Form 8-K Liberty Media Corp For: Aug 05

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

 

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

 

 

Date of Report (date of earliest event reported): August 5, 2016

 

 

 

LIBERTY MEDIA CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

12300 Liberty Blvd.

Englewood, Colorado 80112

(Address of principal executive offices and zip code)

 

 

Registrant's telephone number, including area code: (720) 875-5400

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 2.02.  Results of Operations and Financial Condition

On August 5, 2016, Liberty Media Corporation (the “Company”) issued a press release (the “Earnings Release”) setting forth information, including financial information, which is intended to supplement the financial statements and related Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2016 filed with the Securities and Exchange Commission (the “SEC”) on August 5, 2016.

This Item 2.02 and the Earnings Release attached hereto as Exhibit 99.1, insofar as they disclose historical information regarding the Company's results of operations or financial condition for the period ended June 30, 2016, are being furnished to the SEC.

Item 9.01.  Financial Statements and Exhibits

 

(d)  Exhibits

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: August 10, 2016

 

 

 

 

 

LIBERTY MEDIA CORPORATION REPORTS

SECOND QUARTER 2016 FINANCIAL RESULTS

 

Englewood, Colorado, August 5, 2016 - Liberty Media Corporation ("Liberty Media" or “Liberty”) (NASDAQ: LSXMA, LSXMB, LSXMK, BATRA, BATRK, LMCA, LMCK) today reported second quarter 2016 results.  Highlights include (1):

 

“SiriusXM posted outstanding results for the quarter, reaching over 30.6 million subscribers.  The company set a quarterly revenue record and once again increased its guidance on July 26th,” said Greg Maffei, Liberty Media President and CEO.  “Live Nation also delivered a very strong quarter, and leading indicators across concerts and ticketing sales, sponsorship and advertising are pointing to another record year in 2016.  We’re very pleased with the progress of the Braves’ new ballpark and mixed-use facility, which continue to track on-time and on-budget.”

On April 15, 2016, Liberty Media completed the recapitalization (the “Recapitalization”) of its common stock into three new tracking stock groups: (i) the Liberty SiriusXM Group, (ii) the Liberty Braves Group and (iii) the Liberty Media Group.  For purposes of presentation herein, the assets and liabilities of Liberty Media (excluding cash and liquid investments as of March 31, 2016) have been allocated among the three tracking stocks as if the Recapitalization had occurred on January 1, 2015.  This is intended to supplement and enhance the information included in our prior period financial statements, but is not intended to provide a comprehensive view of what each tracking stock group's performance would have been had the Recapitalization actually occurred on such date.

 

Unless otherwise noted, the foregoing discussion compares financial information for the three months ended June 30, 2016 to the same period in 2015.

 

LIBERTY SIRIUSXM GROUP – Liberty SiriusXM Group's revenue increased 10% to $1.2 billion in the second quarter, operating income increased 77% to $343 million and adjusted OIBDA(2) increased 7% to $450 million.  The increases in revenue, operating income and adjusted OIBDA were primarily attributable to an increase in the daily weighted average number of subscribers and increases in certain of SiriusXM’s self-pay subscription rates.  The increase in operating income was also due to the $108 million SiriusXM legal settlement recorded in the second quarter of 2015 that was excluded from adjusted OIBDA for that period.  For the period following the Recapitalization, $7 million of selling, general and administrative expenses (including stock-based compensation expense) was allocated to the Liberty SiriusXM Group in connection with the Recapitalization.

 

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 26, 2016.  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 is best understood in the context of SiriusXM's historical financial presentation.  For a reconciliation of revenue, adjusted OIBDA (as defined by Liberty Media) and operating income for SiriusXM's stand-alone operating results as reported by SiriusXM to those results as reported by Liberty Media, see Liberty Media's Form 10-Q for the quarter ended June 30, 2016.

 

Highlights of SiriusXM's earnings release included the following:

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

 

LIBERTY BRAVES GROUP - Liberty Braves Group's revenue increased $28 million to $131 million in the second quarter, operating income increased $3 million to $(3) million and adjusted OIBDA(2) increased $7 million to $12 million.  The increases in revenue, operating income and adjusted OIBDA were primarily due to an increase in overall ticket sales and broadcast revenue as a result of having more home games in the second quarter of 2016, with 44 home games in 2016 versus 35 home games during the same period in 2015.  The increases in operating income and adjusted OIBDA were partially offset by an increase in operating expenses driven by the acceleration of approximately $23 million in player salary expense as a result of released and injured players during the second quarter.  For the period following the Recapitalization, $3 million of selling, general and administrative expenses (including stock-based compensation expense) was allocated to the Liberty Braves Group in connection with the Recapitalization.

 

During the second quarter, Liberty Braves Group completed a rights offering (the “Rights Offering”) with respect to shares of Series C Liberty Braves common stock.  The Rights Offering expired at 5:00 p.m. New York City time on June 16, 2016 and was fully subscribed, with 15,833,634 shares of Series C Liberty Braves common stock issued to exercising rightsholders for total proceeds of $203 million.  Approximately $150 million of the proceeds from the Rights Offering were used to repay the outstanding balance and accrued interest on an intergroup note (the “Intergroup Note”) from Liberty Media Group to partially fund the equity contribution on the Atlanta Braves’ mixed-use development project, and the Intergroup Note agreement was cancelled. The remaining proceeds were attributed to the Liberty Braves Group and will be used for future development costs.  Assuming the issuance of the shares underlying the intergroup interest held by Liberty Media Group, discussed below, the Liberty Braves Group outstanding share count as of July 31, 2016 would be 58.5 million.

 

The businesses and assets attributed to Liberty Braves Group consist primarily of Liberty Media’s subsidiary Braves Holdings, LLC (“Braves Holdings”), which indirectly owns the Atlanta Braves baseball team, and certain assets and liabilities associated with its ballpark and mixed-use development project.

 

LIBERTY MEDIA GROUP – In the second quarter, the Liberty Media Group incurred $9 million of selling, general and administrative expenses (including stock-based compensation expense).

 

The businesses and assets attributed to Liberty Media Group consist of all of Liberty Media’s businesses and assets other than those attributed to the Liberty SiriusXM Group and the Liberty Braves Group, including its interest in Live Nation, minority equity investments in Time Warner and Viacom and an intergroup interest in the Liberty Braves Group.  Liberty Media Group initially held a 20% intergroup interest in the Liberty Braves Group.  As a result of the Rights Offering, the number of notional shares underlying the intergroup interest was adjusted to 9.1 million, representing a 15.6% intergroup interest in the Liberty Braves Group.

 

Share Repurchases

Between the reclassification of the original Liberty Capital tracking stock on March 3, 2008 and July 23, 2014, Liberty Media repurchased shares of Series A common stock for aggregate cash consideration of $2.9 billion, representing 51% of shares outstanding(3).  For the period covering the creation of the Liberty Media Series C common stock on July 24, 2014 through January 31, 2016 (prior to the creation of the Liberty SiriusXM, Liberty Braves and Liberty Media tracking stocks), Liberty Media repurchased approximately 9.2 million shares of Series A and Series C common stock, collectively, at an average cost per share of $37.96 for total cash consideration of $350 million, representing 2.7% of shares outstanding(4).  There were no repurchases of Series A or Series C Liberty Media Corporation common stock from February 1, 2016 through the Recapitalization on April 15, 2016, and there were no repurchases of Series A or Series C Liberty SiriusXM common stock, Series A or Series C Liberty Braves common stock or Series A or Series C Liberty Media common stock from April 15, 2016 through July 31, 2016.  The total remaining repurchase authorization for Liberty Media stock is approximately $1.3 billion and can be applied to repurchases of Series A and Series C shares of any of the Liberty Media Corporation tracking stocks.  

 

FOOTNOTES

 

 

LIBERTY MEDIA FINANCIAL METRICS - QUARTER

 

 

 

 

 

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 June 30, 2016.

 

Fair Value of Corporate Public Holdings

 

 

 

Cash and Debt

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

 

 

 

Total cash and liquid investments attributed to Liberty SiriusXM Group increased $424 million during the quarter primarily as a result of cash from operations and net borrowings at SiriusXM, partially offset by stock repurchases at SiriusXM.  Cash and liquid investments attributed to Liberty SiriusXM Group as of March 31, 2016 reflects the cash and liquid investments at SiriusXM as of such dates and does not include $50 million of corporate cash attributed as part of the tracking stock Recapitalization. Included in the cash and liquid investments balance attributed to Liberty SiriusXM Group at June 30, 2016 is $476 million at SiriusXM.  Although SiriusXM is a consolidated subsidiary, it is a separate public company with a significant non-controlling interest, therefore Liberty Media does not have ready access to SiriusXM’s cash balance. 

 

Total debt attributed to Liberty SiriusXM increased by $398 million primarily as a result of additional borrowings in excess of repayments under SiriusXM’s revolving credit facility.

 

Total cash and liquid investments attributed to Liberty Braves Group increased $105 million during the quarter primarily as a result of proceeds received from the Rights Offering and additional borrowings, partially offset by repayment of the Intergroup Note to Liberty Media Group and capital expenditures related to the construction of the new ballpark and adjacent mixed-use development.  Cash and liquid investments attributed to Liberty Braves Group as of March 31, 2016 reflects the cash and liquid investments at Braves Holdings as of such date and does not include $50 million of corporate cash attributed as part of the tracking stock Recapitalization.  Included in the cash and liquid investments balance attributed to Liberty Braves Group at June 30, 2016 is $46 million at Braves Holdings.

 

As of June 30, 2016, approximately $420 million had been spent on the new ballpark, of which approximately $331 million of funding was provided by Cobb County and related entities and $89 million provided by the Braves.  As of June 30, 2016, approximately $179 million had been spent on the mixed-use development (including $7 million of cost towards future development phases, including purchased land cost, not reflected in currently forecasted equity contribution towards mixed-use development), of which approximately $14 million was provided by JV partners’ equity.

 

Total debt attributed to Liberty Braves Group increased by $30 million primarily as a result of additional borrowings, net of repayments, for team operations and funding the mixed-use development.  

 

Total cash and liquid investments attributed to Liberty Media Group increased $37 million during the quarter, primarily as a result of cash proceeds from the sale of investments and the repayment of Intergroup Note funds lent to Liberty Braves Group, partially offset by $50 million of corporate cash that was attributed to each of Liberty SiriusXM Group and Liberty Braves Group as part of the Recapitalization on April 15, 2016.  Cash and liquid investments attributed to Liberty Media Group as of March 31, 2016 reflects all cash and liquid investments of Liberty Media Corporation less cash and liquid investments at SiriusXM and Braves Holdings as of such dates, and is inclusive of $50 million of corporate cash that was attributed to each of Liberty SiriusXM Group and Liberty Braves Group as part of the tracking stock Recapitalization.  

 

Total debt attributed to Liberty Media Group was flat versus the prior quarter.

 

 

Important Notice: Liberty Media Corporation (Nasdaq: LSXMA, LSXMB, LSXMK, LMCA, LMCK, BATRA, BATRK) President and CEO, Greg Maffei, will discuss Liberty Media's earnings release in a conference call which will begin at 11:30 a.m. (E.D.T.) on August 5, 2016.  The call can be accessed by dialing (844) 838-8043 or (678) 509-7480 at least 10 minutes prior to the start time.  The call will also be broadcast live across the Internet and archived on our website.  To access the webcast go to http://www.libertymedia.com/events.  Links to this press release will also be available on the Liberty Media website.

 

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential, future financial prospects, growth of SiriusXM's subscriber base, the future financial performance of SiriusXM, the continuation of our stock repurchase plan, the repurchase activity of SiriusXM, the

construction of the new stadium for the Atlanta Braves and the associated mixed use development 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 competitive position of SiriusXM versus other radio and audio entertainment providers, the ability of SiriusXM to attract and retain subscribers, the dependence of SiriusXM upon the auto industry, general economic conditions, the failure of SiriusXM’s satellites, the interruption or failure of SiriusXM’s information and communication systems, the security of personal customer information, royalties SiriusXM pays for music rights (which increase over time), the unfavorable outcome of pending or future litigation, the failure to realize benefits of acquisitions, rapid technological and industry change, failure of third parties to perform, changes in consumer protection laws and their enforcement, continued access to capital on terms acceptable to Liberty Media and changes in law and market conditions conducive to stock repurchases.  These forward-looking statements speak only as of the date of this 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 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 presentation.

 

Contact: Courtnee Chun (720) 875-5420

LIBERTY MEDIA CORPORATION

BALANCE SHEET INFORMATION

June 30, 2016 (unaudited)

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF OPERATIONS
Three months ended June 30, 2016 (unaudited)

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF OPERATIONS
Three months ended June 30, 2015 (unaudited)

 

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF CASH FLOWS INFORMATION

Six months ended June 30, 2016 (unaudited)

 

 

 

LIBERTY MEDIA CORPORATION

STATEMENT OF CASH FLOWS INFORMATION

Six months ended June 30, 2015 (unaudited)