Market Overview

Liberty Media Corporation Reports Fourth Quarter and Year End 2018 Financial Results

Share:

Liberty Media Corporation ("Liberty Media" or "Liberty") (NASDAQ: LSXMA,
LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported fourth quarter
and year end 2018 results. Highlights include (1):

  • Attributed to Liberty SiriusXM Group
    • SiriusXM reported strong full year 2018 results
      • Self-pay net subscriber additions of 1.4 million in 2018;
        total subscribers top 34 million
      • Record 2018 revenue of $5.8 billion
      • Full-year net income grew 81% to $1.2 billion; diluted EPS
        climbed 88% to $0.26
      • Adjusted EBITDA(2) climbed 6% to $2.2 billion
      • SiriusXM confirmed guidance for 2019
      • Completed transaction with Pandora on February 1st
    • Liberty Media's ownership of SiriusXM stood at 67% pro forma for
      Pandora transaction
    • From November 1st through January 31st,
      repurchased 4.2 million LSXMK shares at an average price per share
      of $38.12 and total cash consideration of $159 million
  • Attributed to Formula One Group
    • 2018 season audience figures increased across TV and digital
      platforms for second year in a row
      • TV viewers across all F1 programming up 10% to 490 million
      • Fastest growing major sports brand on social media for second
        straight year, with social media followers up 54% to 18.5
        million
    • Aggregate attendance at races grew 8% to 4.1 million in 2018
      • Average attendance per race weekend increased 2.7% to
        approximately 195,000
    • 2019 F1 season begins March 17th in Melbourne; 21 Grand
      Prix events in 2019 season
  • Attributed to Braves Group
    • Baseball revenue grew 9% to $404 million in 2018
    • Regular season attendance increased to 2.6 million in 2018,
      representing highest attendance in 11 years

"SiriusXM finished strong, hit financial milestones and ended the year
with 34 million subscribers. The transaction with Pandora closed on
February 1st and we are excited for the innovative audio
entertainment offerings to come," said Greg Maffei, Liberty Media
President and CEO. "F1 concluded an exciting 2018 season and increased
fans at the races, TV viewership and social media engagement. The Braves
posted strong financial results in their second year at SunTrust Park
and the Battery Atlanta, and we look forward to the start of the season
on March 28th."

Operating Results

Unless otherwise noted, the following discussion compares financial
information for the three months or year ended December 31, 2018 to the
same period in 2017.

LIBERTY SIRIUSXM GROUP – The following table provides the
financial results attributed to Liberty SiriusXM Group for the fourth
quarter and full year 2018. Approximately $6 million and $39 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 2018, respectively.

                 
Three months ended Twelve months ended
December 31,       December 31,      
2017 2018 % Change 2017 2018 % Change
amounts in millions amounts in millions
Liberty SiriusXM Group
Revenue
SiriusXM $ 1,404   $ 1,496     7 % $ 5,425   $ 5,771     6   %
Total Liberty SiriusXM Group $ 1,404   $ 1,496     7 % $ 5,425   $ 5,771     6   %
Operating Income (Loss)
SiriusXM 384 442 15 % 1,588 1,659 4 %
Corporate and other   (9 )   (6 )   33 %   (41 )   (39 )   5   %
Total Liberty SiriusXM Group $ 375   $ 436     16 % $ 1,547   $ 1,620     5   %
Adjusted OIBDA
SiriusXM 541 571 6 % 2,109 2,230 6 %
Corporate and other   (2 )   (1 )   50 %   (15 )   (16 )   (7 ) %
Total Liberty SiriusXM Group $ 539   $ 570     6 % $ 2,094   $ 2,214     6   %
 
 

The increases in Liberty SiriusXM Group revenue, operating income and
adjusted OIBDA(2) in the fourth quarter and full year 2018
were primarily attributable to an increase in SiriusXM's daily weighted
average number of subscribers and an increase in SiriusXM's average
monthly revenue per subscriber due to certain rate increases. Revenue
growth at Liberty SiriusXM Group was partially offset by the impact of
the adoption of a new revenue recognition accounting standard, as
described in detail in Liberty Media's Form 10-K for the year ended
December 31, 2018.

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 year end results on January 30, 2019.
For additional detail on SiriusXM's fourth quarter and year end
financial results, please see SiriusXM's earnings release posted to
their 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. For a
reconciliation of revenue, adjusted OIBDA (as defined by Liberty Media)
and operating income for SiriusXM's stand-alone operating results as
reported by SiriusXM to those results as reported by Liberty Media, see
Liberty Media's Form 10-K for the year ended December 31, 2018.

The businesses and assets attributed to Liberty SiriusXM Group consist
primarily of Liberty Media's interest in SiriusXM.

FORMULA ONE GROUP – The following table provides the financial
results attributed to the Formula One Group for the fourth quarter and
full year 2018. Approximately $15 million and $34 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 2018, respectively.

"We have made significant investments in the business over the last two
years which are showing results through increased fan engagement across
race attendance and all media platforms. This provides tremendous
momentum as we enter 2019," said Chase Carey, Formula 1 Chairman and
CEO. "During the off-season to date, we extended the race contract in
Azerbaijan, renewed a broadcast agreement with Sky Deutschland, and
signed up additional sponsors, among other things. Our F1 TV platform
has added exclusive content to the platform, with live pre-season
testing followed by a daily review show, and a new F1 produced
documentary on Michael Schumacher. Further regarding content, we are
excited for the launch of the F1 Netflix series ‘Formula 1: Drive to
Survive' on March 8th."

         
Three months ended Twelve months ended
December 31, December 31,
2017 2018 2017 2018
amounts in millions amounts in millions
Formula One Group
Revenue
Formula 1 $ 570   $ 481   $ 1,783   $ 1,827  
Total Formula One Group $ 570   $ 481   $ 1,783   $ 1,827  
Operating Income (Loss)
Formula 1 $ 39 $ (12 ) $ 17 $ (68 )
Corporate and other   (15 )   (17 )   (57 )   (42 )
Total Formula One Group $ 24   $ (29 ) $ (40 ) $ (110 )
Adjusted OIBDA
Formula 1 $ 150 $ 105 $ 438 $ 400
Corporate and other   (12 )   (13 )   (41 )   (25 )
Total Formula One Group $ 138   $ 92   $ 397   $ 375  
 
 

Liberty completed the acquisition of F1 on January 23, 2017. For
comparison and discussion purposes, the pro forma results of F1
presented below include results for the twelve months ended December 31,
2017, inclusive of purchase accounting adjustments, as if the
acquisition of F1 occurred on January 1, 2016. The financial information
below is presented for illustrative purposes only and does not purport
to represent the actual results of F1 had the business combination
occurred on January 1, 2016, or to project the results of operations of
Liberty for any future periods.

Pro Forma F1 Operating Results

           

Three months ended

Twelve months ended
December 31,     December 31,    
2017 2018 % Change 2017 2018 % Change
(unaudited) (unaudited)
amounts in USD millions amounts in USD millions
Primary Formula 1 revenue $ 447 $ 351 (21 ) % $ 1,483 $ 1,487 0 %
Other Formula 1 revenue   123     130   6   %   301     340   13   %
Total Formula 1 revenue $ 570 $ 481 (16 ) % $ 1,784 $ 1,827 2 %
Operating expenses (excluding stock-based compensation included
below):
Team payments (269 ) (217 ) 19 % (919 ) (913 ) 1 %
Other cost of Formula 1 revenue   (114 )   (111 ) 3   %   (302 )   (360 ) (19 ) %
Cost of Formula 1 revenue $ (383 ) $ (328 ) 14 % $ (1,221 ) $ (1,273 ) (4 ) %
Selling, general and administrative expenses   (37 )   (48 ) (30 ) %   (125 )   (154 ) (23 ) %
Adjusted OIBDA $ 150 $ 105 (30 ) % $ 438 $ 400 (9 ) %
Stock-based compensation (3 ) (4 ) (33 ) % (24 ) (16 ) 33 %
Depreciation and Amortization   (114 )   (113 ) 1   %   (451 )   (452 ) (0 ) %
Operating income (loss) $ 33     (12 ) (136 ) % $ (37 )   (68 ) (84 ) %
 
Number of races in period 6 5 20 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, 2018,
these revenue streams comprised 33.8%, 33.1% and 14.6%, respectively, of
total F1 revenue. F1 held 5 races in the fourth quarter of 2018 compared
to 6 races in the fourth quarter of 2017, and 21 races in the 2018
season compared to 20 in the 2017 season.

Primary F1 revenue decreased in the fourth quarter primarily due to one
less event being held in the fourth quarter of 2018 compared to 2017.
Broadcast revenue decreased due to the calendar change, as approximately
5/21 of the full year fees were recognized in the fourth quarter of 2018
compared to 6/20 in the prior year. Advertising and sponsorship revenue
in the fourth quarter benefited modestly from the adoption of the new
revenue recognition accounting standard (ASC 606) on recognizing fees
from F1's Global Partner and Official Supplier contracts. These fee
elements were previously recognized pro-rata with the race calendar, but
certain elements are now being recognized evenly over the calendar year
and others over a smaller number of specific events. While this led to
quarter by quarter variation against prior year recognition, the change
was neutral on a full calendar year basis.

For the full year 2018, Primary F1 revenue was essentially flat. Race
promotion revenue increased modestly primarily due to contractual
increases in race promotion fees, as well as a contract amendment for
one event that provided for an increase in promotion revenue which was
fully offset by a reduction in advertising revenue related to that
event. This contract amendment was neutral for total Primary F1 revenue.
In addition, race promotion revenue in 2018 was impacted by the calendar
variance, with the non-occurrence of the Malaysian Grand Prix in 2018
not fully offset by the return of two European races in France and
Germany. Broadcast revenue was essentially flat for the full year 2018
as contractual rate increases and favorable foreign currency movements
were offset by the early termination of one contract with a failing
broadcast rights broker. Advertising and sponsorship revenue decreased
for the full year 2018. Revenue from new sponsorship agreements and
growth in certain contractual agreements did not fully offset the
aforementioned contract amendment that saw a reduction in advertising
revenue fully offset by an equal increase in promotion revenue (which
was neutral to primary revenue).

Other F1 revenue increased in the fourth quarter and full year 2018,
primarily due to higher logistics revenue, higher digital media and TV
production related revenue, increased revenue from various fan
engagement activities and higher spare part sales for the F2 and GP3
support series. From 2019 onward, under a long term agreement with the
FIA, F1 will operate a new official F3 support series in place of GP3.

Operating loss increased in the fourth quarter and full year 2018.
Adjusted OIBDA decreased in the fourth quarter primarily due to calendar
variances and decreased for the full year 2018 primarily due to
increased costs as the business continued to invest. Cost of F1 revenue
increased primarily due to logistics and travel expense, higher costs
associated with providing the chassis and component parts to F2 and GP3
teams, digital media development and spend on fan engagement, which more
than offset reduced team payments. Selling, general and administrative
expense increased primarily as a result of increased marketing and
research costs and increased bad debt expense due to payments issues
with two commercial partners.

F1's total net debt to covenant OIBDA ratio, as defined in F1's credit
facilities for covenant calculations, was approximately 7.35x as of
December 31, 2018, as compared to a maximum allowable leverage ratio of
8.75x. Income from 21 races was captured in the trailing twelve months
ended December 31, 2018 versus 22 races for the period ended September
30, 2018, and the leverage ratio increased accordingly.

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 an intergroup interest in the Braves Group. There
are approximately 9.1 million notional shares of the Braves Group
underlying the Formula One Group's 15.1% intergroup interest as of
January 31, 2019.

BRAVES GROUP - The following table provides the financial results
attributed to the Braves Group for the fourth quarter and full year
2018. 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 2018, respectively.

         
Three months ended Twelve months ended
December 31, December 31,
2017 2018 2017 2018
amounts in millions amounts in millions
Braves Group
Revenue
Corporate and other $ 20   $ 32   $ 386   $ 442
Total Braves Group $ 20   $ 32   $ 386   $ 442
Operating Income (Loss)
Corporate and other   (68 )   (28 )   (113 )   1
Total Braves Group $ (68 ) $ (28 ) $ (113 ) $ 1
Adjusted OIBDA
Corporate and other   (44 )   (12 )   2     88
Total Braves Group $ (44 ) $ (12 ) $ 2   $ 88
 
 

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,    
2017 2018 % Change 2017 2018 % Change
amounts in millions
Baseball revenue $ 12 $ 22 83 % $ 371 $ 404 9 %
Development revenue   8     10   25 %   15     38   153   %
Total revenue $ 20 $ 32 60 % $ 386 $ 442 15 %
Operating expenses (excluding stock-based compensation included
below):
Other operating expenses (29 ) (14 ) 52 % (281 ) (247 ) 12 %
Selling, general and administrative expenses   (33 )   (29 ) 12 %   (98 )   (101 ) (3 ) %
Adjusted OIBDA $ (42 ) $ (11 ) 74 % $ 7 $ 94 1,243 %
Stock-based compensation (6 ) (2 ) 67 % (46 ) (10 ) 78 %
Depreciation and Amortization   (17 )   (13 ) 24 %   (67 )   (76 ) (13 ) %
Operating income (loss) $ (65 ) $ (26 ) 60 % $ (106 ) $ 8   108   %
 
Regular season home game openings 81 81
Post season home game openings 2 2
Baseball revenue per home game(1)   NA   NA $ 4.6   $ 5.0  
 

(1)

  Baseball revenue per regular season home game opening.
 
 

Baseball revenue is comprised of (i) ballpark operations (including
post-season), (ii) local and national broadcast rights and (iii)
licensing and other shared MLB revenue streams. Development revenue is
derived from the Battery Atlanta mixed-use facilities and primarily
includes lease income.

Baseball revenue grew in the fourth quarter due to revenue generated in
the post-season. For the full year 2018, baseball revenue grew primarily
due to increased ticket sales and concession revenue, as well as
post-season revenue. Development revenue grew in the fourth quarter and
full year 2018 as the project continued to increase occupancy.
Development revenue growth in the fourth quarter of 2018 was partially
offset by the sale of the residential portion of the Battery on October
9, 2018 and the reduction in associated revenue.

Operating income in the full year 2018 was $8 million. The increases in
operating income and adjusted OIBDA for the fourth quarter and full year
2018 were primarily driven by higher revenue and reduced operating
expense due to the acceleration of player salary expense in prior
periods as a result of released and injured players.

The Formula One Group holds an approximate 15.1% intergroup interest in
the Braves Group as of January 31, 2019. 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, 2019 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, 2018 through January 31, 2019, Liberty Media
repurchased approximately 4.2 million Series C Liberty SiriusXM shares
(NASDAQ:LSXMK) at an average cost per share of $38.12 for total cash
consideration of $159 million. The total remaining repurchase
authorization for Liberty Media is approximately $723 million 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 28, 2019.
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, 2018.

Fair Value of Corporate Public Holdings

   
(amounts in millions) 9/30/2018 12/31/2018
Liberty SiriusXM Group
iHeart Debt(1) $ 496 $ 444
Total Liberty SiriusXM Group(2) $ 496 $ 444
Formula One Group
Live Nation Investment(3) 3,794 3,430
Other Public Holdings(4)   275   228
Total Formula One Group $ 4,069 $ 3,658
Braves Group   N/A   N/A
Total Liberty Media $ 4,565 $ 4,102
 

(1)

  Represents $660 million in aggregate principal amount of iHeart
bonds recorded at fair value.

(2)

SiriusXM's investment in Pandora prior to their merger is excluded
from public holdings presented above.

(3)

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 its historical
carrying value of $801 million and $743 million as of September 30,
2018 and December 31, 2018, respectively.

(4)

Represents the carrying value of other public holdings which are
accounted for at fair value.
 
 

Cash and Debt

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

   
(amounts in millions) 9/30/2018 12/31/2018
Cash and Cash Equivalents Attributable to:
Liberty SiriusXM Group(1) $ 126 $ 91
Formula One Group(2) 151 160
Braves Group 78   107  
Total Liberty Consolidated Cash and Cash Equivalents (GAAP) $ 355   $ 358  
 
 
Debt:
SiriusXM senior notes(3) $ 6,500 $ 6,500
2.125% exchangeable senior debentures due 2048(4) 400 400
Margin loans 550 600
Other subsidiary debt(5)   125     444  
Total Attributed Liberty SiriusXM Group Debt $ 7,575   $ 7,944  
Unamortized discount, fair market value adjustment and deferred loan
costs
  (64 )   (86 )
Total Attributed Liberty SiriusXM Group Debt (GAAP) $ 7,511   $ 7,858  
 
1.375% cash convertible notes due 2023(4) 1,000 1,000
1% cash convertible notes due 2023(4) 450 450
2.25% exchangeable senior debentures due 2046(4) 215 213
Live Nation margin loan 350
2.25% exchangeable senior debentures due 2048(4) 385
Formula 1 bank loans 2,902 2,902
Other corporate level debt   34     33  
Total Attributed Formula One Group Debt $ 4,951   $ 4,983  
Fair market value adjustment   314     56  
Total Attributed Formula One Group Debt (GAAP) $ 5,265   $ 5,039  
Formula 1 leverage(6) 6.5x 7.35x
 
Atlanta Braves debt   626     494  
Total Attributed Braves Group Debt $ 626   $ 494  
Deferred loan costs   (4 )   (3 )
Total Attributed Braves Group Debt (GAAP) $ 622   $ 491  
       
Total Liberty Media Corporation Debt (GAAP) $ 13,398   $ 13,388  
 

(1)

  Includes $46 million and $54 million of cash and liquid investments
held at SiriusXM as of September 30, 2018 and December 31, 2018,
respectively.

(2)

Includes $45 million and $30 million of cash and liquid investments
held at Formula 1 as of September 30, 2018 and December 31, 2018,
respectively.

(3)

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

(4)

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

(5)

Includes SiriusXM capital leases and borrowings under the SiriusXM
revolving credit facility.

(6)

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

Total cash and liquid investments attributed to Liberty SiriusXM Group
decreased $35 million during the fourth quarter. Additional borrowing at
Liberty SiriusXM combined with cash from operations at SiriusXM were
more than offset by return of capital at both SiriusXM and Liberty
SiriusXM. Included in the cash and liquid investments balance attributed
to Liberty SiriusXM Group at December 31, 2018 is $54 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 $369 million
during the fourth quarter primarily as a result of increased borrowing
under SiriusXM's revolving credit facility.

Total cash and liquid investments attributed to Formula One Group
increased $9 million during the fourth quarter, primarily as a result of
net borrowings. Cash at Formula 1 decreased modestly due to typical cash
flow seasonality of the business, which sees most Primary F1 revenue
income received in advance, while the majority of costs (including team
payments) are spread more evenly over the course of the season and year.

Total debt attributed to Formula One Group increased $32 million during
the quarter. In December 2018, Liberty Media closed a private offering
for $385 million (including the greenshoe) of 2.25% exchangeable senior
debentures due 2048. A total of 5.8 million shares of Live Nation common
stock are attributable to the debentures. 15.0886 shares of Live Nation
common stock are attributable to each $1,000 original principal amount
of debentures, representing an initial exchange price of $66.28 for each
share of Live Nation. Net proceeds were used to fully repay Liberty
Media's $350 million Live Nation margin loan and for general corporate
purposes. The Live Nation margin loan facility was kept in place, and it
was amended in December 2018 to increase its borrowing capacity to $600
million, extend the maturity to December 10, 2020 and decrease the
interest rate to L+180 bps, among other changes.

Total cash and liquid investments attributed to the Braves Group
increased $29 million in the quarter as cash from operations and net
proceeds from the sale of the residential portion of the Battery more
than offset capital expenditures and debt repayment. The Braves new
spring training facility is expected to open in March 2019 in North
Port, Florida.

Total debt attributed to the Braves Group decreased $132 million during
the fourth quarter primarily due to repayment of mixed-use development
debt associated with the sale of the residential portion of the Battery
and repayment of Braves team level debt. 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. A portion of the funding for this second phase will
come from proceeds from the sale of the residential development at the
Battery.

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 28, 2019. The
call can be accessed by dialing (888) 254-3590 or (323) 994-2093,
passcode 5630393 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, 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, 2018 (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 $ 91 107 160 358
Trade and other receivables, net 233 21 110 364
Other current assets   191   129   40     360  
Total current assets   515   257   310     1,082  
Intergroup interest in the Liberty Braves Group 226 (226 )
Investments in available-for-sale securities and other cost
investments
967 8 303 1,278
Investments in affiliates, accounted for using the equity method 629 92 920 1,641
 
Property and equipment, at cost 2,450 1,137 178 3,765
Accumulated depreciation   (1,112 ) (96 ) (88 )   (1,296 )
  1,338   1,041   90     2,469  
 
Intangible assets not subject to amortization
Goodwill 14,250 180 3,956 18,386
FCC licenses 8,600 8,600
Other   931   143       1,074  
  23,781   323   3,956     28,060  
Intangible assets subject to amortization, net 942 37 4,736 5,715
Other assets   120   47   416     583  
Total assets $ 28,292   1,805   10,957   (226 ) 40,828  
 
Liabilities and Equity
Current liabilities:
Intergroup payable (receivable) $ (4 ) (21 ) 25
Accounts payable and accrued liabilities 854 29 233 1,116
Current portion of debt 3 14 17
Deferred revenue 1,932 54 93 2,079
Other current liabilities   15   8   9     32  
Total current liabilities   2,800   84   360     3,244  
Long-term debt 7,855 477 5,039 13,371
Deferred income tax liabilities 1,673 69 (91 ) 1,651
Redeemable intergroup interest 226 (226 )
Other liabilities   257   511   96     864  
Total liabilities   12,585   1,367   5,404   (226 ) 19,130  
Equity / Attributed net assets 10,599 446 5,550 16,595
Noncontrolling interests in equity of subsidiaries   5,108   (8 ) 3     5,103  
Total liabilities and equity $ 28,292   1,805   10,957   (226 ) 40,828  
 
 

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:
Subscriber revenue $ 4,594 4,594
Formula 1 revenue 1,827 1,827
Other revenue   1,177   442     1,619  
Total revenue 5,771 442 1,827 8,040
Operating costs and expenses, including stock-based compensation:
Cost of subscriber 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 123 247 370
Selling, general and administrative 881 118 204 1,203
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 interest (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 costs of services 5 5
Operating 17 17
Selling, general and administrative   102   11   25   138  
Stock compensation expense $ 156   11   25   192  
 
 

LIBERTY MEDIA CORPORATION
STATEMENT OF OPERATIONS
Twelve
months ended December 31, 2017 (unaudited)

       
  Attributed
Liberty SiriusXM Braves Formula One Consolidated
Group Group Group Liberty
amounts in millions
Revenue:
Subscriber revenue $ 4,473 4,473
Formula 1 revenue 1,783 1,783
Other revenue   952   386     1,338  
Total revenue 5,425 386 1,783 7,594
Operating costs and expenses, including stock-based compensation:
Cost of subscriber services (exclusive of depreciation shown
separately below):
Revenue share and royalties 1,210 1,210
Programming and content 388 388
Customer service and billing 385 385
Other 119 119
Cost of Formula 1 revenue 1,219 1,219
Subscriber acquisition costs 499 499
Other operating expenses 113 281 394
Selling, general and administrative 812 151 199 1,162
Depreciation and amortization   352   67   405   824  
  3,878   499   1,823   6,200  
Operating income (loss) 1,547 (113 ) (40 ) 1,394
Other income (expense):
Interest expense (356 ) (15 ) (220 ) (591 )
Share of earnings (losses) of affiliates, net 29 78 (3 ) 104
Unrealized gain/(loss) on inter-group interest (15 ) 15
Realized and unrealized gains (losses) on financial instruments, net (16 ) (72 ) (88 )
Other, net   (11 ) 3   16   8  
  (354 ) 51   (264 ) (567 )
Earnings (loss) before income taxes 1,193 (62 ) (304 ) 827
Income tax (expense) benefit   466   36   561   1,063  
Net earnings (loss) 1,659 (26 ) 257 1,890
Less net earnings (loss) attributable to the noncontrolling interests   535   (1 ) 2   536  
Net earnings (loss) attributable to Liberty stockholders $ 1,124   (25 ) 255   1,354  
 
 
Programming and content 27 27
Customer service and billing 4 4
Other 5 5
Other operating expenses 16 16
Selling, general and administrative   98   48   32   178  
Stock compensation expense $ 150   48   32   230  
 
 

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 interest, 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 investment 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
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 (356 ) (33 ) (14 ) (403 )
Other investing activities, net   (9 ) 37   6   34  
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 repurchase (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  
 
 

LIBERTY MEDIA CORPORATION
STATEMENT OF CASH FLOWS
INFORMATION

Twelve months ended December 31, 2017
(unaudited)

       
  Attributed
Liberty SiriusXM Braves Formula One Consolidated
Group Group Group Liberty
amounts in millions
Cash flows from operating activities:
Net earnings (loss) $ 1,659 (26 ) 257 1,890
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 352 67 405 824
Stock-based compensation 150 48 32 230
Share of (earnings) loss of affiliates, net (29 ) (78 ) 3 (104 )
Unrealized (gains) losses on intergroup interest, net 15 (15 )
Realized and unrealized (gains) losses on financial instruments, net 16 72 88
Noncash interest expense 7 3 6 16
Losses (gains) on dilution of investments in affiliate (3 ) (3 )
Loss on early extinguishment of debt 35 5 8 48
Deferred income tax expense (benefit) (492 ) 2 (574 ) (1,064 )
Intergroup tax allocation (6 ) (39 ) 45
Intergroup tax (payments) receipts 4 15 (19 )
Other charges (credits), net (4 ) 18 (10 ) 4
Changes in operating assets and liabilities
Current and other assets 30 (57 ) 77 50
Payables and other liabilities   127   (15 ) (359 ) (247 )
Net cash provided (used) by operating activities   1,849   (42 ) (75 ) 1,732  
Cash flows from investing activities:
Cash proceeds from dispositions of investments 5 16 21
Net cash paid for the acquisition of Formula 1 (1,647 ) (1,647 )
Investments in equity method affiliates and debt and equity
securities
(851 ) (2 ) (9 ) (862 )
Capital expended for property and equipment (288 ) (219 ) (10 ) (517 )
Other investing activities, net   (115 ) (5 ) (12 ) (132 )
Net cash provided (used) by investing activities   (1,254 ) (221 ) (1,662 ) (3,137 )
Cash flows from financing activities:
Borrowings of debt 4,553 544 1,600 6,697
Repayments of debt (3,216 ) (218 ) (1,673 ) (5,107 )
Proceeds from issuance of Series C Liberty Formula One common stock 1,938 1,938
Subsidiary shares repurchased by subsidiary (1,409 ) (1,409 )
Cash dividends paid by subsidiary (60 ) (60 )
Taxes paid in lieu of shares issued for stock-based compensation (100 ) (30 ) (5 ) (135 )
Other financing activities, net   (35 )   (13 ) (48 )
Net cash provided (used) by financing activities   (267 ) 296   1,847   1,876  
Effect of foreign exchange rates on cash, cash equivalents and
restricted cash
      4   4  
Net increase (decrease) in cash, cash equivalents and restricted cash 328 33 114 475
Cash, cash equivalents and restricted cash at beginning of period   297   107   168   572  
Cash, cash equivalents and restricted cash at end of period $ 625   140   282   1,047  
 
 

NON-GAAP FINANCIAL MEASURES

SCHEDULE 1

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 revenue less operating expenses, and selling, general
and administrative expenses, excluding all stock based compensation, and
excludes from that definition depreciation and amortization,
restructuring and impairment charges and separately reported legal
settlements that are included in the measurement of operating income
pursuant to GAAP.

Liberty Media believes adjusted OIBDA is an important indicator of the
operational strength and performance of its businesses, including each
business' ability to service debt and fund capital expenditures. 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, 2017 and December
31, 2018, respectively.

         
(amounts in millions) 4Q17 4Q18 2017 2018
Liberty SiriusXM Group
Revenue $ 1,404 $ 1,496 $ 5,425 $ 5,771
 
Adjusted OIBDA 539 570 2,094 2,214
Depreciation and amortization (82 ) (95 ) (352 ) (369 )
Stock compensation expense (37 ) (39 ) (150 ) (156 )
Legal settlements and reserves(1)   (45 )       (45 )   (69 )
Operating income $ 375   $ 436   $ 1,547   $ 1,620  
 
Formula One Group
Revenue $ 570 $ 481 $ 1,783 $ 1,827
 
Adjusted OIBDA 138 92 397 375
Depreciation and amortization (110 ) (115 ) (405 ) (460 )
Stock compensation expense   (4 )   (6 )   (32 )   (25 )
Operating income (loss) $ 24   $ (29 ) $ (40 ) $ (110 )
 
Braves Group
Revenue $ 20 $ 32 $ 386 $ 442
 
Adjusted OIBDA (44 ) (12 ) 2 88
Depreciation and amortization (17 ) (14 ) (67 ) (76 )
Stock compensation expense   (7 )   (2 )   (48 )   (11 )
Operating income (loss) $ (68 ) $ (28 ) $ (113 ) $ 1  
 
Liberty Media Corporation (Consolidated)
Revenue $ 1,994 $ 2,009 $ 7,594 $ 8,040
 
Adjusted OIBDA 633 650 2,493 2,677
Depreciation and amortization (209 ) (224 ) (824 ) (905 )
Stock compensation expense (48 ) (47 ) (230 ) (192 )
Legal settlements and reserves(1)   (45 )       (45 )   (69 )
Operating income $ 331   $ 379   $ 1,394   $ 1,511  
 

(1)

  During the fourth quarter of 2017 and second quarter of 2018,
SiriusXM recorded expenses of $45 million and $69 million,
respectively, related to music royalty legal settlements and
reserves. These expenses are included in the revenue share and
royalties line item in SiriusXM's consolidated financial statements
for the years ended December 31, 2017 and December 31, 2018, but
have been excluded from Adjusted OIBDA for the corresponding periods
as these expenses were not incurred as part of SiriusXM's normal
operations for the periods, and the lump sum amounts do not relate
to the on-going 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
income as well as certain other charges discussed below. Adjusted EBITDA
is a Non-GAAP financial measure that excludes (if applicable): (i)
certain adjustments as a result of the purchase price accounting for the
XM Merger, (ii) share-based payment expense and (iii) 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 its 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 its 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 related to the historical use of sound recordings,
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 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. 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 operating results after giving effect for these costs,
should refer to net income as disclosed in SiriusXM's 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,
2017 2018
($ in thousands)
Net income: $ 647,908 $ 1,175,893
Add back items excluded from Adjusted EBITDA:
Purchase price accounting adjustments:
Revenues 7,251 7,251
Sound recording legal settlements and reserves 45,100 69,144
Acquisition related costs 3,158
Share-based payment expense 124,069 133,175
Depreciation and amortization 298,602 300,720
Interest expense 345,820 350,073
Loss on extinguishment of debt 43,679
Other income (12,844 ) (43,699 )
Income tax expense   616,301     244,681  
Adjusted EBITDA $ 2,115,886   $ 2,240,396  

View Comments and Join the Discussion!
 
Lightning Fast
Market News Service
$199 Free 14 Day Trial