10-QPeriod: Q1 FY2013

Liberty Media Corp Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 9, 2013For Securities:FWONKFWONAFWONB

Summary

This 10-Q filing for Liberty Media Corp (FWONK) for the period ending March 31, 2013, details significant changes resulting from a spin-off and the acquisition of a controlling interest in SIRIUS XM Radio. The company was spun off from Starz on January 11, 2013, and subsequently treated as the "accounting successor." A pivotal event in the quarter was the acquisition of a controlling stake in SIRIUS XM on January 18, 2013, leading to its consolidation. This transaction significantly impacted revenue and earnings, largely due to the application of purchase accounting, which resulted in a substantial gain. Operationally, the report highlights the consolidated performance of its primary segments: SIRIUS XM and Atlanta National League Baseball Club (ANLBC). SIRIUS XM, now consolidated, contributed significantly to the increase in revenue and Adjusted OIBDA. The company also maintains investments in other entities, including Live Nation Entertainment. The filing also addresses market risks, contractual obligations, and ongoing legal proceedings, particularly those involving SIRIUS XM.

Financial Highlights

47 data points
Beta

Revenue

$789.00M

Net Income

$8.06B

1021.4% Net Margin

EPS (Diluted)

$22.20

Total Assets

$32.40B

Cash & Equivalents

$1.90B

Free Cash Flow

$313.00M

Financial Statements
Beta
Revenue$789.00M
SG&A Expenses$155.00M
Operating Expenses$638.00M
Operating Income$151.00M
Interest Expense$11.00M
Net Income$8.06B
EPS (Basic)$22.57
EPS (Diluted)$22.20
Shares Outstanding (Basic)119.00M
Shares Outstanding (Diluted)121.00M

Key Highlights

  • 1Acquisition of controlling interest in SIRIUS XM on January 18, 2013, leading to its consolidation and recognition of a significant gain due to purchase accounting.
  • 2Consolidated revenue increased substantially to $789 million from $35 million year-over-year, primarily driven by the inclusion of SIRIUS XM's operations.
  • 3Consolidated Adjusted OIBDA saw a significant increase to $271 million from a loss of $17 million, largely attributable to SIRIUS XM's performance.
  • 4Net earnings dramatically increased to $8,110 million from $151 million, heavily influenced by the gain from the SIRIUS XM acquisition and a tax benefit related to the transaction.
  • 5Liberty Media completed a substantial investment in Charter Communications for approximately $2.6 billion in May 2013, funded by cash and new loan arrangements.
  • 6The company held $1,900 million in cash and cash equivalents and $1,195 million in other liquidity sources as of March 31, 2013.
  • 7Disclosed significant contractual obligations totaling $4,824 million, with the majority due within 2-3 years.

Frequently Asked Questions

The primary driver was Liberty Media's acquisition of a controlling interest in SIRIUS XM on January 18, 2013. This transaction led to the consolidation of SIRIUS XM's results and the recognition of a large gain due to purchase accounting, significantly boosting reported revenue and net earnings.

Following the acquisition of a controlling interest on January 18, 2013, SIRIUS XM's financial results have been consolidated into Liberty Media's financial statements. Prior to this date, SIRIUS XM was accounted for as an equity method affiliate.

As of March 31, 2013, Liberty Media had $1,900 million in cash and cash equivalents and an additional $1,195 million in Fair Value Option securities, indicating a strong liquidity position. The company also has access to cash generated by operations and other potential sources.

Yes, there are ongoing legal proceedings, including shareholder litigation related to the SIRIUS XM acquisition, alleging breaches of fiduciary duties. Additionally, state attorneys general are investigating certain SIRIUS XM consumer practices, particularly concerning subscription cancellations and automatic renewals.