Liberty Media Corporation (“Liberty Media” or “Liberty”)
(NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, LLYVA, LLYVK) today
reported third quarter 2023 results. Headlines include(1):
- Attributed to Liberty SiriusXM Group
- SiriusXM reported third quarter 2023 operating and financial
results
- Third quarter 2023 revenue of $2.27 billion
- Net income of $363 million, up 47% year-over-year; diluted EPS
of $0.09
- Adjusted EBITDA(2) of $747 million; up 4% year-over-year
- Free cash flow(2) of $291 million
- Year-to-date capital returns to SiriusXM stockholders total
$555 million
- SiriusXM reiterated 2023 financial guidance; planned November
8th next generation event
- Liberty Media’s ownership of SiriusXM was 83.5% as of October
27th
- Retired remaining $199 million outstanding principal amount of
1.375% cash convertible notes in October
- Attributed to Formula One Group
- Announced multi-year regional partnership with American Express
to become official payments partner in the Americas
- Confirmed renewal of Pirelli as global tire partner through
2027
- Expanded partnership with DAZN for exclusive broadcast rights
in Spain through 2026
- Formula 1 repriced $1.7 billion Term Loan B in October,
reducing margin from 3.00% to 2.25%
- Entered into definitive agreement to acquire Quint in
September
- Attributed to Liberty Live Group
- Fair value of Live Nation investment was $5.8 billion as of
September 30th
- Issued $1.15 billion of 2.375% Live Nation exchangeable senior
debentures in September
- Used a portion of proceeds to repurchase $858 million aggregate
principal amount of 0.5% Live Nation exchangeable senior
debentures
“Liberty made a proposal for a combination of Liberty SiriusXM
and Sirius in September, and we are confident that rationalizing
this structure into a single, simplified equity will create value
for all shareholders. SiriusXM drove strong adjusted EBITDA growth
in the third quarter and we look forward to the reveal of their new
streaming app and in-car innovations next week that substantially
enhance their value proposition with consumers, especially younger
audiences,” said Greg Maffei, Liberty Media President and CEO. “At
Formula 1, the Las Vegas Grand Prix is two weeks away and will be
the highest attended sporting event drawing the biggest viewing
audience in Vegas history. This event will deliver a spectacular
fan experience and is accruing long-lasting commercial benefits for
the broader Formula 1 ecosystem. Live Nation remains positioned for
a record-breaking 2023 after delivering their largest quarterly AOI
ever.”
Corporate Updates
On July 18, 2023, Liberty Media completed the split-off of the
Braves and its associated mixed-use development (the “Split-Off”)
into the separate public company Atlanta Braves Holdings, Inc.
(“Atlanta Braves Holdings”). The Braves Group was a tracking stock
of Liberty Media prior to the Split-Off and therefore its results
are reflected in Liberty’s historical consolidated results.
On August 3, 2023, Liberty Media completed the reclassification
of its then-existing common stock to create the Liberty Live Group
common stock (the “Reclassification”). Following the
Reclassification, Liberty SiriusXM Group is comprised of Liberty
Media’s interest in SiriusXM, Formula One Group is comprised of
Liberty Media’s ownership of F1 and other minority investments, and
Liberty Live Group is comprised of Liberty Media’s interest in Live
Nation and other minority investments. The Split-Off and
Reclassification are reflected in Liberty’s consolidated financial
statements on a prospective basis.
Discussion of Results
Unless otherwise noted, the following discussion compares
financial information for the three months ended September 30, 2023
to the same period in 2022.
LIBERTY SIRIUSXM GROUP – The following table provides the
financial results attributed to Liberty SiriusXM Group for the
third quarter of 2023. In the third quarter, $22 million of
corporate level selling, general and administrative expense
(including stock-based compensation expense) was allocated to
Liberty SiriusXM Group.
3Q22
3Q23
% Change
amounts in millions
Liberty SiriusXM Group
Revenue
SiriusXM
$
2,280
$
2,271
—
%
Total Liberty SiriusXM Group
$
2,280
$
2,271
—
%
Operating Income (Loss)
SiriusXM
444
550
24
%
Corporate and other
(10
)
(22
)
(120
)%
Total Liberty SiriusXM Group
$
434
$
528
22
%
Adjusted OIBDA (Loss)
SiriusXM
722
748
4
%
Corporate and other
(9
)
(12
)
(33
)%
Total Liberty SiriusXM Group
$
713
$
736
3
%
SiriusXM is a separate publicly traded company and additional
information about SiriusXM can be obtained through its website and
filings with the Securities and Exchange Commission. SiriusXM
reported its stand-alone third quarter results on October 31, 2023.
For additional detail on SiriusXM’s financial results for the third
quarter, please see SiriusXM’s earnings release posted to its
Investor Relations website. For presentation purposes on page one
of this release, we include the results of SiriusXM, as reported by
SiriusXM, without regard to the purchase accounting adjustments
applied by us for purposes of our financial statements. Liberty
Media believes the presentation of financial results as reported by
SiriusXM is useful to investors as the comparability of those
results is best understood in the context of SiriusXM's historical
financial presentation.
The businesses and assets attributed to Liberty SiriusXM Group
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 Formula One Group for the third
quarter of 2023. In the third quarter, Formula One Group incurred
$23 million of corporate level selling, general and administrative
expense (including stock-based compensation expense).
“Formula 1 continues to experience sell-out crowds, record race
attendance and strong growth across our social and digital
platforms, outpacing that of other major sports leagues. This
growth is attracting commercial partners, including our recent
agreement with American Express that marks the first new sports
vertical they have sponsored in over a decade,” said Stefano
Domenicali, Formula 1 President and CEO. “We are making material
progress on our sustainability initiatives, including reducing F1’s
corporate emissions and amplifying F1 Academy by fully integrating
the series into the 2024 F1 calendar with participation from all
ten F1 teams.”
3Q22
3Q23
amounts in millions
Formula One Group
Revenue
Formula 1
$
715
$
887
Total Formula One Group
$
715
$
887
Operating Income (Loss)
Formula 1
$
82
$
132
Corporate and other
(18
)
(25
)
Total Formula One Group
$
64
$
107
Adjusted OIBDA (Loss)
Formula 1
$
170
$
215
Corporate and other
(12
)
(18
)
Total Formula One Group
$
158
$
197
The following table provides the operating results of Formula 1
(“F1”).
F1 Operating
Results
3Q22
3Q23
% Change
amounts in millions
Primary Formula 1 revenue
$
624
$
790
27
%
Other Formula 1 revenue
91
97
7
%
Total Formula 1 revenue
$
715
$
887
24
%
Operating expenses (excluding stock-based
compensation):
Team payments
(370
)
(432
)
(17
)%
Other cost of Formula 1 revenue
(124
)
(183
)
(48
)%
Cost of Formula 1 revenue
$
(494
)
$
(615
)
(24
)%
Selling, general and administrative
expenses
(51
)
(57
)
(12
)%
Adjusted OIBDA
$
170
$
215
26
%
Stock-based compensation
(1
)
(1
)
—
%
Depreciation and Amortization(a)
(87
)
(82
)
6
%
Operating income (loss)
$
82
$
132
61
%
Number of races in period
7
8
____________________
a)
Includes $81 million and $74
million of amortization related to purchase accounting as of
September 30, 2022 and September 30, 2023, respectively, that is
excluded from calculations for purposes of team payments.
Primary F1 revenue represents the majority of F1’s revenue and
is derived from (i) race promotion revenue, (ii) media rights fees
and (iii) sponsorship fees.
There were eight races held in the third quarter of 2023,
compared to seven races held in the third quarter of 2022. There
are 22 events scheduled for the 2023 race calendar.
Primary F1 revenue increased in the third quarter with growth
across race promotion, media rights and sponsorship partly driven
by one more race held in the current period, which resulted in a
greater proportion of season-based revenue recognized. Race
promotion revenue also increased due to higher fees generated from
the different mix of events held, with two additional races outside
of Europe, and other contractual increases in fees. Media rights
revenue benefited from increased fees under new and renewed
contractual agreements and continued growth in F1 TV subscription
revenue. Sponsorship revenue also increased due to recognition of
revenue from new sponsors and growth in revenue from existing
sponsors. Other F1 revenue increased in the third quarter primarily
due to higher freight income driven by two additional races held
outside of Europe and higher hospitality revenue generated from the
Paddock Club, partially offset by lower licensing income.
Operating income and adjusted OIBDA(2) increased in the third
quarter. Team payments were higher compared to the prior year due
to the pro rata recognition of payments across the race season with
one more race held, as well as an expectation of increased team
payments for the full year. Other cost of F1 revenue is largely
variable in nature and is mostly derived from servicing both
Primary and Other F1 revenue opportunities. These costs increased
due to higher hospitality costs driven by cost inflation and the
mix of events held in the current period, as well as increased
freight costs due to two additional races outside of Europe. Other
cost of F1 revenue in the third quarter was also impacted by
increased technical, travel and other event-related costs due to
one additional race, as well as increased commissions and partner
servicing costs associated with higher Primary F1 revenue streams,
certain early stage costs of promoting the Las Vegas Grand Prix and
costs incurred for the new F1 Academy series. Selling, general and
administrative expense increased primarily due to higher personnel,
property, IT and marketing costs, some of which is attributable to
the Las Vegas Grand Prix, partially offset by lower legal costs and
foreign exchange favorability. There were $8 million of costs
associated with the planning of the Las Vegas Grand Prix included
in selling, general and administrative expense in the third quarter
of 2023.
The businesses and assets attributed to Formula One Group
consist primarily of Liberty Media’s subsidiary F1 and other
minority investments.
LIBERTY LIVE GROUP - Liberty Media completed the
Reclassification to create the Liberty Live Group tracking stock on
August 3, 2023. In the third quarter, $5 million of corporate level
selling, general and administrative expense (including stock-based
compensation expense) was allocated to Liberty Live Group.
The businesses and assets attributed to Liberty Live Group
consist primarily of Liberty Media’s interest in Live Nation and
other minority investments.
Share Repurchases
There were no repurchases of Liberty Media’s common stock from
August 1, 2023 through October 31, 2023. The total remaining
repurchase authorization for Liberty Media as of November 1, 2023
is $1.1 billion and can be applied to repurchases of common shares
of any of the Liberty Media tracking stocks.
FOOTNOTES
1)
Liberty Media will discuss these
headlines and other matters on Liberty Media's earnings conference
call that will begin at 10:00 a.m. (E.T.) on November 3, 2023. 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 and free cash
flow (as defined by SiriusXM) and applicable reconciliations see
the accompanying schedules.
NOTES
The following financial information with respect to Liberty
Media's equity affiliates, available for sale securities, cash and
debt is intended to supplement Liberty Media's condensed
consolidated balance sheet and statement of operations to be
included in its Form 10-Q for the period ended September 30, 2023.
For purposes of this presentation, financial information with
respect to Liberty Media’s equity affiliates, available for sale
securities, cash and debt for the period ended June 30, 2023 is
also shown adjusted for the Split-Off and the Reclassification.
On August 3, 2023, in connection with the Reclassification,
Liberty Media’s Live Nation investment previously attributed to
Liberty SiriusXM Group and certain private and public assets
previously attributed to Formula One Group were attributed to
Liberty Live Group. Approximately $100 million of cash from Formula
One Group was attributed to Liberty Live Group in connection with
the Reclassification, of which approximately $33 million came from
the partial liquidation of monetizable public holdings previously
held at Formula One Group. Additionally, all intergroup interests
were settled in connection with the Split-Off.
Additional information on the assets attributed to each tracking
stock can be found at
https://www.libertymedia.com/about/asset-list.
Fair Value of
Corporate Public Holdings
Adjusted for
Split-Off and
Reclassification
(amounts in millions)
6/30/2023
6/30/2023
9/30/2023
Liberty SiriusXM Group
Live Nation Investment(a)
6,345
NA
NA
Atlanta Braves Holdings, Inc.(b)
NA
72
65
Total Liberty SiriusXM Group
$
6,345
$
72
$
65
Formula One Group
Other Monetizable Public Holdings(c)
148
11
—
Total Formula One Group
$
148
$
11
$
—
Liberty Live Group
Live Nation Investment(a)
NA
6,345
5,783
Other Monetizable Public Holdings(c)
NA
104
102
Total Liberty Live Group
$
NA
$
6,449
$
5,885
Total Liberty Media
$
6,493
$
6,532
$
5,950
____________________
a)
Represents the fair value of the
equity investment in Live Nation. In accordance with GAAP, Liberty
Media accounts for its investment in the equity of Live Nation
using the equity method of accounting and includes it in its
condensed consolidated balance sheet at $243 million and $372
million as of June 30, 2023 and September 30, 2023, respectively.
In connection with the Reclassification, the equity investment in
Live Nation previously held at Liberty SiriusXM Group was
attributed to Liberty Live Group.
b)
Atlanta Braves Holdings value as
of June 30, 2023 adjusted for the Split-Off and Reclassification
represents the fair value of the intergroup interest in Braves
Group previously held by Liberty SiriusXM Group as of June 30,
2023. The intergroup interest represented a quasi-equity interest
which was not represented by outstanding shares of common stock. In
connection with the Split-Off, Liberty SiriusXM Group received 1.8
million shares of Atlanta Braves Holdings Series C common stock to
settle the intergroup interest, and such shares are reflected as a
corporate public holding as of June 30, 2023 adjusted for the
Split-Off and Reclassification and as of September 30, 2023
above.
c)
Represents the carrying value of
other public holdings that are accounted for at fair value.
Excludes intergroup interests. Includes exchange-traded funds
previously held at Formula One Group that were attributed to
Liberty Live Group in connection with the Reclassification.
Cash and Debt
The following presentation is provided to separately identify
cash and debt information.
Adjusted for
Split-Off and
Reclassification
(amounts in millions)
6/30/2023
6/30/2023
9/30/2023
Cash and Cash Equivalents Attributable
to:
Liberty SiriusXM Group(a)
$
311
$
382
$
327
Formula One Group(b)
1,489
1,351
1,470
Liberty Live Group(c)
NA
100
315
Braves Group(d)
131
NA
NA
Total Consolidated Cash and Cash
Equivalents (GAAP)
$
1,931
$
1,833
$
2,112
Debt:
SiriusXM senior notes(e)
$
8,750
$
8,750
$
8,750
Pandora convertible senior notes
20
20
20
1.375% cash convertible notes due
2023(f)
199
199
199
3.75% convertible notes due 2028(f)
575
575
575
2.75% SiriusXM exchangeable senior
debentures due 2049(f)
586
586
586
SiriusXM margin loan
875
875
775
Other subsidiary debt(g)
723
723
635
0.5% Live Nation exchangeable senior
debentures due 2050(f)
920
NA
NA
Live Nation margin loan
—
NA
NA
Total Attributed Liberty SiriusXM Group
Debt
$
12,648
$
11,728
$
11,540
Unamortized discount, fair market value
adjustment and deferred loan costs
82
(18
)
—
Total Attributed Liberty SiriusXM Group
Debt (GAAP)
$
12,730
$
11,710
$
11,540
2.25% convertible notes due 2027(f)
475
475
475
Formula 1 term loan and revolving credit
facility
2,416
2,416
2,411
Other corporate level debt
61
61
59
Total Attributed Formula One Group
Debt
$
2,952
$
2,952
$
2,945
Fair market value adjustment
(2
)
(2
)
(48
)
Total Attributed Formula One Group Debt
(GAAP)
$
2,950
$
2,950
$
2,897
Formula 1 leverage(h)
2.2x
2.2x
2.2x
0.5% Live Nation exchangeable senior
debentures due 2050(f)
NA
920
62
2.375% Live Nation exchangeable senior
debentures due 2053(f)
NA
NA
1,150
Live Nation margin loan
NA
—
—
Total Attributed Liberty Live Group
Debt
NA
$
920
$
1,212
Unamortized discount, fair market value
adjustment and deferred loan costs
NA
100
14
Total Attributed Liberty Live Group
Debt (GAAP)
NA
$
1,020
$
1,226
Atlanta Braves debt
543
NA
NA
Total Attributed Braves Group
Debt
$
543
NA
NA
Deferred loan costs
(4
)
NA
NA
Total Attributed Braves Group Debt
(GAAP)
$
539
NA
NA
Total Liberty Media Corporation Debt
(GAAP)
$
16,219
$
15,680
$
15,663
____________________
a)
Includes $51 million and $53
million of cash held at SiriusXM as of June 30, 2023 and September
30, 2023, respectively. Cash as of June 30, 2023 adjusted for
Split-Off and Reclassification reflects $71 million payment from
Formula One Group to Liberty SiriusXM Group to settle intergroup
interest subsequent to June 30, 2023.
b)
Includes $1,055 million and $947
million of cash held at F1 as of June 30, 2023 and September 30,
2023, respectively. Cash as of June 30, 2023 adjusted for Split-Off
and Reclassification reflects $71 million payment from Formula One
Group to Liberty SiriusXM Group to settle intergroup interest and
$67 million of cash on hand contributed to Liberty Live Group
subsequent to June 30, 2023.
c)
In connection with the
Reclassification, Liberty Live Group was capitalized with $100
million of cash from Formula One Group, of which approximately $33
million came from the partial liquidation of monetizable public
holdings previously held at Formula One Group.
d)
Excludes restricted cash held in
reserves pursuant to the terms of various financial obligations of
$52 million as of June 30, 2023.
e)
Outstanding principal amount of
Senior Notes or Term Loan with no reduction for the net unamortized
discount.
f)
Face amount of the convertible
notes and exchangeable debentures with no fair market value
adjustment.
g)
Includes SiriusXM revolving
credit facility and term loan.
h)
Net debt to covenant OIBDA ratio
of F1 operating business as defined in F1’s credit facilities for
covenant calculations.
Liberty Media and its consolidated subsidiaries are in
compliance with their debt covenants as of September 30, 2023.
The cash and debt narrative below compares financial information
as of June 30, 2023 adjusted for the Split-Off and Reclassification
to financial information as of September 30, 2023. Financial
information for the period ended June 30, 2023 unadjusted for the
Split-Off and Reclassification can be found in the table above.
Total cash and cash equivalents attributed to Liberty SiriusXM
Group decreased $55 million in the third quarter as net debt
repayment at both Liberty SiriusXM Group and SiriusXM, capital
expenditures and return of capital at SiriusXM more than offset
cash from operations at SiriusXM. Included in the cash and cash
equivalents balance attributed to Liberty SiriusXM Group at
September 30, 2023 is $53 million held at SiriusXM. Although
SiriusXM is a consolidated subsidiary, it is a separate public
company with a non-controlling interest, therefore Liberty Media
does not have ready access to SiriusXM’s cash balance. Liberty
SiriusXM Group received $78 million of dividends from SiriusXM
during the quarter.
Total debt attributed to Liberty SiriusXM Group decreased $188
million during the quarter as Liberty SiriusXM Group paid down $100
million under its SiriusXM margin loan and SiriusXM reduced
borrowing under its revolving credit facility. In October, Liberty
SiriusXM Group retired the remaining $199 million outstanding
principal amount of its 1.375% cash convertible notes with cash on
hand.
Total cash and cash equivalents attributed to Formula One Group
increased $119 million during the quarter as cash from operations
at F1 more than offset capital expenditures primarily related to
the Las Vegas Grand Prix. During the third quarter, Formula One
Group announced it entered into a definitive agreement to acquire
Quint. The transaction is expected to close by year-end and will be
funded with Formula One Group cash on hand.
Total debt at Formula One Group was relatively flat in the third
quarter. Formula 1 repriced its $1.7 billion Term Loan B facility
on October 4, 2023, reducing the margin from 3.00% to 2.25%.
Total cash and cash equivalents attributed to Liberty Live Group
increased $215 million and total debt increased $292 million during
the third quarter. During the quarter, Liberty Live Group issued
$1.15 billion aggregate principal amount of 2.375% exchangeable
senior debentures due 2053. A portion of the proceeds were used to
repurchase $858 million aggregate adjusted principal amount of its
0.5% exchangeable senior debentures due 2050 for a total cost of
$918 million. Liberty Live Group expects to use the remaining net
proceeds of the offering to settle its remaining 0.5% exchangeable
senior debentures ahead of the September 2024 put/call date, and
for general corporate purposes. On September 5, 2023, the Live
Nation margin loan was amended, extending the maturity date to
September 2026 while other terms remain unchanged.
In connection with the Reclassification, the 3.75% Liberty
SiriusXM Group convertible notes due 2028 (convertible into LSXMA)
and the 2.25% Formula One Group convertible notes due 2027
(convertible into FWONK) were adjusted to provide for the
conversion and settlement of the notes into the reclassified
Liberty SiriusXM Group and Formula One Group equities,
respectively, at new conversion rates in accordance with each
respective bond indenture. As of September 30, 2023, the conversion
rate for the 3.75% notes is 35.4563 shares of LSXMA and the
conversion rate for the 2.25% notes is 12.0505 shares of FWONK per
$1,000 principal amount of the respective notes.
Important Notice: Liberty Media Corporation (Nasdaq:
LSXMA, LSXMB, LSXMK, FWONA, FWONK, LLYVA, LLYVK) will discuss
Liberty Media's earnings release on a conference call which will
begin at 10:00 a.m. (E.T.) on November 3, 2023. The call can be
accessed by dialing (877) 704-2829 or (215) 268-9864, passcode
13736986 at least 10 minutes prior to the start time. The call will
also be broadcast live across the Internet and archived on our
website. To access the webcast go to
https://www.libertymedia.com/investors/news-events/ir-calendar.
Links to this press release will also be available on the Liberty
Media website.
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements about business strategies, market
potential, future financial performance and prospects, the proposed
combination of Liberty SiriusXM Group and SiriusXM, the Las Vegas
Grand Prix, the proposed transaction with QuintEvents LLC, the
continuation of our stock repurchase plan, our environmental and
social initiatives 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, the satisfaction of all conditions to the
proposed combination of Liberty SiriusXM Group and SiriusXM, the
satisfaction of all conditions to closing for the transaction with
QuintEvents LLC, possible changes in market acceptance of new
products or services, regulatory matters affecting our businesses,
the unfavorable outcome of pending or future litigation, the
failure to realize benefits of acquisitions, rapid technological
and industry change, failure of third parties to perform, continued
access to capital on terms acceptable to Liberty Media and changes
in law, including consumer protection laws, and their enforcement.
These forward-looking statements speak only as of the date of this
press release, and Liberty Media expressly disclaims any obligation
or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty Media's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based. Please refer to the publicly filed documents of Liberty
Media, including Amendment No. 5 to Liberty Media’s Registration
Statement on Form S-4 filed on June 8, 2023 and the most recent
Forms 10-K and 10-Q, for additional information about Liberty Media
and about the risks and uncertainties related to Liberty Media's
business which may affect the statements made in this press
release.
LIBERTY MEDIA
CORPORATION
BALANCE SHEET
INFORMATION
September 30, 2023
(unaudited)
Attributed
Liberty
Formula
Liberty
SiriusXM
One
Live
Intergroup
Consolidated
Group
Group
Group
Eliminations
Liberty
amounts in millions
Assets
Current assets:
Cash and cash equivalents
$
327
1,470
315
—
2,112
Trade and other receivables, net
659
149
—
—
808
Other current assets
357
348
—
—
705
Total current assets
1,343
1,967
315
—
3,625
Investments in affiliates, accounted for
using the equity method
705
43
397
—
1,145
Property and equipment, at cost
3,083
874
—
—
3,957
Accumulated depreciation
(1,829
)
(123
)
—
—
(1,952
)
1,254
751
—
—
2,005
Intangible assets not subject to
amortization
Goodwill
15,209
3,956
—
—
19,165
FCC licenses
8,600
—
—
—
8,600
Other
1,242
—
—
—
1,242
25,051
3,956
—
—
29,007
Intangible assets subject to amortization,
net
1,017
2,924
—
—
3,941
Other assets
567
913
479
(167
)
1,792
Total assets
$
29,937
10,554
1,191
(167
)
41,515
Liabilities and Equity
Current liabilities:
Intergroup payable (receivable)
$
51
(53
)
2
—
—
Accounts payable and accrued
liabilities
1,323
390
2
—
1,715
Current portion of debt
730
32
65
—
827
Deferred revenue
1,248
776
—
—
2,024
Other current liabilities
78
32
—
—
110
Total current liabilities
3,430
1,177
69
—
4,676
Long-term debt
10,810
2,865
1,161
—
14,836
Deferred income tax liabilities
2,207
—
—
(167
)
2,040
Other liabilities
575
149
—
—
724
Total liabilities
17,022
4,191
1,230
(167
)
22,276
Equity / Attributed net assets
9,946
6,363
(62
)
—
16,247
Noncontrolling interests in equity of
subsidiaries
2,969
—
23
—
2,992
Total liabilities and equity
$
29,937
10,554
1,191
(167
)
41,515
LIBERTY MEDIA
CORPORATION
STATEMENT OF OPERATIONS
INFORMATION
Three months ended September
30, 2023 (unaudited)
Attributed
Liberty
Formula
Liberty
SiriusXM
One
Live
Braves
Consolidated
Group
Group
Group
Group
Liberty
amounts in millions
Revenue:
Sirius XM Holdings revenue
$
2,271
—
—
—
2,271
Formula 1 revenue
—
887
—
—
887
Other revenue
—
—
—
49
49
Total revenue
2,271
887
—
49
3,207
Operating costs and expenses, including
stock-based compensation:
Cost of Sirius XM Holdings services
(exclusive of depreciation shown separately below):
Revenue share and royalties
730
—
—
—
730
Programming and content(1)
153
—
—
—
153
Customer service and billing(1)
117
—
—
—
117
Other(1)
57
—
—
—
57
Cost of Formula 1 revenue (exclusive of
depreciation shown separately below)
—
615
—
—
615
Subscriber acquisition costs
87
—
—
—
87
Other operating expenses(1)
72
—
—
38
110
Selling, general and administrative(1)
376
79
5
9
469
Impairment, restructuring and acquisition
costs, net of recoveries
6
—
—
—
6
Depreciation and amortization
145
86
—
3
234
1,743
780
5
50
2,578
Operating income (loss)
528
107
(5
)
(1
)
629
Other income (expense):
Interest expense
(135
)
(56
)
(2
)
(3
)
(196
)
Share of earnings (losses) of affiliates,
net
45
2
90
1
138
Realized and unrealized gains (losses) on
financial instruments, net
17
66
(72
)
—
11
Unrealized gains (losses) on intergroup
interests
4
16
—
(20
)
—
Other, net
6
14
(35
)
1
(14
)
(63
)
42
(19
)
(21
)
(61
)
Earnings (loss) before income taxes
465
149
(24
)
(22
)
568
Income tax (expense) benefit
(100
)
(31
)
5
1
(125
)
Net earnings (loss)
365
118
(19
)
(21
)
443
Less net earnings (loss) attributable to
the noncontrolling interests
58
—
—
—
58
Net earnings (loss) attributable to
Liberty stockholders
$
307
118
(19
)
(21
)
385
(1) Includes stock-based compensation
expense as follows:
Programming and content
10
—
—
—
10
Customer service and billing
1
—
—
—
1
Other
2
—
—
—
2
Other operating expenses
11
—
—
—
11
Selling, general and administrative
33
4
1
1
39
Stock compensation expense
$
57
4
1
1
63
LIBERTY MEDIA
CORPORATION
STATEMENT OF OPERATIONS
INFORMATION
Three months ended September
30, 2022 (unaudited)
Attributed
Liberty
Formula
SiriusXM
One
Braves
Consolidated
Group
Group
Group
Liberty
amounts in millions
Revenue:
Sirius XM Holdings revenue
$
2,280
—
—
2,280
Formula 1 revenue
—
715
—
715
Other revenue
—
—
252
252
Total revenue
2,280
715
252
3,247
Operating costs and expenses, including
stock-based compensation:
Cost of Sirius XM Holdings services
(exclusive of depreciation shown separately below):
Revenue share and royalties
709
—
—
709
Programming and content(1)
156
—
—
156
Customer service and billing(1)
122
—
—
122
Other(1)
54
—
—
54
Cost of Formula 1 revenue (exclusive of
depreciation shown separately below)
—
494
—
494
Subscriber acquisition costs
86
—
—
86
Other operating expenses(1)
69
—
184
253
Selling, general and administrative(1)
424
68
33
525
Impairment, restructuring and acquisition
costs, net of recoveries
69
—
5
74
Depreciation and amortization
157
89
22
268
1,846
651
244
2,741
Operating income (loss)
434
64
8
506
Other income (expense):
Interest expense
(130
)
(41
)
(8
)
(179
)
Share of earnings (losses) of affiliates,
net
104
1
6
111
Realized and unrealized gains (losses) on
financial instruments, net
76
24
6
106
Unrealized gains (losses) on intergroup
interests
(16
)
47
(31
)
—
Other, net
13
7
—
20
47
38
(27
)
58
Earnings (loss) before income taxes
481
102
(19
)
564
Income tax (expense) benefit
(135
)
8
(3
)
(130
)
Net earnings (loss)
346
110
(22
)
434
Less net earnings (loss) attributable to
the noncontrolling interests
41
5
—
46
Less net earnings (loss) attributable to
redeemable noncontrolling interest
—
(3
)
—
(3
)
Net earnings (loss) attributable to
Liberty stockholders
$
305
108
(22
)
391
(1) Includes stock-based compensation
expense as follows:
Programming and content
10
—
—
10
Customer service and billing
1
—
—
1
Other
1
—
—
1
Other operating expenses
10
—
—
10
Selling, general and administrative
31
5
3
39
Stock compensation expense
$
53
5
3
61
LIBERTY MEDIA
CORPORATION
STATEMENT OF CASH FLOWS
INFORMATION
Nine months ended September
30, 2023 (unaudited)
Attributed
Liberty
Formula
Liberty
SiriusXM
One
Live
Braves
Consolidated
Group
Group
Group
Group
Liberty
amounts in millions
Cash flows from operating activities:
Net earnings (loss)
$
802
124
(19
)
(109
)
798
Adjustments to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization
460
254
—
37
751
Stock-based compensation
151
14
1
7
173
Non-cash impairment and restructuring
costs
21
—
—
—
21
Share of (earnings) loss of affiliates,
net
(117
)
1
(90
)
(12
)
(218
)
Unrealized (gains) losses on intergroup
interests, net
(68
)
(15
)
—
83
—
Realized and unrealized (gains) losses on
financial instruments, net
145
(83
)
72
(3
)
131
Deferred income tax expense (benefit)
(1
)
19
(4
)
(5
)
9
Intergroup tax allocation
136
(135
)
(1
)
—
—
Intergroup tax (payments) receipts
(90
)
91
—
(1
)
—
Other charges (credits), net
(10
)
6
34
4
34
Changes in operating assets and
liabilities
Current and other assets
5
(122
)
(10
)
(34
)
(161
)
Payables and other liabilities
(136
)
400
14
65
343
Net cash provided (used) by operating
activities
1,298
554
(3
)
32
1,881
Cash flows from investing activities:
Investments in equity method affiliates
and debt and equity securities
(44
)
(173
)
—
—
(217
)
Cash proceeds from dispositions
—
110
1
—
111
Capital expended for property and
equipment, including internal-use software and website
development
(520
)
(308
)
—
(35
)
(863
)
Other investing activities, net
(1
)
(20
)
—
—
(21
)
Net cash provided (used) by investing
activities
(565
)
(391
)
1
(35
)
(990
)
Cash flows from financing activities:
Borrowings of debt
2,601
—
1,135
30
3,766
Repayments of debt
(3,306
)
(64
)
(918
)
(20
)
(4,308
)
Intergroup (repayments) borrowings
273
(273
)
—
—
—
Subsidiary shares repurchased by
subsidiary
(274
)
—
—
—
(274
)
Cash dividends paid by subsidiary
(48
)
—
—
—
(48
)
Taxes paid in lieu of shares issued for
stock-based compensation
(52
)
(8
)
—
(1
)
(61
)
Atlanta Braves Holdings, Inc.
Split-Off
—
—
—
(188
)
(188
)
Reclassification
—
(100
)
100
—
—
Other financing activities, net
38
19
—
9
66
Net cash provided (used) by financing
activities
(768
)
(426
)
317
(170
)
(1,047
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(35
)
(263
)
315
(173
)
(156
)
Cash, cash equivalents and restricted cash
at beginning of period
370
1,733
NA
173
2,276
Cash, cash equivalents and restricted cash
at end of period
$
335
1,470
315
—
2,120
Cash and cash equivalents
$
327
1,470
315
NA
2,112
Restricted cash included in other
assets
8
—
—
NA
8
Total cash and cash equivalents and
restricted cash at end of period
$
335
1,470
315
NA
2,120
LIBERTY MEDIA
CORPORATION
STATEMENT OF CASH FLOWS
INFORMATION
Nine months ended September
30, 2022 (unaudited)
Attributed
Liberty
Formula
SiriusXM
One
Braves
Consolidated
Group
Group
Group
Liberty
amounts in millions
Cash flows from operating activities:
Net earnings (loss)
$
1,188
187
29
1,404
Adjustments to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization
461
272
57
790
Stock-based compensation
152
12
9
173
Non-cash impairment and restructuring
costs
68
—
5
73
Share of (earnings) loss of affiliates,
net
(140
)
—
(18
)
(158
)
Unrealized (gains) losses on intergroup
interests, net
31
(26
)
(5
)
—
Realized and unrealized (gains) losses on
financial instruments, net
(433
)
(100
)
(12
)
(545
)
Deferred income tax expense (benefit)
267
16
(6
)
277
Intergroup tax allocation
80
(95
)
15
—
Intergroup tax (payments) receipts
(66
)
57
9
—
Other charges (credits), net
(20
)
(4
)
(3
)
(27
)
Changes in operating assets and
liabilities
—
—
—
—
Current and other assets
41
(91
)
(52
)
(102
)
Payables and other liabilities
(325
)
188
(8
)
(145
)
Net cash provided (used) by operating
activities
1,304
416
20
1,740
Cash flows from investing activities:
Investments in equity affiliates and debt
and equity securities
(1
)
(35
)
(5
)
(41
)
Cash proceeds from dispositions
50
51
48
149
Cash (paid) received for acquisitions, net
of cash acquired
(136
)
—
—
(136
)
Capital expended for property and
equipment, including internal-use software and website
development
(279
)
(263
)
(13
)
(555
)
Other investing activities, net
4
73
—
77
Net cash provided (used) by investing
activities
(362
)
(174
)
30
(506
)
Cash flows from financing activities:
Borrowings of debt
3,019
468
135
3,622
Repayments of debt
(3,079
)
(634
)
(235
)
(3,948
)
Intergroup (repayments) borrowings
78
(64
)
(14
)
—
Liberty stock repurchases
(358
)
(37
)
—
(395
)
Subsidiary shares repurchased by
subsidiary
(599
)
—
—
(599
)
Cash dividends paid by subsidiary
(233
)
—
—
(233
)
Taxes paid in lieu of shares issued for
stock-based compensation
(134
)
25
—
(109
)
Other financing activities, net
30
58
(6
)
82
Net cash provided (used) by financing
activities
(1,276
)
(184
)
(120
)
(1,580
)
Effect of foreign exchange rates on cash,
cash equivalents and restricted cash
—
(13
)
—
(13
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(334
)
45
(70
)
(359
)
Cash, cash equivalents and restricted cash
at beginning of period
606
2,074
244
2,924
Cash, cash equivalents and restricted cash
at end of period
$
272
2,119
174
2,565
Cash and cash equivalents
$
264
2,119
159
2,542
Restricted cash included in other current
assets
—
—
15
15
Restricted cash included in other
assets
8
—
—
8
Total cash and cash equivalents and
restricted cash at end of period
$
272
2,119
174
2,565
NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTAL
DISCLOSURES
SCHEDULE 1
To provide investors with additional information regarding our
financial results, this press release includes a presentation of
Adjusted OIBDA, which is a non-GAAP financial measure, for Liberty
SiriusXM Group, Formula One Group, Liberty Live Group and the
former Braves Group, together with reconciliations to operating
income, as determined under GAAP. Liberty Media defines Adjusted
OIBDA as operating income (loss) plus depreciation and
amortization, stock-based compensation, separately reported
litigation settlements, restructuring, acquisition and other
related costs and impairment charges.
Liberty Media believes Adjusted OIBDA is an important indicator
of the operational strength and performance of its businesses by
identifying those items that are not directly a reflection of each
business’ performance or indicative of ongoing business trends. In
addition, this measure allows management to view operating results
and perform analytical comparisons and benchmarking between
businesses and identify strategies to improve performance. Because
Adjusted OIBDA is used as a measure of operating performance,
Liberty Media views operating income as the most directly
comparable GAAP measure. Adjusted OIBDA is not meant to replace or
supersede operating income or any other GAAP measure, but rather to
supplement such GAAP measures in order to present investors with
the same information that Liberty Media's management considers in
assessing the results of operations and performance of its
assets.
The following table provides a reconciliation of Adjusted OIBDA
for Liberty Media to operating income (loss) calculated in
accordance with GAAP for the three months ended September 30, 2022
and September 30, 2023, respectively.
QUARTERLY
SUMMARY
(amounts in millions)
3Q22
3Q23
Liberty SiriusXM Group
Operating income
$
434
$
528
Depreciation and amortization
157
145
Stock compensation expense
53
57
Impairment, restructuring and acquisition
costs, net of recoveries(a)
69
6
Adjusted OIBDA
$
713
$
736
Formula One Group
Operating income
$
64
$
107
Depreciation and amortization
89
86
Stock compensation expense
5
4
Adjusted OIBDA
$
158
$
197
Liberty Live Group
Operating income
$
NA
$
(5
)
Depreciation and amortization
NA
—
Stock compensation expense
NA
1
Adjusted OIBDA
$
NA
$
(4
)
Braves Group
Operating income
$
8
$
(1
)
Depreciation and amortization
22
3
Stock compensation expense
3
1
Impairment, restructuring and acquisition
costs, net of recoveries(a)
5
—
Adjusted OIBDA
$
38
$
3
Liberty Media Corporation
(Consolidated)
Operating income
$
506
$
629
Depreciation and amortization
268
234
Stock compensation expense
61
63
Impairment, restructuring and acquisition
costs, net of recoveries
74
6
Adjusted OIBDA
$
909
$
932
____________________
a)
During the three months ended
September 30, 2023, SiriusXM recorded restructuring related costs
and impairments of $6 million. During the three months ended
September 30, 2022, Sirius XM Holdings recorded an impairment of
$43 million associated with terminated software projects, $16
million related to certain vacated office spaces, $4 million in
connection with furniture and equipment located at the impaired
office spaces and $5 million related to personnel severance, and
Braves Holdings recorded $5 million of impairment losses as a
result of hurricane damage at its spring training facility in
Florida. These charges have been excluded from adjusted OIBDA.
SCHEDULE 2
This press release also includes a presentation of adjusted
EBITDA of SiriusXM, which is a non-GAAP financial measure used by
SiriusXM, together with a reconciliation to SiriusXM's stand-alone
net income, as determined under GAAP. SiriusXM defines adjusted
EBITDA as net income before interest expense, income tax expense
and depreciation and amortization. SiriusXM adjusts EBITDA to
exclude the impact of other expense (income) as well as certain
other charges discussed below. Adjusted EBITDA is a non-GAAP
financial measure that excludes or adjusts for (if applicable): (i)
loss on extinguishment of debt, (ii) share-based payment expense,
(iii) impairment, restructuring and acquisition costs, (iv) legal
settlements/reserves and (v) other significant operating expense
(income) that do not relate to the on-going performance of
SiriusXM’s business. SiriusXM believes adjusted EBITDA is a useful
measure of the underlying trend of its operating performance, which
provides useful information about its business apart from the costs
associated with its capital structure and purchase price
accounting. SiriusXM believes investors find this non-GAAP
financial measure useful when analyzing past operating performance
with current performance and comparing SiriusXM’s operating
performance to the performance of other communications,
entertainment and media companies. SiriusXM believes investors use
adjusted EBITDA to estimate current enterprise value and to make
investment decisions. As a result of large capital investments in
SiriusXM’s satellite radio system, its results of operations
reflect significant charges for depreciation expense. SiriusXM
believes the exclusion of share-based payment expense is useful as
it is not directly related to the operational conditions of its
business. SiriusXM also believes the exclusion of impairment,
restructuring and acquisition related costs, to the extent they
occur during the period, is useful as they are significant expenses
not incurred as part of its normal operations for the period.
Adjusted EBITDA has certain limitations in that it does not take
into account the impact to SiriusXM’s consolidated statements of
comprehensive income of certain expenses, including share-based
payment expense. SiriusXM endeavors to compensate for the
limitations of the non-GAAP measure presented by also providing the
comparable GAAP measure with equal or greater prominence and
descriptions of the reconciling items, including quantifying such
items, to derive the non-GAAP measure. Investors that wish to
compare and evaluate SiriusXM’s operating results after giving
effect for these costs, should refer to net income as disclosed in
SiriusXM’s unaudited consolidated statements of comprehensive
income. Since adjusted EBITDA is a non-GAAP financial performance
measure, SiriusXM’s calculation of adjusted EBITDA may be
susceptible to varying calculations; may not be comparable to other
similarly titled measures of other companies; and should not be
considered in isolation, as a substitute for, or superior to
measures of financial performance prepared in accordance with GAAP.
The reconciliation of net income to the adjusted EBITDA is
calculated as follows:
Unaudited
For the Three Months Ended
September 30,
2022
2023
($ in millions)
Net income:
$
247
$
363
Add back items excluded from Adjusted
EBITDA:
Legal settlements and reserves
—
—
Impairment, restructuring and acquisition
costs(a)
69
5
Share-based payment expense
50
48
Depreciation and amortization
134
130
Interest expense
107
106
Other (income) expense
3
3
Income tax expense
110
92
Adjusted EBITDA
$
720
$
747
____________________
a)
As reported by SiriusXM, during
the three months ended September 30, 2023, SiriusXM recorded
restructuring related costs and impairments of $5 million. As
reported by SiriusXM, during the three months ended September 30,
2022, Sirius XM Holdings recorded an impairment of $43 million
associated with terminated software projects, $16 million related
to certain vacated office spaces, $4 million in connection with
furniture and equipment located at the impaired office spaces and
$5 million related to personnel severance. These charges have been
excluded from adjusted OIBDA.
SCHEDULE 3
This press release includes a presentation of free cash flow of
SiriusXM, which is a non-GAAP financial measure used by SiriusXM,
together with a reconciliation to SiriusXM's stand-alone cash flow
provided by operating activities, as determined under GAAP.
SiriusXM’s free cash flow is derived from cash flow provided by
operating activities plus insurance recoveries on its satellites,
net of additions to property and equipment and purchases of other
investments. Free cash flow is a metric that SiriusXM’s management
and board of directors use to evaluate the cash generated by its
operations, net of capital expenditures and other investment
activity. In a capital intensive business, with significant
investments in satellites, SiriusXM looks at its operating cash
flow, net of these investing cash outflows, to determine cash
available for future subscriber acquisition and capital
expenditures, to repurchase or retire debt, to acquire other
companies and to evaluate its ability to return capital to
stockholders. SiriusXM excludes from free cash flow certain items
that do not relate to the on-going performance of its business,
such as cash flows related to acquisitions, strategic and
short-term investments and net loan activity with related parties
and other equity investees. SiriusXM believes free cash flow is an
indicator of the long-term financial stability of its business.
Free cash flow, which is reconciled to "Net cash provided by
operating activities," is a non-GAAP financial measure. This
measure can be calculated by deducting amounts under the captions
"Additions to property and equipment" and deducting or adding
Restricted and other investment activity from "Net cash provided by
operating activities" from the unaudited consolidated statements of
cash flows. Free cash flow should be used in conjunction with other
GAAP financial performance measures and may not be comparable to
free cash flow measures presented by other companies. Free cash
flow should be viewed as a supplemental measure rather than an
alternative measure of cash flows from operating activities, as
determined in accordance with GAAP. Free cash flow is limited and
does not represent remaining cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the
payments required for debt maturities. SiriusXM believes free cash
flow provides useful supplemental information to investors
regarding its current cash flow, along with other GAAP measures
(such as cash flows from operating and investing activities), to
determine its financial condition, and to compare its operating
performance to other communications, entertainment and media
companies. Free cash flow is calculated as follows:
Unaudited
For the Three Months Ended
September 30,
2022
2023
($ in millions)
Cash flow information
Net cash provided by operating
activities
$
412
$
478
Net cash used in investing activities
$
(82
)
$
(189
)
Net cash used in financing activities
$
(416
)
$
(287
)
Free cash flow
Net cash provided by operating
activities
$
412
$
478
Additions to property and equipment
(83
)
(187
)
Free cash flow
$
329
$
291
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102998413/en/
Shane Kleinstein, (720) 875-5432
Liberty Media (NASDAQ:LSXMA)
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