10-KPeriod: FY2018

Liberty Media Corp Annual Report, Year Ended Dec 31, 2018

Filed February 28, 2019For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation's (FWONK) 2018 10-K filing reveals a diversified business structure primarily driven by its subsidiaries Sirius XM Holdings Inc. and Formula 1, alongside its ownership in Braves Holdings and Live Nation Entertainment. The company operates under a tracking stock structure, with distinct Liberty SiriusXM, Liberty Braves, and Liberty Formula One tracking stocks intended to reflect the economic performance of their respective underlying assets. Financially, the company saw revenue growth in 2018 driven by Sirius XM and Formula 1. Sirius XM reported subscriber growth and increased revenue, while Formula 1 experienced growth from its race promotion, broadcasting, and advertising/sponsorship segments. The Braves Group, encompassing the Atlanta Braves baseball team and related development projects, also contributed positively. The company's liquidity remains strong, supported by cash flows from operations and available borrowing capacity, though it carries significant corporate-level debt. Key risks highlighted in the filing include intense competition across all segments, potential impacts of economic downturns on consumer discretionary spending, and operational risks associated with each business. The tracking stock structure itself presents unique complexities for investors, including potential conflicts of interest and the inability to directly claim assets attributed to specific groups.

Financial Highlights

42 data points
Beta

Revenue

$8.04B

Net Income

$531.00M

6.6% Net Margin

Total Assets

$40.83B

Cash & Equivalents

$358.00M

Free Cash Flow

$2.16B

Financial Statements
Beta
Revenue$8.04B
SG&A Expenses$1.18B
Operating Expenses$6.53B
Operating Income$1.51B
Interest Expense$606.00M
Net Income$531.00M

Key Highlights

  • 1Liberty Media operates through three tracking stock groups: Liberty SiriusXM, Liberty Braves, and Liberty Formula One, reflecting the performance of its core assets.
  • 2Sirius XM remains a primary revenue driver, showing subscriber growth and increased revenue in 2018, driven by its satellite and streaming services, with a recent acquisition of Pandora Media.
  • 3Formula 1, a significant consolidated subsidiary, experienced revenue growth in 2018 across its race promotion, broadcasting, and sponsorship segments.
  • 4Braves Holdings, including the Atlanta Braves baseball team and its development projects, also contributed to revenue growth.
  • 5The company maintains a significant level of corporate-level debt, with total debt outstanding at $13.4 billion as of December 31, 2018.
  • 6Liberty Media's liquidity is supported by operating cash flows and available borrowing capacity, with management believing it is sufficient to cover projected uses of cash.
  • 7Key risks include intense competition, the cyclical nature of the auto industry affecting Sirius XM's subscriber growth, and the dependence on consumer discretionary spending across all segments.
  • 8The filing details various legal proceedings, including a class-action lawsuit against Sirius XM related to the Telephone Consumer Protection Act (TCPA).

Frequently Asked Questions

Liberty Media Corporation owns interests in subsidiaries and other companies engaged in global media and entertainment. Its principal businesses and assets include its consolidated subsidiaries Sirius XM, Formula 1, and Braves Holdings, LLC, as well as an equity affiliate, Live Nation Entertainment.

Liberty Media utilizes a tracking stock structure with three groups: Liberty SiriusXM, Liberty Braves, and Liberty Formula One. Each tracking stock is intended to reflect the separate economic performance of the businesses, assets, and liabilities attributed to that specific group, rather than the company as a whole. However, holders of tracking stocks are stockholders of the parent corporation and do not have direct claims to the specific assets or stock of the attributed companies.

Sirius XM reported increased revenue in 2018, driven by subscriber growth and higher average revenue per user. The company had approximately 34 million subscribers as of December 31, 2018. Sirius XM also recently completed the acquisition of Pandora Media, Inc. in February 2019.

Key risks include intense competition across its business segments (Sirius XM, Formula 1, Braves), the impact of general economic conditions on consumer spending, reliance on the automotive industry for Sirius XM subscriber growth, and operational risks associated with Formula 1's global events and Braves Holdings' sports and entertainment operations. The tracking stock structure also introduces risks related to potential conflicts of interest and the inability of investors to directly claim specific group assets.