10-KPeriod: FY2016

Liberty Media Corp Annual Report, Year Ended Dec 31, 2016

Filed February 28, 2017For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation (FWONK) reported its annual results for the year ending December 31, 2016. The company's primary operating segment, Liberty SiriusXM, experienced revenue growth driven by an increase in subscribers and average revenue per subscriber. The Braves Group faced operational challenges and a decline in revenue, partly due to the transition to a new stadium and development project. The Formula One Group saw significant improvement in its operating results, largely due to a favorable settlement of a lawsuit. The company also announced the completion of its acquisition of Formula 1 in early 2017, which will be attributed to the Formula One Group. Liberty Media's overall financial performance in 2016 was strong, with consolidated revenue increasing and operating income significantly improving, primarily due to the performance of SIRIUS XM and the settlement of the Vivendi lawsuit. The company continued its focus on strategic acquisitions and capital allocation, including share repurchases and investments in its businesses. The company's liquidity position remained solid, with sufficient resources to meet its projected future cash needs.

Financial Highlights

41 data points
Beta

Revenue

$5.28B

Net Income

$680.00M

12.9% Net Margin

Total Assets

$31.38B

Cash & Equivalents

$562.00M

Free Cash Flow

$2.17B

Financial Statements
Beta
Revenue$5.28B
SG&A Expenses$886.00M
Operating Expenses$3.54B
Operating Income$1.73B
Interest Expense$362.00M
Net Income$680.00M

Key Highlights

  • 1Consolidated revenue increased by $481 million to $5.28 billion in 2016, driven primarily by Liberty SiriusXM Group's revenue growth.
  • 2Operating income improved significantly to $1.73 billion in 2016 from an operating loss of $80 million in 2015, aided by SIRIUS XM's strong performance and a $775 million legal settlement.
  • 3Liberty SiriusXM Group's revenue grew by $462 million to $5.01 billion, attributed to subscriber growth and rate increases.
  • 4Braves Holdings experienced a revenue increase of $19 million, with improved retail and concession sales, partially offset by lower game attendance.
  • 5The acquisition of Formula 1 was completed in January 2017, with Liberty acquiring 100% of the fully diluted equity interests, adding a significant new asset to the Formula One Group.
  • 6The company's liquidity remained robust, with sufficient cash and cash equivalents and borrowing capacity to fund operations and strategic initiatives.
  • 7Liberty completed a recapitalization in April 2016, creating three distinct tracking stock groups: Liberty SiriusXM, Liberty Braves, and Liberty Media (later renamed Liberty Formula One).

Frequently Asked Questions

Liberty Media's primary focus is on its media and entertainment assets, with its most significant operating segment being SIRIUS XM, a subscription-based satellite radio service. It also holds interests in Braves Holdings (owner of the Atlanta Braves baseball team) and Live Nation Entertainment, and recently acquired Formula 1.

Liberty Media completed a recapitalization in April 2016, restructuring its common stock into three new tracking stock groups: Liberty SiriusXM common stock, Liberty Braves common stock, and Liberty Media common stock (which was later renamed Liberty Formula One common stock). This structure is intended to track the economic performance of the respective underlying businesses.

SIRIUS XM performed strongly in 2016, with revenue increasing by 10% to $5.02 billion. This growth was driven by an increase in subscribers and higher average monthly revenue per subscriber due to rate increases. Operating income for SIRIUS XM also saw substantial growth.

Liberty Media acquired 100% of Delta Topco, the parent company of Formula 1, in January 2017. This acquisition represents a significant addition to Liberty's portfolio, with its performance attributed to the Formula One Group. The company anticipates realizing benefits by leveraging its expertise in live events and digital monetization with the Formula 1 business.

Liberty Media maintained a solid liquidity position in 2016, with substantial cash and cash equivalents and available borrowing capacity. The company's debt levels increased due to funding the Formula 1 acquisition and capital expenditures for the Braves' new stadium. Overall, management believed its liquidity sources were sufficient to meet future cash needs.