Liberty Media Reports First Quarter 2013 Financial Results
Liberty Media Reports First Quarter 2013 Financial Results
ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Liberty Media Corporation ("Liberty Media") (Nasdaq: LMCA, LMCB) today reported first quarter 2013 results. Highlights include(1):
SiriusXM reported strong Q1 results
Subscribers grew by 453,000 to a record 24.4 million
Record revenue of $897 million, up 12%
Net income of $124 million, up 15%
Adjusted EBITDA(2) grew 26% to $262 million
Named Jim Meyer CEO
Completed investment in Charter Communications on May 1
Own 27.3% of the outstanding equity
Four Liberty designated directors appointed to Charter's board
Secured $1.4 billion in financing
Repurchased $71 million of Liberty Media shares from February 1 through April 30
"We are extremely pleased with the operating results of our newest subsidiary, SiriusXM, which grew its subscriber base to over 24 million," said Greg Maffei, President and CEO of Liberty Media. "After an extensive search, Jim Meyer was named CEO of SiriusXM. Jim has been an integral part of SiriusXM's success and we are excited for him to lead the company going forward. Last week we closed our investment in Charter Communications and secured $1.4 billion of financing. We look forward to working with Tom Rutledge, his team, and our fellow board members."
Liberty Media
On January 11, 2013 Liberty Media was separated from Starz. Therefore, as of the first quarter of 2013 Liberty began presenting Starz as discontinued operations. Liberty acquired its controlling interest in SiriusXM on January 18, 2013 and has applied purchase accounting in consolidating the results of SiriusXM since that date. Prior to the acquisition of Liberty's controlling interest, we accounted for our investment in SiriusXM using the equity method.
Liberty Media's revenue increased $754 million to $789 million in the first quarter. Adjusted OIBDA increased $288 million to $271 million and operating income increased $192 million to $160 million. The increase in revenue, adjusted OIBDA and operating income was primarily due to the acquisition of a controlling interest in SiriusXM as discussed above.
SiriusXM
SiriusXM reported its stand-alone first quarter results on April 30, 2013. For presentation purposes in this release, we include below 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 believes the presentation of financial results as reported by SiriusXM is useful to investors as the comparability of those results are best understood in the context of SiriusXM's historical financial presentation. For a reconciliation of revenue, adjusted OIBDA (as defined by Liberty) and operating income for SiriusXM's stand-alone operating results as reported by SiriusXM, to those results as reported by Liberty, see Liberty's Form 10-Q for the quarter ended March 31, 2013.
Highlights of SiriusXM's earnings release included the following:
Subscribers grew by 453,000 to a record 24.4 million
Record revenue of $897 million, up 12%
Net Income of $124 million, up 15%
Adjusted EBITDA(2) grew 26% to a record $262 million
Free Cash Flow guidance increased
SiriusXM repurchased 209 million shares of common stock
All such amounts are representative of SiriusXM's stand-alone operating results and are not indicative of what is included in Liberty's financial statements due to certain purchase accounting adjustments resulting from our January 18, 2013 acquisition of SiriusXM. 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.
Share Repurchases
From February 1, 2013 through April 30, 2013, 0.6 million shares of Series A Liberty Capital common stock (NAS: LMCA) were purchased at an average cost per share of $110.11 for total cash consideration of $71.0 million. After the completion of the Starz separation on January 11, 2013 through April 30, 2013, 1.1 million shares of Series A Liberty Capital common stock (NAS: LMCA) were purchased at an average cost per share of $110.15 for total cash consideration of $123.0 million. Since the reclassification of the original Liberty Capital tracking stock on March 4, 2008 through April 30, 2013, 59.6 million shares have been repurchased at an average cost per share of $34.01 for total cash consideration of $2.0 billion. These repurchases represent 46.1% of the shares outstanding at the time of the introduction of the original Liberty Capital stock. Liberty Media has approximately $327.0 million remaining under its current stock repurchase authorization.
Liberty Media Corporation owns interests in a broad range of media, communications and entertainment businesses, including its subsidiaries SiriusXM, Atlanta National League Baseball Club, Inc. and TruePosition, Inc., its interests in Charter Communications, Live Nation Entertainment and Barnes & Noble, and minority equity investments in Time Warner Inc., Time Warner Cable, and Viacom.
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 11:00 a.m. (ET) on May 8, 2013. For information regarding how to access the call, please see "Important Notice" later in this document. | |||
2) | For definitions of adjusted OIBDA and Adjusted EBITDA (as defined by SiriusXM) and applicable reconciliations see the accompanying schedules. | |||
NOTES
Unless otherwise noted, the foregoing discussion compares financial information for the three months ended March 31, 2013 to the same period in 2012.
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-Q.
Fair Value of Public Holdings | ||||||||
(amounts in millions) | 12/31/2012 | 3/31/2013 | ||||||
SiriusXM debt and equity(1) | $ | 9,621 | $ | -- | ||||
Live Nation debt and equity(2) | 494 | 668 | ||||||
Barnes & Noble investment(3) | 262 | 275 | ||||||
Other public holdings(4) | 825 | 887 | ||||||
Total Liberty Media | $ | 11,202 | $ | 1,830 | ||||
(1) | Represents the fair value of Liberty Media's debt and equity investments in SiriusXM. In accordance with GAAP, prior to consolidation, Liberty Media accounted for its equity investment in SiriusXM using the equity method of accounting and included this in its consolidated balance sheet at historical carrying value of $2,766 million at December 31, 2012. As previously disclosed, Liberty Media began consolidating SiriusXM in the first quarter of 2013. | |
(2) | Represents the fair value of Liberty Media's debt and equity investments. 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 $406 million and $393 million at December 31, 2012 and March 31, 2013, respectively. | |
(3) | Represents the carrying value of Liberty Media's preferred equity investment in Barnes & Noble, which is accounted for at fair value. | |
(4) | Represents Liberty Media's 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) | 12/31/2012 | 3/31/2013 | ||||||
Cash and liquid investments(1)(2) | $ | 670 | $ | 1,991 | ||||
Less: Short-term marketable securities | 67 | 42 | ||||||
Less: Long-term marketable securities | -- | 49 | ||||||
Total Liberty Media Cash (GAAP) | $ | 603 | $ | 1,900 | ||||
Debt: | ||||||||
SiriusXM senior notes(3)(4) | -- | 1,700 | ||||||
SiriusXM exchangeable notes(3)(4) | -- | 491 | ||||||
Other debt | -- | 10 | ||||||
Total Liberty Media Debt | $ | -- | $ | 2,201 | ||||
Unamortized premium | -- | 218 | ||||||
Total Liberty Media Debt (GAAP) | $ | -- | $ | 2,419 | ||||
(1) | Includes $67 million and $42 million of short-term marketable securities with an original maturity greater than 90 days as of December 31, 2012 and March 31, 2013, respectively. | |
(2) | Includes $49 million of marketable securities with an original maturity greater than one year as of March 31, 2013, which is reflected in investments in available-for-sale securities in Liberty's condensed consolidated balance sheet. | |
(3) | SiriusXM became a consolidated subsidiary of Liberty Media in the first quarter of 2013. | |
(4) | Outstanding principal amount of Senior Notes and Exchangeable Senior Subordinated Notes with no increase for the premium resulting from purchase accounting. | |
Total Liberty Media group cash and liquid investments increased $1.3 billion, primarily as a result of $1.2 billion in cash distributed from Starz, net cash acquired from the consolidation of SiriusXM and cash provided by operations during the quarter, primarily at SiriusXM. The cash inflows were partially offset by repurchases of common stock by Liberty and SiriusXM.
Included in consolidated cash and liquid investments is $207 million at SiriusXM. Although SiriusXM is a consolidated subsidiary, they are a separate public company with a significant noncontrolling interest, therefore Liberty may not have ready access to that cash. Total Liberty Media debt increased by $2.2 billion, as a result of debt acquired from the consolidation of SiriusXM.
Important Notice: Liberty Media Corporation (Nasdaq: LMCA, LMCB) President and CEO, Greg Maffei, will discuss Liberty Media's earnings release in a conference call which will begin at 11:00 a.m. (ET) on May 8, 2013. The call can be accessed by dialing (877) 741-4241 or (719) 325-4781 at least 10 minutes prior to the start time. Replays of the conference call can be accessed until 11:00 a.m. (ET) May 15, 2013, by dialing (888) 203-1112 or (719) 457-0820 plus the pass code 1316456. 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 prospects, new service and product launches, the continuation of our stock repurchase plans, our recent investment in Charter Communications, our consolidation of SiriusXM, 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, competitive issues, regulatory matters affecting our businesses, continued access to capital on terms acceptable to Liberty Media, changes in law and market conditions conducive to stock repurchases.These forward-looking statements speak only as of the date of this presentation, 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 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 presentation.
LIBERTY MEDIA CORPORATION | ||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) | ||||||||||||||
12/31/2012 | 3/31/2013 | |||||||||||||
amounts in millions | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 603 | 1,900 | |||||||||||
Trade and other receivables, net | 25 | 237 | ||||||||||||
Deferred income tax assets | -- | 1,018 | ||||||||||||
Other current assets | 211 | 303 | ||||||||||||
Assets of discontinued operations - current | 1,372 | -- | ||||||||||||
Total current assets | 2,211 | 3,458 | ||||||||||||
Investments in available-for-sale securities and other cost investments | 1,392 | 1,266 | ||||||||||||
Investments in affiliates, accounted for using the equity method | 3,341 | 870 | ||||||||||||
Property and equipment, at cost | 329 | 1,963 | ||||||||||||
Accumulated depreciation | (172 | ) | (180 | ) | ||||||||||
157 | 1,783 | |||||||||||||
Intangible assets not subject to amortization | ||||||||||||||
Goodwill | 200 | 14,215 | ||||||||||||
FCC licenses | -- | 8,600 | ||||||||||||
Other | 144 | 1,074 | ||||||||||||
344 | 23,889 | |||||||||||||
Intangible assets subject to amortization, net | 108 | 1,039 | ||||||||||||
Other assets, at cost, net of accumulated amortization | 32 | 91 | ||||||||||||
Assets of discontinued operations | 740 | -- | ||||||||||||
Total assets | $ | 8,325 | 32,396 | |||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ 35 | 631 | ||||||||||||
Current portion of debt | -- | 4 | ||||||||||||
Deferred revenue | 24 | 1,626 | ||||||||||||
Deferred credit on executory contracts | -- | 166 | ||||||||||||
Other current liabilities | 33 | 25 | ||||||||||||
Liabilities of discontinued operations - current | 293 | -- | ||||||||||||
Total current liabilities | 385 | 2,452 | ||||||||||||
Long-term debt | -- | 2,415 | ||||||||||||
Deferred income tax liabilities | 817 | 2,346 | ||||||||||||
Deferred revenue | 37 | 147 | ||||||||||||
Other liabilities | 90 | 285 | ||||||||||||
Liabilities of discontinued operations | 564 | -- | ||||||||||||
Total liabilities | 1,893 | 7,645 | ||||||||||||
Equity: | ||||||||||||||
Total stockholders' equity | 6,440 | 14,277 | ||||||||||||
Noncontrolling interests in equity of subsidiaries | (8 | ) | 10,474 | |||||||||||
Total equity | 6,432 | 24,751 | ||||||||||||
Commitments and contingencies | ||||||||||||||
Total liabilities and equity | $ | 8,325 | 32,396 | |||||||||||
LIBERTY MEDIA CORPORATION | |||||||||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) | |||||||||||
Three months ended | |||||||||||
3/31/2012 | 3/31/2013 | ||||||||||
Amount in millions | |||||||||||
REVENUE: | |||||||||||
Subscriber revenue | $ | -- | 635 | ||||||||
Other revenue | 35 | 154 | |||||||||
TOTAL REVENUE | 35 | 789 | |||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||
Cost of subscriber services(1) | |||||||||||
Revenue share and royalties | -- | 124 | |||||||||
Programming and content | -- | 54 | |||||||||
Customer service and billing | -- | 66 | |||||||||
Other | -- | 22 | |||||||||
Subscriber acquisition cost | -- | 97 | |||||||||
Other operating expense(1) | 25 | 42 | |||||||||
Selling, general and administrative(1) | 33 | 154 | |||||||||
Depreciation and amortization | 9 | 70 | |||||||||
67 | 629 | ||||||||||
Operating income (loss) | (32 | ) | 160 | ||||||||
OTHER INCOME (EXPENSE): | |||||||||||
Interest expense | (3 | ) | (11 | ) | |||||||
Dividend and interest income | 22 | 12 | |||||||||
Share of earnings (losses) of affiliates, net | 12 | 17 | |||||||||
Realized and unrealized gains (losses) on financial instruments, net | 111 | 97 | |||||||||
Gains (losses) on transactions, net | -- | ||||||||||
