Liberty Media Corporation reports First Quarter 2020 Financial reports
Liberty Media Corporation (“Liberty Media” or “Liberty”) (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) today reported first quarter 2020 results. Headlines include(1):
Completed reattribution of Live Nation stake and other assets and liabilities between Formula One Group and Liberty SiriusXM Group tracking stocks on April 22nd
o Intend to launch $750 million subscription rights offering on May 18th to Liberty SiriusXM shareholders to pay off intergroup loan owed to Formula One Group
·A ttributed to Liberty SiriusXM Group
o SiriusXM reported first quarter 2020 financial results
§ SiriusXM responds to COVID-19 crisis; company withdrew 2020 guidance on 4/28
§ Self-pay net subscriber additions of 69,000 reported for first quarter
§ First quarter revenue of $2.0 billion; a pro forma increase of 5%
§ First quarter net income of $293 million; diluted EPS of $0.07
§ Adjusted EBITDA(2) reached $639 million in the first quarter, up 13%
o Liberty Media’s ownership of SiriusXM stood at 72.2% as of April 24th
o From February 1st through April 30th, Liberty SiriusXM Group repurchased 863 thousand LSXMA/K shares for total cash consideration of $41 million
o Corporate level liquidity as of March 31st pro forma for reattribution
§ $1.0 billion cash, cash equivalents and undrawn margin loan capacity (excluding liquidity at SiriusXM)
· Attributed to Formula One Group
o Expect F1 racing to begin in July with targeted 15 to 18 races this season
o Liquidity as of March 31st pro forma for reattribution
1 $2.5 billion cash, cash equivalents and revolver capacity (including $1.0 billion liquidity at F1)
· Attributed to Braves Group
o MLB evaluating multiple options for 2020 season commencement
Liquidity as of March 31st
$348 million cash, restricted cash, cash equivalents and revolver capacity (including $268 million liquidity at Braves)
“We are operating in unprecedented times, impacting the Liberty portfolio across the globe. Our companies in the live event space have been working with players, teams, bands, fans and government authorities to operate during social distancing and safely provide unique and engaging experiences. We thank our employees and partners for their dedication, flexibility and leadership,” said Greg Maffei, Liberty Media President & CEO.
“We were pleased to complete the reattribution between Formula One Group and Liberty SiriusXM Group in April. Liberty SiriusXM now includes Live Nation, a complementary business and an established leader in the entertainment space.
SiriusXM posted solid first quarter results and the business is proving resilient. Formula One Group has a strengthened balance sheet which will enable us to enhance the F1 business and be opportunistic.”
Note on COVID-19
Liberty Media is monitoring and continues to assess the effects of the COVID-19 pandemic on its operations, wholly-owned businesses and various investments. The global spread of COVID-19 has prompted most local, state and federal government agencies, both domestically and internationally, to impose travel restrictions and local quarantines or stay at home restrictions to contain the spread.
As a result, the business operations of Formula 1, the Atlanta Braves and Live Nation have been largely, if not completely, suspended. Although it is expected that these restrictions will eventually be loosened or fully lifted, the timing is uncertain and could change given the evolving circumstances. Liberty Media and our portfolio companies will continue to comply with the recommendations of various government agencies and focus on the safety of our employees, partners and customers.
Liberty Media, SiriusXM, Formula 1 and Braves Holdings are in compliance with all debt covenants as of March 31, 2020. Given the uncertain impacts of COVID-19, Formula 1 and Braves Holdings are monitoring their ability to comply with debt covenants in future periods and are in discussions with their respective lenders.
On April 22, 2020, Liberty Media completed the reattribution of certain assets and liabilities between the Liberty SiriusXM Group and the Formula One Group. Detailed information can be found in the press release and slide presentation issued April 23, 2020. In summary, $1.5 billion of net asset value was reattributed from Formula One Group to Liberty SiriusXM Group, primarily including (i) Liberty’s interest in Live Nation, as well as associated Live Nation debt instruments and (ii) the 1.375% cash convertible note due 2023 (including a call spread), as well as intergroup interests in Formula One Group and Braves Group to offset the corresponding equity exposures underlying the notes.
Similarly, $1.5 billion of net asset value was reattributed from Liberty SiriusXM Group to Formula One Group, comprised of (i) a Live Nation call spread and (ii) net cash payment of $1.4 billion, of which $750 million was funded with an intergroup loan. Liberty intends to launch a subscription rights offering for shares of LSXMK to pay off the intergroup loan, which is expected to commence May 18, 2020 and expire June 2, 2020, subject to extension. The rights will be offered to all holders of record of Liberty SiriusXM Group tracking stock as of May 13, 2020. The rights offering will be made pursuant to a registration statement and prospectus related to the rights offering to be filed by Liberty Media with the Securities and Exchange Commission.
The reattribution is not reflected in Liberty Media’s first quarter financial results but will be reflected in the second quarter results on a prospective basis.
Discussion of Results
Unless otherwise noted, the following discussion compares financial information for the three months ended March 31, 2020 to the same period in 2019.
full report here
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