

 

328

 

 

6

 

 

—

 

334

 

 

Net earnings (loss) attributable to Liberty stockholders

 

$

676

 

 

5

 

 

(150

)

 

531

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Programming and content

 

 

28

 

 

—

 

—

 

28

 

 

Customer service and billing

 

 

4

 

 

—

 

—

 

4

 

 

Other

 

 

5

 

 

—

 

—

 

5

 

 

Other operating expenses

 

 

17

 

 

—

 

—

 

17

 

 

Selling, general and administrative

 

 

102

 

 

11

 

 

25

 

 

138

 

 

Stock compensation expense

 

$

156

 

 

11

 

 

25

 

 

192

 

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF CASH FLOWS INFORMATION

Twelve months ended December 31, 2019 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

 

 

Liberty SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

735

 

 

(77

)

 

(311

)

 

347

 

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

537

 

 

71

 

 

453

 

 

1,061

 

 

Stock-based compensation

 

 

267

 

 

17

 

 

28

 

 

312

 

 

Share of (earnings) loss of affiliates, net

 

 

24

 

 

(18

)

 

(12

)

 

(6

)

 

Unrealized (gains) losses on intergroup interests, net

 

 

—

 

42

 

 

(42

)

 

—

 

Realized and unrealized (gains) losses on financial instruments, net

 

 

41

 

 

4

 

 

270

 

 

315

 

 

Noncash interest expense

 

 

7

 

 

1

 

 

1

 

 

9

 

 

Losses (gains) on dilution of investment in affiliate

 

 

—

 

—

 

(7

)

 

(7

)

 

Loss on early extinguishment of debt

 

 

57

 

 

—

 

—

 

57

 

 

Deferred income tax expense (benefit)

 

 

268

 

 

(7

)

 

(141

)

 

120

 

 

Intergroup tax allocation

 

 

(21

)

 

(8

)

 

29

 

 

—

 

Intergroup tax (payments) receipts

 

 

(3

)

 

21

 

 

(18

)

 

—

 

Other charges (credits), net

 

 

4

 

 

18

 

 

(14

)

 

8

 

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

Current and other assets

 

 

(11

)

 

(12

)

 

20

 

 

(3

)

 

Payables and other liabilities

 

 

39

 

 

23

 

 

38

 

 

100

 

 

Net cash provided (used) by operating activities

 

 

1,944

 

 

75

 

 

294

 

 

2,313

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Cash proceeds from dispositions of investments

 

 

373

 

 

—

 

69

 

 

442

 

 

Cash (paid) received for acquisitions, net of cash acquired

 

 

313

 

 

—

 

—

 

313

 

 

Investments in equity method affiliates and debt and equity securities

 

 

(19

)

 

(4

)

 

(6

)

 

(29

)

 

Repayment of loans and other cash receipts from equity method affiliates and debt and equity securities

 

 

11

 

 

—

 

—

 

11

 

 

Capital expended for property and equipment

 

 

(363

)

 

(103

)

 

(44

)

 

(510

)

 

Sales of short term investments and other marketable securities

 

 

73

 

 

—

 

—

 

73

 

 

Other investing activities, net

 

 

(4

)

 

—

 

18

 

 

14

 

 

Net cash provided (used) by investing activities

 

 

384

 

 

(107

)

 

37

 

 

314

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

5,795

 

 

96

 

 

129

 

 

6,020

 

 

Repayments of debt

 

 

(4,833

)

 

(31

)

 

(7

)

 

(4,871

)

 

Series C Liberty SiriusXM stock repurchase

 

 

(419

)

 

—

 

(24

)

 

(443

)

 

Subsidiary shares repurchased by subsidiary

 

 

(2,159

)

 

—

 

—

 

(2,159

)

 

Cash dividends paid by subsidiary

 

 

(68

)

 

—

 

—

 

(68

)

 

Taxes paid in lieu of shares issued for stock-based compensation

 

 

(201

)

 

(4

)

 

(6

)

 

(211

)

 

Other financing activities, net

 

 

(38

)

 

(7

)

 

4

 

 

(41

)

 

Net cash provided (used) by financing activities

 

 

(1,923

)

 

54

 

 

96

 

 

(1,773

)

 

Effect of foreign exchange rates on cash, cash equivalents and restricted cash

 

 

—

 

—

 

—

 

—

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

405

 

 

22

 

 

427

 

 

854

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

102

 

 

190

 

 

160

 

 

452

 

 

Cash, cash equivalents and restricted cash at end of period

$

507

 

212

 

587

 

1,306

 

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF CASH FLOWS INFORMATION

Twelve months ended December 31, 2018 (unaudited)

 

 

 

Attributed

 

 

 

 

 

Liberty SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

1,004

 

 

11

 

 

(150

)

 

865

 

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

369

 

 

76

 

 

460

 

 

905

 

 

Stock-based compensation

 

 

156

 

 

11

 

 

25

 

 

192

 

 

Share of (earnings) loss of affiliates, net

 

 

11

 

 

(12

)

 

(17

)

 

(18

)

 

Unrealized (gains) losses on intergroup interests, net

 

 

—

 

24

 

 

(24

)

 

—

 

Realized and unrealized (gains) losses on financial instruments, net

 

 

1

 

 

2

 

 

(43

)

 

(40

)

 

Noncash interest expense

 

 

(8

)

 

5

 

 

2

 

 

(1

)

 

Losses (gains) on dilution of investments in affiliate

 

 

—

 

—

 

1

 

 

1

 

 

Loss on early extinguishment of debt

 

 

—

 

—

 

1

 

 

1

 

 

Deferred income tax expense (benefit)

 

 

231

 

 

(1

)

 

(63

)

 

167

 

 

Intergroup tax allocation

 

 

22

 

 

(14

)

 

(8

)

 

—

 

Intergroup tax (payments) receipts

 

 

(20

)

 

35

 

 

(15

)

 

—

 

Other charges (credits), net

 

 

2

 

 

(20

)

 

1

 

 

(17

)

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

Current and other assets

 

 

(4

)

 

8

 

 

(35

)

 

(31

)

 

Payables and other liabilities

 

 

21

 

 

(22

)

 

133

 

 

132

 

 

Net cash provided (used) by operating activities

 

 

1,785

 

 

103

 

 

268

 

 

2,156

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Cash proceeds from dispositions of investments

 

 

—

 

155

 

 

244

 

 

399

 

 

Cash (paid) received for acquisitions, net of cash acquired

 

 

(2

)

 

—

 

—

 

(2

)

 

Investments in equity method affiliates and debt and equity securities

 

 

(405

)

 

—

 

(9

)

 

(414

)

 

Repayment of loans and other cash receipts from equity method affiliates and debt and equity securities

 

 

14

 

 

—

 

—

 

14

 

 

Capital expended for property and equipment, including internal-use software and website development

 

 

(356

)

 

(33

)

 

(14

)

 

(403

)

 

Other investing activities, net

 

 

(7

)

 

37

 

 

6

 

 

36

 

 

Net cash provided (used) by investing activities

 

 

(756

)

 

159

 

 

227

 

 

(370

)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

2,795

 

 

123

 

 

699

 

 

3,617

 

 

Repayments of debt

 

 

(2,431

)

 

(317

)

 

(1,309

)

 

(4,057

)

 

Series C Liberty SiriusXM stock repurchases

 

 

(466

)

 

—

 

—

 

(466

)

 

Subsidiary shares repurchased by subsidiary

 

 

(1,314

)

 

—

 

—

 

(1,314

)

 

Cash dividends paid by subsidiary

 

 

(59

)

 

—

 

—

 

(59

)

 

Taxes paid in lieu of shares issued for stock-based compensation

 

 

(127

)

 

—

 

(3

)

 

(130

)

 

Other financing activities, net

 

 

50

 

 

(18

)

 

(3

)

 

29

 

 

Net cash provided (used) by financing activities

 

 

(1,552

)

 

(212

)

 

(616

)

 

(2,380

)

 

Effect of foreign exchange rates on cash, cash equivalents and restricted cash

 

 

—

 

—

 

(1

)

 

(1

)

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

(523

)

 

50

 

 

(122

)

 

(595

)

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

625

 

 

140

 

 

282

 

 

1,047

 

 

Cash, cash equivalents and restricted cash at end of period

 

$

102

 

 

190

 

 

160

 

 

452

 

 

 

NON-GAAP FINANCIAL MEASURES

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 the Liberty SiriusXM Group, the Braves Group and the 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 and years ended December 31, 2018 and December 31, 2019, respectively.

(amounts in millions)

 

4Q18

 

4Q19

 

 

2018

 

2019

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

1,496

 

 

$

2,062

 

 

 

$

5,771

 

 

$

7,794

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

436

 

 

$

370

 

 

 

$

1,620

 

 

$

1,544

 

Depreciation and amortization

 

 

95

 

 

 

141

 

 

 

 

369

 

 

 

537

 

Stock compensation expense

 

 

39

 

 

 

63

 

 

 

 

156

 

 

 

246

 

Litigation settlement(1)

 

 

—

 

 

—

 

 

 

69

 

 

 

25

 

Acquisition and other related costs

 

 

3

 

 

 

1

 

 

 

 

3

 

 

 

84

 

Adjusted OIBDA

 

$

573

 

 

$

575

 

 

 

$

2,217

 

 

$

2,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

481

 

 

$

523

 

 

 

$

1,827

 

 

$

2,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(29

)

 

$

(23

)

 

 

$

(110

)

 

$

(35

)

Depreciation and amortization

 

 

115

 

 

 

113

 

 

 

 

460

 

 

 

453

 

Stock compensation expense

 

 

6

 

 

 

7

 

 

 

 

25

 

 

 

28

 

Adjusted OIBDA

 

$

92

 

 

$

97

 

 

 

$

375

 

 

$

446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Braves Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

32

 

 

$

34

 

 

 

$

442

 

 

$

476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(28

)

 

$

(45

)

 

 

$

1

 

 

$

(39

)

Depreciation and amortization

 

 

14

 

 

 

17

 

 

 

 

76

 

 

 

71

 

Stock compensation expense

 

 

2

 

 

 

4

 

 

 

 

11

 

 

 

17

 

Adjusted OIBDA

 

$

(12

)

 

$

(24

)

 

 

$

88

 

 

$

49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liberty Media Corporation (Consolidated)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

2,009

 

 

$

2,619

 

 

 

$

8,040

 

 

$

10,292

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

379

 

 

$

302

 

 

 

$

1,511

 

 

$

1,470

 

Depreciation and amortization

 

 

224

 

 

 

271

 

 

 

 

905

 

 

 

1,061

 

Stock compensation expense

 

 

47

 

 

 

74

 

 

 

 

192

 

 

 

291

 

Litigation settlement(1)

 

 

—

 

 

—

 

 

 

69

 

 

 

25

 

Acquisition and other related costs

 

 

3

 

 

 

1

 

 

 

 

3

 

 

 

84

 

Adjusted OIBDA

 

$

653

 

 

$

648

 

 

 

$

2,680

 

 

$

2,931

 

 

(1)

During the first quarter of 2019, SiriusXM recorded a one-time expense of $25 million related to a legal settlement reserve for Do-Not-Call litigation. During the second quarter of 2018, SiriusXM recorded a one-time expense of $69 million related to music royalty legal settlements and reserves. These expenses are included in the selling, general and administrative expense and revenue share and royalties line items, respectively, in SiriusXM’s consolidated financial statements, but have been excluded from Adjusted OIBDA for the corresponding periods as these expenses do not relate to the ongoing performance of the business.

SCHEDULE 2

This press release also includes a presentation of adjusted EBITDA, 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 follows: EBITDA is defined 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) certain adjustments as a result of the purchase price accounting for the XM Merger and the Pandora Acquisition, (ii) predecessor net income adjusted for certain expenses, including depreciation and amortization, other income (loss), and share-based payment expense for January 2019 and the twelve months ended December 31, 2018, (iii) share-based payment expense and (iv) 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 its 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 the legal settlements and reserves, acquisition related costs, and loss on extinguishment of debt, to the extent they occur during the period, is useful as they are significant expenses not incurred as part of SiriusXM’s normal operations for the period.

Adjusted EBITDA has certain limitations in that it does not take into account the impact to SiriusXM’s statements of comprehensive income of certain expenses, including share-based payment expense and certain purchase price accounting for the XM Merger and the Pandora Acquisition. 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 its 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 Years Ended

 

 

 

December 31,

 

 

 

2018

 

2019

 

($ in millions)

 

 

 

 

 

 

 

Net income:

 

$

1,176

 

 

$

914

 

 

Add back items excluded from Adjusted EBITDA:

 

 

 

 

 

 

 

Legal settlements and reserves

 

 

69

 

 

 

25

 

 

Acquisition and other related costs(1)

 

 

3

 

 

 

84

 

 

Share-based payment expense

 

 

133

 

 

 

229

 

 

Depreciation and amortization

 

 

301

 

 

 

468

 

 

Interest expense

 

 

350

 

 

 

390

 

 

Loss on extinguishment of debt

 

 

—

 

 

57

 

 

Other expense (income)

 

 

(44

)

 

 

3

 

 

Income tax expense

 

 

245

 

 

 

283

 

 

Purchase price accounting adjustments:

 

 

 

 

 

 

 

Revenues

 

 

7

 

 

 

13

 

 

Operating expenses

 

 

—

 

 

(14

)

 

Pro forma adjustments(2)

 

 

(109

)

 

 

(25

)

 

Adjusted EBITDA

 

$

2,131

 

 

$

2,427

 

 

 

(1)

 

Acquisition and other related costs include $21 million of share-based compensation expense.

(2)

 

Pro forma adjustment for the year ended December 31, 2019 includes Pandora's January 2019 net income of $(44) million plus depreciation and amortization of $6 million, share-based payment expense of $11 million, acquisition and other related costs of $1 million, and interest expense of $2 million offset by other expense (income) of $1 million. Pro forma adjustment for year ended December 31, 2018 includes Pandora's net income for the year ended December 31, 2018 of $(328) million plus depreciation and amortization of $61 million, share-based payment expense of $111 million, loss on extinguishment of debt of $17 million, and interest expense of $27 million, transaction related costs recorded by Pandora related to the acquisition by Sirius XM $12 million, contract termination fees $6 million, offset by other expense (income) of $7 million and income tax benefit of $8 million.

 

Courtnee Chun
(720) 875-5420

Source: Liberty Media Corporation

Released February 26, 2020