Stock Quote

Liberty Media Corporation Reports First Quarter 2023 Financial Results

Liberty Media Corporation ("Liberty Media" or “Liberty”) (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported first quarter 2023 results. Headlines include(1):

  • Targeting completion of planned split-off of Atlanta Braves Holdings, Inc. and reclassification of tracking stocks to create Liberty Live Group tracking stock by end of second quarter 2023
  • Attributed to Liberty SiriusXM Group
    • SiriusXM reported first quarter 2023 operating and financial results
      • First quarter 2023 revenue of $2.14 billion; down 2% year-over-year
      • Net income of $233 million, down from $309 million in 2022; diluted EPS of $0.06
      • Adjusted EBITDA(2) of $625 million and free cash flow(2) of $144 million
      • SiriusXM increased full-year adjusted EBITDA and free cash flow guidance on April 27th
    • Liberty Media’s ownership of SiriusXM was 82.9% as of April 25th
    • Issued $575 million of 3.75% LSXMA convertible senior notes and used proceeds, along with cash on hand, to repurchase $591 million aggregate principal of 1.375% cash convertible notes and $112 million aggregate adjusted principal of 2.125% exchangeable senior debentures
  • Attributed to Formula One Group
    • Announced multiple updates to sponsorship agreements, including extending MSC Cruises as Global Partner, welcoming Puma as Official Provider of F1’s sporting apparel and naming Paramount+ and Liqui Moly as Official Partners
    • Extended agreement with ESPN to broadcast F1 in Latin America and Caribbean through 2025
    • Las Vegas Grand Prix Paddock Building construction at 60% completion with expected occupancy by end of September
    • Formula 1 leverage at quarter-end of 2.2x will trigger permanent reduction in existing Term Loan B margin from 3.25% to 3.00%
    • Formula One Group paid $202 million in exchange for the cancellation of 3.1 million notional FWONA shares underlying intergroup interest held at Liberty SiriusXM Group corresponding to the portion of 1.375% cash convertible notes repurchased
  • Attributed to Braves Group
    • Braves home opener on April 6th drew 42,000 fans, largest home opener crowd in Truist Park history

“We are progressing well on the split-off of the Atlanta Braves and the creation of the Liberty Live Group tracking stock,” said Greg Maffei, Liberty Media President and CEO. “SiriusXM navigated a difficult auto and ad market backdrop in the first quarter, but we are confident in their improving trajectory for the remainder of the year evidenced by management increasing 2023 adjusted EBITDA and free cash flow guidance. The Formula 1 season is underway and fans are tuning in across platforms. Arrangements for the Las Vegas Grand Prix are ramping up, with the Paddock Building construction and track preparations progressing on-time and in-line with our capex expectations. The Atlanta Braves are seeing strong trends in ticket sales and concessions early in the season.”

Discussion of Results

Unless otherwise noted, the following discussion compares financial information for the three months ended March 31, 2023 to the same period in 2022.

LIBERTY SIRIUSXM GROUP – The following table provides the financial results attributed to Liberty SiriusXM Group for the first quarter of 2023. In the first quarter, approximately $14 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Liberty SiriusXM Group.

 

1Q22

 

1Q23

 

% Change

 

amounts in millions

 

 

Liberty SiriusXM Group

 

 

 

 

 

Revenue

 

 

 

 

 

SiriusXM

$

2,186

 

$

2,144

 

(2

)%

Total Liberty SiriusXM Group

$

2,186

 

$

2,144

 

(2

)%

Operating Income (Loss)

 

 

 

 

 

SiriusXM

 

493

 

 

387

 

(22

)%

Corporate and other

 

(9

)

 

(14

)

(56

)%

Total Liberty SiriusXM Group

$

484

 

$

373

 

(23

)%

Adjusted OIBDA (Loss)

 

 

 

 

 

SiriusXM

 

690

 

 

625

 

(9

)%

Corporate and other

 

(5

)

 

(11

)

(120

)%

Total Liberty SiriusXM Group

$

685

 

$

614

 

(10

)%

 

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 first quarter results on April 27, 2023. For additional detail on SiriusXM’s financial results for the first 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 interests in SiriusXM, which includes its subsidiary Pandora, and an investment in Live Nation.

FORMULA ONE GROUP – The following table provides the financial results attributed to the Formula One Group for the first quarter of 2023. In the first quarter, the Formula One Group incurred approximately $16 million of corporate level selling, general and administrative expense (including stock-based compensation expense).

“The F1 season is off to a fantastic start, with thrilling races to-date and many more to come on our record 23-race 2023 calendar. The race weekends are drawing huge crowds, with the Australian Grand Prix hosting 445,000 fans and sellouts for the majority of the remaining calendar,” said Stefano Domenicali, Formula 1 President and CEO. “The power of our platform continues to draw interest also from commercial partners, with a number of new and expanded sponsors already announced season-to-date.”

 

 

1Q22

 

1Q23

 

 

amounts in millions

Formula One Group

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Formula 1

 

$

360

 

 

$

381

 

Total Formula One Group

 

$

360

 

 

$

381

 

Operating Income (Loss)

 

 

 

 

 

 

Formula 1

 

$

34

 

 

$

35

 

Corporate and other

 

 

(15

)

 

 

(19

)

Total Formula One Group

 

$

19

 

 

$

16

 

Adjusted OIBDA (Loss)

 

 

 

 

 

 

Formula 1

 

$

122

 

 

$

117

 

Corporate and other

 

 

(10

)

 

 

(12

)

Total Formula One Group

 

$

112

 

 

$

105

 

 

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

F1 Operating Results

 

 

1Q22

 

1Q23

 

% Change

 

amounts in millions

 

 

Primary Formula 1 revenue

$

287

 

$

314

 

9

%

Other Formula 1 revenue

 

73

 

 

67

 

(8

)%

Total Formula 1 revenue

$

360

 

$

381

 

6

%

Operating expenses (excluding stock-based compensation):

 

 

 

 

 

Team payments

 

(100

)

 

(112

)

(12

)%

Other cost of Formula 1 revenue

 

(95

)

 

(94

)

1

%

Cost of Formula 1 revenue

$

(195

)

$

(206

)

(6

)%

Selling, general and administrative expenses

 

(43

)

 

(58

)

(35

)%

Adjusted OIBDA

$

122

 

$

117

 

(4

)%

Depreciation and Amortization(a)

 

(88

)

 

(82

)

7

%

Operating income (loss)

$

34

 

$

35

 

3

%

 

 

 

 

 

 

Number of races in period

 

2

 

 

2

 

 

____________________

a)

Includes $81 million and $74 million of amortization related to purchase accounting as of March 31, 2022 and March 31, 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 two races held in the first quarter of both 2022 and 2023. There are 23 events scheduled for the 2023 race calendar.

Primary F1 revenue increased in the first quarter with growth across media rights, race promotion and sponsorship. Media rights revenue increased due to continued growth in F1 TV subscription revenue and increased fees under new and renewed contractual agreements. Race promotion revenue grew due to contractual increases in fees, and sponsorship revenue increased due to the recognition of revenue from new sponsors and growth in revenue from existing sponsors. Other F1 revenue decreased in the first quarter primarily due to lower freight income driven by the easing of freight cost inflation on billing rates, partially offset by increased hospitality revenue from higher Paddock Club attendance.

Operating income was relatively flat and adjusted OIBDA(2) decreased in the first quarter. Team payments were higher compared to the prior year due to the pro rata recognition of increased payments across the race season. 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 were relatively flat, as significantly lower freight costs were largely offset by increased Paddock Club costs associated with servicing higher hospitality attendance at the two events held in the first quarter, and higher commissions and partner servicing costs associated with increased Primary F1 revenue streams, including F1 TV subscriptions. Selling, general and administrative expense increased in the first quarter due to higher personnel, IT and marketing costs. There were approximately $6 million of costs associated with the planning of the Las Vegas Grand Prix included in selling, general and administrative expense in the first quarter of 2023.

The Liberty SiriusXM Group has an approximate 0.4% intergroup interest (1.1 million notional shares) in the Formula One Group attributed to it as of April 30, 2023. These shares are not included in the outstanding share count of Formula One Group in Liberty Media’s most recent Form 10-Q. Assuming the issuance of the shares underlying this intergroup interest, the Formula One Group outstanding share count as of April 30, 2023 would have been 235 million.

The businesses and assets attributed to the Formula One Group consist of Liberty Media’s subsidiary F1, other minority investments and an intergroup interest in the Braves Group.

BRAVES GROUP - The following table provides the financial results attributed to the Braves Group for the first quarter of 2023. In the first quarter, approximately $6 million of corporate level selling, general and administrative expense (including stock-based compensation expense) was allocated to the Braves Group.

 

 

1Q22

 

1Q23

 

 

amounts in millions

Braves Group

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Corporate and other

 

$

23

 

 

$

31

 

Operating Income (Loss)

 

 

 

 

 

 

Corporate and other

 

$

(40

)

 

$

(49

)

Adjusted OIBDA (Loss)

 

 

 

 

 

 

Corporate and other

 

$

(19

)

 

$

(31

)

 

The following table provides the operating results of Braves Holdings, LLC (“Braves”).

 

1Q22

 

1Q23

 

% Change

 

amounts in millions

 

 

Baseball revenue

$

11

 

$

18

 

64

%

Mixed-use development revenue

 

12

 

 

13

 

8

%

Total revenue

 

23

 

 

31

 

35

%

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

 

 

 

 

 

Operating expenses

 

(23

)

 

(39

)

(70

)%

Selling, general and administrative expenses

 

(17

)

 

(18

)

(6

)%

Adjusted OIBDA

$

(17

)

$

(26

)

(53

)%

Stock-based compensation

 

(2

)

 

(2

)

%

Depreciation and Amortization

 

(18

)

 

(15

)

17

%

Operating income (loss)

$

(37

)

$

(43

)

(16

)%

 

 

 

 

 

 

Number of home games in period

 

 

 

 

 

 

Baseball revenue is derived from two primary sources: (i) ballpark event revenue (ticket sales, concessions, advertising sponsorships, suites and premium seat fees) and (ii) broadcasting revenue (including national and local broadcast rights). Mixed-use development revenue is derived from the Battery Atlanta mixed-use facilities and primarily includes rental income.

In December 2021, the Collective Bargaining Agreement (“CBA”), which requires MLB clubs to sign players using a uniform contract, expired and MLB commenced a lockout of the Major League players. As a result of the lockout, the start of the 2022 regular season was delayed and the number of spring training games played was reduced. The start of the 2023 season was not impacted by these factors and a full spring training schedule took place. No regular season home games were played in the first quarter of 2023 nor the prior year period.

Baseball revenue increased in the first quarter due to more spring training home games and additional special events held at the ballpark compared to the prior year period. Development revenue increased during the first quarter due to increases in rental income related to tenant recoveries.

Operating income and adjusted OIBDA decreased in the first quarter. Revenue growth was more than offset by increased operating costs due to higher player salaries, as player salary expense was not recognized in the prior year period due to the delayed start of the season, as well as higher levels of MLB shared expenses, baseball operations expenses and facility and game day expenses for spring training games. Selling, general and administrative expense increased modestly due to increased promotion and marketing initiatives and higher personnel costs.

The Formula One Group has an approximate 11.0% intergroup interest (6.8 million notional shares) and the Liberty SiriusXM Group has an approximate 2.9% intergroup interest (1.8 million notional shares) in the Braves Group attributed to them as of April 30, 2023. These shares are not included in the outstanding share count of the Braves Group in Liberty Media’s most recent Form 10-Q. Assuming the issuance of the shares underlying these intergroup interests, the Braves Group outstanding share count as of April 30, 2023 would have been 62 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 and certain assets and liabilities associated with the Braves’ ballpark and mixed-use development.

Share Repurchases

There were no repurchases of Liberty Media’s common stock (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) from February 1, 2023 through April 30, 2023. The total remaining repurchase authorization for Liberty Media as of May 1, 2023 is approximately $1.1 billion and can be applied to repurchases of common shares of any of the Liberty Media Corporation tracking stocks.

FOOTNOTES

1)

Liberty Media will discuss these headlines and other matters on Liberty Media's earnings conference call that will begin at 9:30 a.m. (E.T.) on May 5, 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 and available for sale securities 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 March 31, 2023.

Fair Value of Corporate Public Holdings

 

 

 

 

 

(amounts in millions)

12/31/2022

3/31/2023

Liberty SiriusXM Group

 

 

 

 

Live Nation Investment(a)

 

4,857

 

4,875

Total Liberty SiriusXM Group

$

4,857

 

$

4,875

 

Formula One Group

 

 

 

 

Other Monetizable Public Holdings(b)

 

80

 

 

172

 

Total Formula One Group

$

80

 

$

172

 

Braves Group

 

N/A

 

 

N/A

 

Total Liberty Media

$

4,937

 

$

5,047

 

____________________

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 $158 million and $157 million as of December 31, 2022 and March 31, 2023, respectively.

b)

Represents the carrying value of other public holdings that are accounted for at fair value. Includes approximately $126 million of exchange-traded funds as of March 31, 2023 that are expected to be contributed to Liberty Live Group upon the reclassification of the tracking stocks. Excludes intergroup interests.

 

Fair Value of Intergroup Assets and Liabilities

The intergroup interests represent quasi-equity interests which are not represented by outstanding shares of common stock; rather, the Formula One Group and Liberty SiriusXM Group have attributed interests in the Braves Group, which are generally stated in terms of a number of shares of Liberty Braves common stock, and the Liberty SiriusXM Group also has an attributed interest in the Formula One Group, which is generally stated in terms of a number of shares of Liberty Formula One common stock. Each reporting period, the notional shares representing the intergroup interests are marked to fair value. The changes in fair value are recorded in the unrealized gains (losses) on the intergroup interest line item in the unaudited attributed condensed consolidated statements of operations. In connection with the previously announced split-off of Atlanta Braves Holdings, Inc., the intergroup interests in the Braves Group attributed to Liberty SiriusXM Group and Formula One Group will be settled and extinguished in connection with the split-off.

The Braves Group will attribute shares of New BATRA and New BATRK to Liberty SiriusXM Group and Formula One Group, respectively, on a one-for-one basis equal to the number of notional shares representing the intergroup interest attributed to each immediately prior to the split-off. Following the split-off: (i) Liberty SiriusXM Group intends to deliver the shares of New BATRA to and exchange such New BATRA shares with one or more third party lenders for satisfaction of certain debt obligations of Liberty SiriusXM Group and (ii) the new BATRK shares attributed to Formula One Group will be distributed on a pro rata basis to Formula One Group common shareholders.

The intergroup interest in the Formula One Group attributed to Liberty SiriusXM Group will be settled and extinguished through the attribution of cash prior to the split-off.

 

Attributed

 

as of March 31, 2023

 

Liberty

 

 

 

 

 

 

Formula

 

SiriusXM

 

Braves

 

One

 

Group

 

Group

 

Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(amounts in millions)

Notional Shares

 

Value

 

Notional Shares

 

Value

 

Notional Shares

 

Value

Braves Group intergroup interests(a)

1.8

$

63

(8.6)

$

(291

)

6.8

$

228

 

Formula One Group intergroup interest(a)

1.1

$

71

 

 

 

 

(1.1)

$

(71

)

____________________

a)

During the three months ended March 31, 2023, Formula One Group paid $202 million to Liberty SiriusXM Group to settle and extinguish 3.1 million notional shares underlying the portion of the intergroup interest in the Formula One Group held by Liberty SiriusXM Group as a result of the repurchase of a portion of the 1.375% cash convertible notes due 2023.

 

Cash and Debt

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

(amounts in millions)

12/31/2022

3/31/2023

Cash and Cash Equivalents Attributable to:

 

 

 

 

Liberty SiriusXM Group(a)

$

362

 

$

430

 

Formula One Group(b)

 

1,733

 

 

1,584

 

Braves Group(c)

 

151

 

 

215

 

Total Consolidated Cash and Cash Equivalents (GAAP)

$

2,246

 

$

2,229

 

 

 

 

 

 

 

 

 

Debt:

 

 

 

 

SiriusXM senior notes(d)

$

8,750

 

$

8,750

 

Pandora convertible senior notes(e)

 

193

 

 

118

 

1.375% cash convertible notes due 2023(f)

 

790

 

 

199

 

3.75% convertible notes due 2028(f)

 

 

 

575

 

2.125% SiriusXM exchangeable senior debentures due 2048(f)

 

387

 

 

275

 

2.75% SiriusXM exchangeable senior debentures due 2049(f)

 

586

 

 

586

 

0.5% Live Nation exchangeable senior debentures due 2050(f)

 

920

 

 

920

 

SiriusXM margin loan

 

875

 

 

875

 

Live Nation margin loan

 

 

 

 

Other subsidiary debt(g)

 

580

 

 

710

 

Total Attributed Liberty SiriusXM Group Debt

$

13,081

 

$

13,008

 

Unamortized discount, fair market value adjustment and deferred loan costs

 

62

 

 

(108

)

Total Attributed Liberty SiriusXM Group Debt (GAAP)

$

13,143

 

$

12,900

 

 

 

 

 

 

1% cash convertible notes due 2023(f)

 

27

 

 

 

2.25% convertible notes due 2027(f)

 

475

 

 

475

 

Formula 1 term loan and revolving credit facility

 

2,425

 

 

2,420

 

Other corporate level debt

 

63

 

 

63

 

Total Attributed Formula One Group Debt

$

2,990

 

$

2,958

 

Fair market value adjustment

 

(43

)

 

 

Total Attributed Formula One Group Debt (GAAP)

$

2,947

 

$

2,958

 

Formula 1 leverage(h)

 

2.7x

 

2.2x

 

 

 

 

 

Atlanta Braves debt

 

546

 

 

542

 

Total Attributed Braves Group Debt

$

546

 

$

542

 

Deferred loan costs

 

(4

)

 

(4

)

Total Attributed Braves Group Debt (GAAP)

$

542

 

$

538

 

 

 

 

 

 

Total Liberty Media Corporation Debt (GAAP)

$

16,632

 

$

16,396

 

____________________

a)

Includes $57 million and $53 million of cash held at SiriusXM as of December 31, 2022 and March 31, 2023, respectively.

b)

Includes $752 million and $1,043 million of cash held at F1 as of December 31, 2022 and March 31, 2023, respectively.

c)

Excludes restricted cash held in reserves pursuant to the terms of various financial obligations of $22 million and $30 million as of December 31, 2022 and March 31, 2023, respectively.

d)

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

e)

During the three months ended March 31, 2023, certain investors exercised their right to require a Special Repurchase, as defined in the indenture governing the Pandora convertible senior notes, and Pandora repurchased $75 million principal amount of such notes with cash for an aggregate purchase price equal to 100% of the principal amount of the notes repurchased plus accrued and unpaid interest to the date of repurchase.

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, SiriusXM, F1 and the Braves are in compliance with their debt covenants as of March 31, 2023.

Total cash and cash equivalents attributed to Liberty SiriusXM Group increased $68 million in the first quarter as net debt repayment at Liberty SiriusXM Group (described below) and return of capital at SiriusXM were more than offset by cash received from the settlement of a portion of the Formula One Group intergroup interest held at Liberty SiriusXM Group (described below), cash from operations at SiriusXM and borrowings under the revolving credit facility at SiriusXM. Included in the cash and cash equivalents balance attributed to Liberty SiriusXM Group at March 31, 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 $77 million of dividends from SiriusXM during the quarter.

Total debt attributed to Liberty SiriusXM Group decreased $73 million during the quarter. During the first quarter, Liberty SiriusXM Group issued $575 million aggregate principal amount of 3.75% LSXMA convertible notes due 2028 and used net proceeds of the offering, together with cash on hand, to repurchase (i) $591 million aggregate principal amount of its 1.375% cash convertible notes due 2023 and (ii) $112 million aggregate adjusted principal amount of its 2.125% exchangeable debentures due 2048, for a total cost of $774 million. In addition to proceeds from the convertible notes, Liberty SiriusXM Group received (i) $39 million of net proceeds from the settlement of the bond hedge and warrants related to the portion of the 1.375% cash convertible notes repurchased and (ii) $202 million of cash from the Formula One Group in exchange for the cancellation of 3.1 million notional shares underlying a portion of the intergroup interest in the Formula One Group held by Liberty SiriusXM Group (equivalent to the FWONA common stock underlying the portion of the 1.375% cash convertible notes repurchased). In addition, subsequent to quarter end in April 2023, Liberty SiriusXM Group paid $275 million to settle the remaining amount outstanding of its 2.125% exchangeable debentures due 2048, which was funded with cash on hand.

Total cash and cash equivalents attributed to the Formula One Group decreased $149 million during the quarter as cash from operations at F1 was more than offset by $202 million paid to Liberty SiriusXM Group in exchange for the cancellation of 3.1 million FWONA shares underlying the intergroup interest (described above), $120 million of exchange-traded funds purchased that are expected to be attributed to the Liberty Live Group after the completion of the previously announced reclassification of tracking stocks and capital expenditures related to the Las Vegas Grand Prix. Total debt at Formula One Group decreased $32 million in the first quarter primarily due to the January 2023 settlement of the remaining 1% FWONK cash convertible notes.

Pursuant to F1’s credit facilities agreement, the margin on its existing Term Loan B will be permanently reduced from 3.25% to 3.00% after the first quarter as a result of F1’s leverage as defined in its credit facilities for covenant calculations falling below a certain threshold.

Total cash and cash equivalents attributed to the Braves Group increased $64 million during the quarter due to cash from operations. Total debt attributed to the Braves Group decreased $4 million during the first quarter primarily due to repayment under the ballpark senior secured note.

Important Notice: Liberty Media Corporation (Nasdaq: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) will discuss Liberty Media's earnings release on a conference call which will begin at 9:30 a.m. (E.T.) on May 5, 2023. The call can be accessed by dialing (877) 704-2829 or (215) 268-9864, passcode 13736371 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 Las Vegas Grand Prix, our proposed split-off and reclassification of tracking stocks, 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, the satisfaction of conditions to the proposed split-off and reclassification of tracking stocks, 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 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

March 31, 2023 (unaudited)

 

 

 

 

Attributed

 

 

 

 

 

 

Liberty

 

 

 

Formula

 

 

 

 

 

 

SiriusXM

 

Braves

 

One

 

Intergroup

 

Consolidated

 

 

Group

 

Group

 

Group

 

Eliminations

 

Liberty

 

 

amounts in millions

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

430

 

 

215

 

 

1,584

 

 

 

 

2,229

 

Trade and other receivables, net

 

 

587

 

 

23

 

 

91

 

 

 

 

701

 

Other current assets

 

 

366

 

 

62

 

 

278

 

 

 

 

706

 

Total current assets

 

 

1,383

 

 

300

 

 

1,953

 

 

 

 

3,636

 

Intergroup interests

 

 

134

 

 

 

 

228

 

 

(362

)

 

 

Investments in affiliates, accounted for using the equity method

 

 

862

 

 

94

 

 

37

 

 

 

 

993

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, at cost

 

 

2,926

 

 

1,021

 

 

616

 

 

 

 

4,563

 

Accumulated depreciation

 

 

(1,742

)

 

(292

)

 

(112

)

 

 

 

(2,146

)

 

 

 

1,184

 

 

729

 

 

504

 

 

 

 

2,417

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets not subject to amortization

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

15,209

 

 

176

 

 

3,956

 

 

 

 

19,341

 

FCC licenses

 

 

8,600

 

 

 

 

 

 

 

 

8,600

 

Other

 

 

1,242

 

 

124

 

 

 

 

 

 

1,366

 

 

 

 

25,051

 

 

300

 

 

3,956

 

 

 

 

29,307

 

Intangible assets subject to amortization, net

 

 

1,060

 

 

28

 

 

3,083

 

 

 

 

4,171

 

Other assets

 

 

529

 

 

67

 

 

1,217

 

 

(4

)

 

1,809

 

Total assets

 

$

30,203

 

 

1,518

 

 

10,978

 

 

(366

)

 

42,333

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

Intergroup payable (receivable)

 

$

35

 

 

(2

)

 

(33

)

 

 

 

 

Accounts payable and accrued liabilities

 

 

1,229

 

 

66

 

 

318

 

 

 

 

1,613

 

Current portion of debt

 

 

608

 

 

75

 

 

23

 

 

 

 

706

 

Deferred revenue

 

 

1,307

 

 

191

 

 

655

 

 

 

 

2,153

 

Other current liabilities

 

 

80

 

 

5

 

 

35

 

 

 

 

120

 

Total current liabilities

 

 

3,259

 

 

335

 

 

998

 

 

 

 

4,592

 

Long-term debt

 

 

12,292

 

 

463

 

 

2,935

 

 

 

 

15,690

 

Deferred income tax liabilities

 

 

2,046

 

 

46

 

 

 

 

(4

)

 

2,088

 

Redeemable intergroup interests

 

 

 

 

291

 

 

71

 

 

(362

)

 

 

Other liabilities

 

 

596

 

 

147

 

 

136

 

 

 

 

879

 

Total liabilities

 

 

18,193

 

 

1,282

 

 

4,140

 

 

(366

)

 

23,249

 

Equity / Attributed net assets

 

 

8,920

 

 

229

 

 

6,813

 

 

 

 

15,962

 

Noncontrolling interests in equity of subsidiaries

 

 

3,090

 

 

7

 

 

25

 

 

 

 

3,122

 

Total liabilities and equity

 

$

30,203

 

 

1,518

 

 

10,978

 

 

(366

)

 

42,333

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF OPERATIONS

Three months ended March 31, 2023 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

Liberty

 

 

 

Formula

 

 

 

 

SiriusXM

 

Braves

 

One

 

Consolidated

 

 

Group

 

Group

 

Group

 

Liberty

 

 

amounts in millions

Revenue:

 

 

 

 

 

 

 

 

 

Sirius XM Holdings revenue

 

$

2,144

 

 

 

 

 

 

2,144

 

Formula 1 revenue

 

 

 

 

 

 

381

 

 

381

 

Other revenue

 

 

 

 

31

 

 

 

 

31

 

Total revenue

 

 

2,144

 

 

31

 

 

381

 

 

2,556

 

Operating costs and expenses, including stock-based compensation:

 

 

 

 

 

 

 

 

 

Cost of Sirius XM Holdings services (exclusive of depreciation shown separately below):

 

 

 

 

 

 

 

 

 

Revenue share and royalties

 

 

700

 

 

 

 

 

 

700

 

Programming and content(1)

 

 

150

 

 

 

 

 

 

150

 

Customer service and billing(1)

 

 

122

 

 

 

 

 

 

122

 

Other(1)

 

 

52

 

 

 

 

 

 

52

 

Cost of Formula 1 revenue (exclusive of depreciation shown separately below)

 

 

 

 

 

 

206

 

 

206

 

Subscriber acquisition costs

 

 

90

 

 

 

 

 

 

90

 

Other operating expenses(1)

 

 

79

 

 

39

 

 

 

 

118

 

Selling, general and administrative(1)

 

 

385

 

 

26

 

 

75

 

 

486

 

Impairment, restructuring and acquisition costs, net of recoveries

 

 

32

 

 

 

 

 

 

32

 

Depreciation and amortization

 

 

161

 

 

15

 

 

84

 

 

260

 

 

 

 

1,771

 

 

80

 

 

365

 

 

2,216

 

Operating income (loss)

 

 

373

 

 

(49

)

 

16

 

 

340

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(136

)

 

(9

)

 

(51

)

 

(196

)

Share of earnings (losses) of affiliates, net

 

 

(7

)

 

(1

)

 

(2

)

 

(10

)

Realized and unrealized gains (losses) on financial instruments, net

 

 

2

 

 

(1

)

 

(47

)

 

(46

)

Unrealized gains (losses) on intergroup interests

 

 

54

 

 

(13

)

 

(41

)

 

 

Other, net

 

 

3

 

 

1

 

 

10

 

 

14

 

 

 

 

(84

)

 

(23

)

 

(131

)

 

(238

)

Earnings (loss) before income taxes

 

 

289

 

 

(72

)

 

(115

)

 

102

 

Income tax (expense) benefit

 

 

(69

)

 

13

 

 

6

 

 

(50

)

Net earnings (loss)

 

 

220

 

 

(59

)

 

(109

)

 

52

 

Less net earnings (loss) attributable to the noncontrolling interests

 

 

37

 

 

 

 

 

 

37

 

Net earnings (loss) attributable to Liberty stockholders

 

$

183

 

 

(59

)

 

(109

)

 

15

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

Programming and content

 

 

7

 

 

 

 

 

 

7

 

Customer service and billing

 

 

1

 

 

 

 

 

 

1

 

Other

 

 

1

 

 

 

 

 

 

1

 

Other operating expenses

 

 

11

 

 

 

 

 

 

11

 

Selling, general and administrative

 

 

28

 

 

3

 

 

5

 

 

36

 

Stock compensation expense

 

$

48

 

 

3

 

 

5

 

 

56

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF OPERATIONS

Three months ended March 31, 2022 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

Liberty

 

 

 

Formula

 

 

 

 

SiriusXM

 

Braves

 

One

 

Consolidated

 

 

Group

 

Group

 

Group

 

Liberty

 

 

amounts in millions

Revenue:

 

 

 

 

 

 

 

 

 

Sirius XM Holdings revenue

 

$

2,186

 

 

 

 

 

 

2,186

 

Formula 1 revenue

 

 

 

 

 

 

360

 

 

360

 

Other revenue

 

 

 

 

23

 

 

 

 

23

 

Total revenue

 

 

2,186

 

 

23

 

 

360

 

 

2,569

 

Operating costs and expenses, including stock-based compensation:

 

 

 

 

 

 

 

 

 

Cost of Sirius XM Holdings services (exclusive of depreciation shown separately below):

 

 

 

 

 

 

 

 

 

Revenue share and royalties

 

 

670

 

 

 

 

 

 

670

 

Programming and content(1)

 

 

140

 

 

 

 

 

 

140

 

Customer service and billing(1)

 

 

125

 

 

 

 

 

 

125

 

Other(1)

 

 

54

 

 

 

 

 

 

54

 

Cost of Formula 1 revenue (exclusive of depreciation shown separately below)

 

 

 

 

 

 

195

 

 

195

 

Subscriber acquisition costs

 

 

90

 

 

 

 

 

 

90

 

Other operating expenses(1)

 

 

67

 

 

23

 

 

 

 

90

 

Selling, general and administrative(1)

 

 

404

 

 

22

 

 

56

 

 

482

 

Depreciation and amortization

 

 

152

 

 

18

 

 

90

 

 

260

 

 

 

 

1,702

 

 

63

 

 

341

 

 

2,106

 

Operating income (loss)

 

 

484

 

 

(40

)

 

19

 

 

463

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(122

)

 

(6

)

 

(29

)

 

(157

)

Share of earnings (losses) of affiliates, net

 

 

(18

)

 

4

 

 

 

 

(14

)

Realized and unrealized gains (losses) on financial instruments, net

 

 

61

 

 

5

 

 

(7

)

 

59

 

Unrealized gains (losses) on intergroup interests

 

 

20

 

 

1

 

 

(21

)

 

 

Other, net

 

 

20

 

 

20

 

 

5

 

 

45

 

 

 

 

(39

)

 

24

 

 

(52

)

 

(67

)

Earnings (loss) before income taxes

 

 

445

 

 

(16

)

 

(33

)

 

396

 

Income tax (expense) benefit

 

 

(101

)

 

3

 

 

(2

)

 

(100

)

Net earnings (loss)

 

 

344

 

 

(13

)

 

(35

)

 

296

 

Less net earnings (loss) attributable to the noncontrolling interests

 

 

56

 

 

 

 

9

 

 

65

 

Less net earnings (loss) attributable to redeemable noncontrolling interest

 

 

 

 

 

 

(9

)

 

(9

)

Net earnings (loss) attributable to Liberty stockholders

 

$

288

 

 

(13

)

 

(35

)

 

240

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

Programming and content

 

 

8

 

 

 

 

 

 

8

 

Customer service and billing

 

 

1

 

 

 

 

 

 

1

 

Other

 

 

1

 

 

 

 

 

 

1

 

Other operating expenses

 

 

8

 

 

 

 

 

 

8

 

Selling, general and administrative

 

 

31

 

 

3

 

 

3

 

 

37

 

Stock compensation expense

 

$

49

 

 

3

 

 

3

 

 

55

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF CASH FLOWS INFORMATION

Three months ended March 31, 2023 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

Liberty

 

 

 

Formula

 

 

 

 

SiriusXM

 

Braves

 

One

 

Consolidated

 

 

Group

 

Group

 

Group

 

Liberty

 

 

amounts in millions

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

220

 

 

(59

)

 

(109

)

 

52

 

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

161

 

 

15

 

 

84

 

 

260

 

Stock-based compensation

 

 

48

 

 

3

 

 

5

 

 

56

 

Non-cash impairment and restructuring costs

 

 

8

 

 

 

 

 

 

8

 

Share of (earnings) loss of affiliates, net

 

 

7

 

 

1

 

 

2

 

 

10

 

Unrealized (gains) losses on intergroup interests, net

 

 

(54

)

 

13

 

 

41

 

 

 

Realized and unrealized (gains) losses on financial instruments, net

 

 

(2

)

 

1

 

 

47

 

 

46

 

Deferred income tax expense (benefit)

 

 

7

 

 

(8

)

 

(5

)

 

(6

)

Intergroup tax allocation

 

 

31

 

 

(5

)

 

(26

)

 

 

Other charges (credits), net

 

 

4

 

 

1

 

 

(3

)

 

2

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

Current and other assets

 

 

46

 

 

27

 

 

(8

)

 

65

 

Payables and other liabilities

 

 

(157

)

 

96

 

 

229

 

 

168

 

Net cash provided (used) by operating activities

 

 

319

 

 

85

 

 

257

 

 

661

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Investments in equity method affiliates and debt and equity securities

 

 

(39

)

 

 

 

(130

)

 

(169

)

Cash proceeds from dispositions

 

 

 

 

 

 

34

 

 

34

 

Capital expended for property and equipment, including internal-use software and website development

 

 

(205

)

 

(14

)

 

(62

)

 

(281

)

Other investing activities, net

 

 

2

 

 

 

 

(1

)

 

1

 

Net cash provided (used) by investing activities

 

 

(242

)

 

(14

)

 

(159

)

 

(415

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

1,479

 

 

 

 

 

 

1,479

 

Repayments of debt

 

 

(1,633

)

 

(4

)

 

(53

)

 

(1,690

)

Intergroup (repayments) borrowings

 

 

202

 

 

 

 

(202

)

 

 

Subsidiary shares repurchased by subsidiary

 

 

(62

)

 

 

 

 

 

(62

)

Cash dividends paid by subsidiary

 

 

(17

)

 

 

 

 

 

(17

)

Taxes paid in lieu of shares issued for stock-based compensation

 

 

(15

)

 

(1

)

 

(8

)

 

(24

)

Other financing activities, net

 

 

37

 

 

6

 

 

14

 

 

57

 

Net cash provided (used) by financing activities

 

 

(9

)

 

1

 

 

(249

)

 

(257

)

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

 

 

 

 

 

 

2

 

 

2

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

68

 

 

72

 

 

(149

)

 

(9

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

370

 

 

173

 

 

1,733

 

 

2,276

 

Cash, cash equivalents and restricted cash at end of period

 

$

438

 

 

245

 

 

1,584

 

 

2,267

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

430

 

 

215

 

 

1,584

 

 

2,229

 

Restricted cash included in other current assets

 

 

 

 

30

 

 

 

 

30

 

Restricted cash included in other assets

 

 

8

 

 

 

 

 

 

8

 

Total cash and cash equivalents and restricted cash at end of period

 

$

438

 

 

245

 

 

1,584

 

 

2,267

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF CASH FLOWS INFORMATION

Three months ended March 31, 2022 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed

 

 

 

 

Liberty

 

 

 

Formula

 

 

 

 

SiriusXM

 

Braves

 

One

 

Consolidated

 

 

Group

 

Group

 

Group

 

Liberty

 

 

amounts in millions

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

344

 

 

(13

)

 

(35

)

 

296

 

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

152

 

 

18

 

 

90

 

 

260

 

Stock-based compensation

 

 

49

 

 

3

 

 

3

 

 

55

 

Share of (earnings) loss of affiliates, net

 

 

18

 

 

(4

)

 

 

 

14

 

Unrealized (gains) losses on intergroup interests, net

 

 

(20

)

 

(1

)

 

21

 

 

 

Realized and unrealized (gains) losses on financial instruments, net

 

 

(61

)

 

(5

)

 

7

 

 

(59

)

Deferred income tax expense (benefit)

 

 

39

 

 

(10

)

 

26

 

 

55

 

Intergroup tax allocation

 

 

42

 

 

7

 

 

(49

)

 

 

Other charges (credits), net

 

 

(11

)

 

(20

)

 

(2

)

 

(33

)

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

Current and other assets

 

 

21

 

 

23

 

 

(158

)

 

(114

)

Payables and other liabilities

 

 

(238

)

 

83

 

 

232

 

 

77

 

Net cash provided (used) by operating activities

 

 

335

 

 

81

 

 

135

 

 

551

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Investments in equity affiliates and debt and equity securities

 

 

(1

)

 

(5

)

 

(3

)

 

(9

)

Cash proceeds from dispositions

 

 

50

 

 

47

 

 

 

 

97

 

Capital expended for property and equipment, including internal-use software and website development

 

 

(97

)

 

(4

)

 

(10

)

 

(111

)

Other investing activities, net

 

 

(42

)

 

 

 

76

 

 

34

 

Net cash provided (used) by investing activities

 

 

(90

)

 

38

 

 

63

 

 

11

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

1,740

 

 

15

 

 

 

 

1,755

 

Repayments of debt

 

 

(1,204

)

 

(37

)

 

(1

)

 

(1,242

)

Liberty stock repurchases

 

 

(202

)

 

 

 

(37

)

 

(239

)

Subsidiary shares repurchased by subsidiary

 

 

(206

)

 

 

 

 

 

(206

)

Cash dividends paid by subsidiary

 

 

(201

)

 

 

 

 

 

(201

)

Taxes paid in lieu of shares issued for stock-based compensation

 

 

(61

)

 

 

 

26

 

 

(35

)

Other financing activities, net

 

 

1

 

 

(4

)

 

7

 

 

4

 

Net cash provided (used) by financing activities

 

 

(133

)

 

(26

)

 

(5

)

 

(164

)

Effect of foreign exchange rates on cash, cash equivalents and restricted cash

 

 

 

 

 

 

(2

)

 

(2

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

112

 

 

93

 

 

191

 

 

396

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

606

 

 

244

 

 

2,074

 

 

2,924

 

Cash, cash equivalents and restricted cash at end of period

 

$

718

 

 

337

 

 

2,265

 

 

3,320

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

710

 

 

311

 

 

2,265

 

 

3,286

 

Restricted cash included in other current assets

 

 

 

 

12

 

 

 

 

12

 

Restricted cash included in other assets

 

 

8

 

 

14

 

 

 

 

22

 

Total cash and cash equivalents and restricted cash at end of period

 

$

718

 

 

337

 

 

2,265

 

 

3,320

 

 

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 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 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 March 31, 2022 and March 31, 2023, respectively.

QUARTERLY SUMMARY

 

 

 

 

 

 

 

(amounts in millions)

 

1Q22

 

1Q23

Liberty SiriusXM Group

 

 

 

 

 

 

Operating income

 

$

484

 

 

$

373

 

Depreciation and amortization

 

 

152

 

 

 

161

 

Stock compensation expense

 

 

49

 

 

 

48

 

Impairment, restructuring and acquisition costs, net of recoveries(a)

 

 

 

 

 

32

 

Adjusted OIBDA

 

$

685

 

 

$

614

 

 

 

 

 

 

 

 

Formula One Group

 

 

 

 

 

 

Operating income

 

$

19

 

 

$

16

 

Depreciation and amortization

 

 

90

 

 

 

84

 

Stock compensation expense

 

 

3

 

 

 

5

 

Adjusted OIBDA

 

$

112

 

 

$

105

 

 

 

 

 

 

 

 

Braves Group

 

 

 

 

 

 

Operating income

 

$

(40

)

 

$

(49

)

Depreciation and amortization

 

 

18

 

 

 

15

 

Stock compensation expense

 

 

3

 

 

 

3

 

Adjusted OIBDA

 

$

(19

)

 

$

(31

)

 

 

 

 

 

 

 

Liberty Media Corporation (Consolidated)

 

 

 

 

 

 

Operating income

 

$

463

 

 

$

340

 

Depreciation and amortization

 

 

260

 

 

 

260

 

Stock compensation expense

 

 

55

 

 

 

56

 

Impairment, restructuring and acquisition costs, net of recoveries(a)

 

 

 

 

 

32

 

Adjusted OIBDA

 

$

778

 

 

$

688

 

____________________

(a)

During the three months ended March 31, 2023, SiriusXM recorded $23 million associated with severance and other employee costs and $9 million primarily related to a vacated office space. 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 the legal settlements and reserves, impairment, restructuring and 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 its 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. 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

 

March 31,

 

2022

 

2023

($ in millions)

 

 

 

 

Net income:

$

309

 

$

233

 

Add back items excluded from Adjusted EBITDA:

 

 

 

 

Impairment, restructuring and acquisition costs(a)

 

 

 

32

 

Share-based payment expense

 

45

 

 

45

 

Depreciation and amortization

 

135

 

 

136

 

Interest expense

 

103

 

 

107

 

Other expense (income)

 

(2

)

 

(3

)

Income tax (benefit) expense

 

100

 

 

75

 

Adjusted EBITDA

$

690

 

$

625

 

____________________

(a)

During the three months ended March 31, 2023, SiriusXM recorded $23 million associated with severance and other employee costs and $9 million primarily related to a vacated office space. These charges have been excluded from adjusted OIBDA.

 

SCHEDULE 3

This press release also 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, 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

 

 

March 31,

 

 

2022

 

2023

($ in millions)

 

 

 

 

 

 

Cash flow information

 

 

 

 

 

 

Net cash provided by operating activities

 

$

355

 

 

$

350

 

Net cash used in investing activities

 

$

(142

)

 

$

(235

)

Net cash used in financing activities

 

$

(328

)

 

$

(119

)

Free cash flow

 

 

 

 

 

 

Net cash provided by operating activities

 

$

355

 

 

$

350

 

Additions to property and equipment

 

 

(97

)

 

 

(205

)

Purchases of other investments

 

 

 

 

 

(1

)

Free cash flow

 

$

258

 

 

$

144

 

 

Contacts

Shane Kleinstein, (720) 875-5432

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