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Liberty Media Corporation Reports Second Quarter 2019 Financial Results

Published : Thursday, August 8, 2019, 5:15 am
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ENGLEWOOD, Colo.--(BUSINESS WIRE)--Liberty Media Corporation ("Liberty Media" or “Liberty”) (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported second quarter 2019 results. Highlights include(1):


  • Attributed to Liberty SiriusXM Group
    • SiriusXM reported very strong second quarter 2019 financial results
      • Second quarter revenue increased to $2.0 billion; pro forma growth of 9%
      • Net income of $263 million; diluted EPS of $0.06
      • Adjusted EBITDA(2) climbed 22% to record $618 million
      • $898 million of common stock repurchased in the second quarter; total capital returns of nearly $1.9 billion to date in 2019
      • SiriusXM increased 2019 revenue and adjusted EBITDA guidance
    • Liberty Media’s ownership of SiriusXM stood at 71.1% as of July 26th
    • From May 1st through July 31st, Liberty repurchased 2.2 million LSXMK shares at an average price per share of $38.18 and total cash consideration of $85 million
  • Attributed to Formula One Group
    • Announced return of Dutch Grand Prix beginning in 2020 and renewal of British and Australian races
    • Kicked off 2019 Formula 1 New Balance Esports Series with record breaking 109,000 participants; Pro Draft completed by all ten teams on July 17th
    • Announced Season 2 of Netflix docuseries “Formula 1: Drive to Survive” which will air in 2020 and feature all ten F1 teams
  • Attributed to Braves Group
    • Team performance continues to be strong, with 68-48 record as of August 7th
    • SunTrust Park will host 2021 MLB All-Star Game

“It was another outstanding quarter for SiriusXM, again setting financial records. They further established their leadership and unique position in content, announcing a groundbreaking collaboration with Drake and hosting their first-ever combined event with Pandora featuring Lady Gaga,” said Greg Maffei, Liberty Media President and CEO. “Formula 1 produced some phenomenal racing and the Braves continue to lead the NL East.”

Unless otherwise noted, the following discussion compares financial information for the three months ended June 30, 2019 to the same period in 2018.

LIBERTY SIRIUSXM GROUP – The following table provides the financial results attributed to Liberty SiriusXM Group for the second quarter of 2019. In the second quarter, approximately $8 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Liberty SiriusXM Group.

 

 

2Q18

 

2Q19

 

% Change

 

 

amounts in millions

 

 

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

SiriusXM

 

$

1,432

 

 

$

1,977

 

 

38

%

Total Liberty SiriusXM Group

 

$

1,432

 

 

$

1,977

 

 

38

%

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

SiriusXM

 

 

344

 

 

 

421

 

 

22

%

Corporate and other

 

 

(11

)

 

 

(8

)

 

27

%

Total Liberty SiriusXM Group

 

$

333

 

 

$

413

 

 

24

%

Adjusted OIBDA

 

 

 

 

 

 

 

 

 

SiriusXM

 

 

542

 

 

 

622

 

 

15

%

Corporate and other

 

 

(6

)

 

 

(4

)

 

33

%

Total Liberty SiriusXM Group

 

$

536

 

 

$

618

 

 

15

%

SiriusXM completed the acquisition of Pandora on February 1, 2019. The financial results above include the results of Pandora for the three months ended June 30, 2019 but not for the three months ended June 30, 2018. Pro forma results for SiriusXM including Pandora for all periods presented, excluding acquisition accounting adjustments, can be found in Liberty Media’s Form 10-Q for the quarter ended June 30, 2019.

SiriusXM is a separate publicly traded company and additional information about SiriusXM can be obtained through its website and filings with the Securities and Exchange Commission. SiriusXM reported its stand-alone second quarter results on July 30, 2019. For additional detail on SiriusXM’s financial results for the second quarter, 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.

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

FORMULA ONE GROUP – The following table provides the financial results attributed to the Formula One Group for the second quarter of 2019. In the second quarter, the Formula One Group incurred approximately $10 million of corporate level selling, general and administrative expense (including stock-based compensation expense).

“Formula 1 heads into our summer break on the heels of some unforgettable races. We’re excited by the growing competitiveness of Red Bull and Ferrari and the return of Honda as a winning engine supplier,” said Chase Carey, Formula 1 Chairman and CEO. “We were thrilled to announce that season two of the Netflix Series: ‘Formula 1: Drive to Survive’ will air in 2020 and will feature all ten teams. We are pleased with our growth in revenue and profitability and on target to hit our goals for 2019.”

 

 

2Q18

 

2Q19

 

 

amounts in millions

Formula One Group

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Formula 1

 

$

585

 

 

$

620

 

Total Formula One Group

 

$

585

 

 

$

620

 

Operating Income (Loss)

 

 

 

 

 

 

Formula 1

 

$

14

 

 

$

26

 

Corporate and other

 

 

(8

)

 

 

(12

)

Total Formula One Group

 

$

6

 

 

$

14

 

Adjusted OIBDA

 

 

 

 

 

 

Formula 1

 

$

134

 

 

$

145

 

Corporate and other

 

 

(6

)

 

 

(9

)

Total Formula One Group

 

$

128

 

 

$

136

 

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

F1 Operating Results

 

2Q18

 

2Q19

 

% Change

 

amounts in millions

 

 

 

Primary Formula 1 revenue

$

491

 

 

$

531

 

 

8

 

%

Other Formula 1 revenue

 

94

 

 

 

89

 

 

(5

)

%

Total Formula 1 revenue

$

585

 

 

$

620

 

 

6

 

%

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

 

 

 

 

 

 

 

 

Team payments

 

(307

)

 

 

(335

)

 

(9

)

%

Other cost of Formula 1 revenue

 

(106

)

 

 

(106

)

 

%

Cost of Formula 1 revenue

$

(413

)

 

$

(441

)

 

(7

)

%

Selling, general and administrative expenses

 

(38

)

 

 

(34

)

 

11

 

%

Adjusted OIBDA

$

134

 

 

$

145

 

 

8

 

%

Stock-based compensation

 

(5

)

 

 

(6

)

 

(20

)

%

Depreciation and Amortization

 

(115

)

 

 

(113

)

 

2

 

%

Operating income

$

14

 

 

$

26

 

 

86

 

%

 

 

 

 

 

 

 

 

 

Number of races in period

 

7

 

 

 

7

 

 

 

 

Primary F1 revenue is comprised of (i) race promotion fees, (ii) broadcasting fees and (iii) advertising and sponsorship fees. Seven races took place in both the second quarter of 2018 and 2019, but the specific races held differed.

Race promotion revenue decreased due to the differing fees associated with specific races held in the second quarter of 2019 compared to 2018, partially offset by rate increases in the underlying contracts. Broadcast revenue increased primarily due to contractual rate increases. Advertising and sponsorship revenue increased due to revenue from new sponsorship agreements entered into beginning in the second half of 2018. Other F1 revenue decreased in the second quarter primarily due to the mix of races, which resulted in lower TV production and Paddock Club revenue.

Operating income and adjusted OIBDA(2) increased in the second quarter as revenue growth more than offset elevated costs. Cost of F1 revenue increased primarily due to higher team payments driven by our improved performance and the pro rata recognition of such payments across the race season. Selling, general and administrative expense decreased modestly primarily driven by the impact of foreign exchange rate fluctuations.

F1’s total net debt to covenant OIBDA ratio, as defined in F1’s credit facilities for covenant calculations, was approximately 5.6x as of June 30, 2019, as compared to a maximum allowable leverage ratio of 8.25x. The race calendar variances between 2018 and 2019 resulted in income from 22 races falling in the trailing twelve months measured for F1’s covenant calculations as of June 30, 2019.

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 July 31, 2019.

BRAVES GROUP - The following table provides the financial results attributed to the Braves Group for the second quarter of 2019. In the second quarter, approximately $2 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Braves Group.

 

 

2Q18

 

2Q19

 

 

amounts in millions

Braves Group

 

 

 


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