Liberty Media Reports Second Quarter 2013 Financial Results
Liberty Media Reports Second Quarter 2013 Financial Results
ENGLEWOOD, Colo.--(BUSINESS WIRE)-- Liberty Media Corporation ("Liberty Media") (Nasdaq: LMCA, LMCB) today reported second quarter 2013 results. Highlights include(1):
SiriusXM reported strong Q2 results
Subscriber base grew to 25.1 million
Revenue of $940 million, up 12% from the second quarter of 2012
Adjusted EBITDA(2) grew 19% to $283 million
Net income of $126 million
Repurchased close to $1.3 billion in shares year to date
Due to SiriusXM's share buybacks, Liberty's stake increased to over 53%
Charter Communications stock up over 35% since investment completed
Liberty stake valued at $3.5 billion
Atlanta Braves in 1st place in the NL East by 12 games
"We are very pleased with the job Jim and his management team did this quarter. Consumers love SiriusXM and the operating performance of the business reflects that," said Greg Maffei, President and CEO of Liberty Media. "Charter Communications has proved an attractive investment, generating a greater than 35% return since we completed the investment."
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 and consolidated the results of SiriusXM since that date. Prior to the acquisition of Liberty's controlling interest, we accounted for the investment in SiriusXM using the equity method.
Liberty Media's revenue increased $943 million to $1,078 million in the second quarter. Adjusted OIBDA(2) increased $354 million to $372 million and operating income increased $234 million to $236 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 second quarter results on July 26, 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 Media 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 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-Q for the quarter ended June 30, 2013.
Highlights of SiriusXM's earnings release included the following:
Record revenue of $940 million, up 12% from second quarter of 2012
Net income of $126 million
Adjusted EBITDA(2) grew 19% to a record $283 million
Raised full year EBITDA guidance to $1.14 billion
Repurchased close to $1.3 billion in shares year to date
All such amounts are representative of SiriusXM's stand-alone operating results and are not indicative of what is included in Liberty Media'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
There were no repurchases of Liberty Media Series A common stock (NAS: LMCA) stock from May 1, 2013 through July 31, 2013. Liberty Media has approximately $327 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 12:15 p.m. (ET) on August 6, 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 June 30, 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 Corporate Public Holdings
(amounts in millions) | 3/31/2013 | 6/30/2013 | ||||||||||||||
Charter Communications(1) | $ | — | $ | 3,326 | ||||||||||||
Live Nation debt and equity(2) | 668 | 831 | ||||||||||||||
Barnes & Noble investment(3) | 275 | 266 | ||||||||||||||
Other public holdings(4) | 887 | 949 | ||||||||||||||
Total Liberty Media | $ | 1,830 | $ | 5,372 | ||||||||||||
(1) | Liberty Media acquired an approximate 27% beneficial ownership interest in Charter Communications, Inc. during the quarter ended June 30, 2013. In accordance with GAAP, Liberty Media accounts for its investment in the equity of Charter Communications using the equity method of accounting and includes it in its consolidated balance sheet at its historical carrying value of $2,528 million at June 30, 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 $393 million and $405 million at March 31, 2013 and June 30, 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) | 3/31/2013 | 6/30/2013 | ||||||||||||
Cash and liquid investments(1)(2)(3) | $ | 1,991 | $ | 937 | ||||||||||
Less: Short-term marketable securities | 42 | — | ||||||||||||
Less: Long-term marketable securities | 49 | — | ||||||||||||
Total Liberty Media Cash (GAAP) | $ | 1,900 | $ | 937 | ||||||||||
Debt: | ||||||||||||||
SiriusXM senior notes(4) | 1,700 | 2,570 | ||||||||||||
SiriusXM exchangeable notes(4) | 491 | 491 | ||||||||||||
Margin loans(5) | — | 1,120 | ||||||||||||
Other debt | 10 | 10 | ||||||||||||
Total Liberty Media Debt | $ | 2,201 | $ | 4,191 | ||||||||||
Unamortized premium | 218 | 172 | ||||||||||||
Total Liberty Media Debt (GAAP) | $ | 2,419 | $ | 4,363 | ||||||||||
(1) | Includes $42 million of short-term marketable securities with an original maturity greater than 90 days as of March 31, 2013. | ||
(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) | Includes $207 million and $652 million of cash and liquid investments held at SiriusXM as of March 31, 2013 and June 30, 2013, respectively. | ||
(4) | Outstanding principal amount of Senior Notes and Exchangeable Senior Subordinated Notes with no increase for the premium resulting from purchase accounting. | ||
(5) | Includes margin loans, net of repayments, entered into during the quarter ended June 30, 2013 in connection with the Charter Communications investment. | ||
Total Liberty Media cash and liquid investments decreased $1.1 billion, primarily as a result of the investment in Charter Communications during the second quarter of 2013 for approximately $2.6 billion and repurchases of stock by SiriusXM. These cash outflows were partially offset by $1.4 billion from new loan arrangements entered into during the quarter as part of the Charter acquisition, cash flows from operations at SiriusXM, and net borrowings at SiriusXM during the quarter. Included in the second quarter consolidated cash and liquid investments is $652 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 billion as a result of margin loans entered into during the quarter as part of the Charter Communications acquisition and $1 billion of senior notes issued by SiriusXM during the quarter, net of other debt repayments.
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 12:15 p.m. (ET) on August 6, 2013. The call can be accessed by dialing (800) 967-7138 or (719) 457-2601 at least 10 minutes prior to the start time. Replays of the conference call can be accessed until 12:15 p.m. (ET) August 13, 2013, by dialing (888) 203-1112 or (719) 457-0820 plus the passcode 5856928. 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, growth of SiriusXM's subscriber base, the continuation of our stock repurchase plan, the repurchase activity of SiriusXM, the return on our investment in Charter Communications, 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 | 6/30/2013 | |||||||||||||
amounts in millions | ||||||||||||||
Assets | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 603 | 937 | |||||||||||
Trade and other receivables, net | 25 | 259 | ||||||||||||
Deferred income tax assets | — | 939 | ||||||||||||
Other current assets | 211 | 230 | ||||||||||||
Assets of discontinued operations - current | 1,372 | — | ||||||||||||
Total current assets | 2,211 | 2,365 | ||||||||||||
Investments in available-for-sale securities and other cost investments | 1,392 | 1,270 | ||||||||||||
Investments in affiliates, accounted for using the equity method | 3,341 | 3,415 | ||||||||||||
Property and equipment, at cost | 329 | 2,023 | ||||||||||||
Accumulated depreciation | (172 | ) | (250 | ) | ||||||||||
157 | 1,773 | |||||||||||||
Intangible assets not subject to amortization | ||||||||||||||
Goodwill | 200 | 14,221 | ||||||||||||
FCC licenses | — | 8,600 | ||||||||||||
Other | 144 | 1,074 | ||||||||||||
344 | 23,895 | |||||||||||||
Intangible assets subject to amortization, net | 108 | 987 | ||||||||||||
Other assets, at cost, net of accumulated amortization | 32 | 179 | ||||||||||||
Assets of discontinued operations | 740 | — | ||||||||||||
Total assets | $ | 8,325 | 33,884 | |||||||||||
Liabilities and Equity | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 35 | 651 | |||||||||||
Current portion of debt | — | 4 | ||||||||||||
Deferred revenue | 24 | 1,619 | ||||||||||||
Deferred credit on executory contracts | — | 106 | ||||||||||||
Other current liabilities | 33 | 44 | ||||||||||||
Liabilities of discontinued operations - current | 293 | — | ||||||||||||
Total current liabilities | 385 | 2,424 | ||||||||||||
Long-term debt | — | 4,359 | ||||||||||||
Deferred income tax liabilities | 817 | 2,364 | ||||||||||||
Deferred revenue | 37 | 148 | ||||||||||||
Other liabilities | 90 | 276 | ||||||||||||
Liabilities of discontinued operations | 564 | — | ||||||||||||
Total liabilities | 1,893 | 9,571 | ||||||||||||
Equity: | ||||||||||||||
Total stockholders' equity | 6,440 | 14,376 | ||||||||||||
Noncontrolling interests in equity of subsidiaries | (8 | ) | 9,937 | |||||||||||
Total equity | 6,432 | 24,313 | ||||||||||||
Commitments and contingencies | ||||||||||||||
Total liabilities and equity | $ | 8,325 | 33,884 | |||||||||||
LIBERTY MEDIA CORPORATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||
6/30/2012 | 6/30/2013 | 6/30/2012 | 6/30/2013 | |||||||||||||||||||
amounts in millions | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||
Subscriber revenue | $ | — | 813 | — | 1,448 | |||||||||||||||||
Other revenue | 135 | 265 | 170 | 419 | ||||||||||||||||||
Total revenue | 135 | 1,078 | 170 | 1,867 | ||||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||
Cost of subscriber services | ||||||||||||||||||||||
Revenue share and royalties | — | 159 | — | 283 | ||||||||||||||||||
Programming and content(1) | — | 61 | — | 115 | ||||||||||||||||||
Customer service and billing(1) | — | 81 | — | 147 | ||||||||||||||||||
Other(1) | — | 27 | — | 49 | ||||||||||||||||||
Subscriber acquisit | ||||||||||||||||||||||
