10-QPeriod: Q1 FY2014

Liberty Media Corp Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 8, 2014For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation (FWONK) reported its first quarter 2014 results, highlighting continued strong performance from its principal operating subsidiary, SIRIUS XM Holdings, Inc. Consolidated revenue saw a significant increase of $222 million, largely driven by SIRIUS XM's revenue growth and the full consolidation of its results. Adjusted OIBDA also rose by $32 million, again primarily attributed to SIRIUS XM's operational efficiencies. While the company's consolidated operating income saw a modest increase, the overall financial picture for the quarter was significantly impacted by a large one-time gain recorded in the prior year's first quarter related to the SIRIUS XM acquisition. Key financial movements in the current quarter include an increase in interest expense, driven by the consolidation of SIRIUS XM's debt, and a substantial decrease in 'Other Income (Expense)' due to the absence of the prior year's $7.5 billion gain on the SIRIUS XM transaction. Liberty Media's liquidity remains solid, supported by cash and cash equivalents, though direct access to SIRIUS XM's cash is limited. The company also repurchased $670 million of margin loans and announced a $450 million share repurchase program, with $327 million remaining available as of quarter-end.

Financial Highlights

47 data points
Beta

Revenue

$1.01B

Net Income

$22.00M

2.2% Net Margin

EPS (Diluted)

$0.06

Total Assets

$33.69B

Cash & Equivalents

$377.00M

Free Cash Flow

$228.00M

Financial Statements
Beta
Revenue$1.01B
SG&A Expenses$216.00M
Operating Expenses$856.00M
Operating Income$155.00M
Interest Expense$53.00M
Net Income$22.00M
EPS (Basic)$0.06
EPS (Diluted)$0.06
Shares Outstanding (Basic)340.00M
Shares Outstanding (Diluted)345.00M

Key Highlights

  • 1Consolidated revenue increased by $222 million to $1,011 million for the three months ended March 31, 2014, driven primarily by SIRIUS XM's performance.
  • 2Adjusted OIBDA grew by $32 million to $294 million for the same period, also largely attributable to SIRIUS XM's operational efficiencies.
  • 3SIRIUS XM, the principal operating segment, generated $988 million in revenue and $335 million in Adjusted OIBDA.
  • 4Net earnings significantly decreased from $8,104 million in Q1 2013 to $72 million in Q1 2014, largely due to a substantial one-time gain from the SIRIUS XM acquisition recorded in the prior year.
  • 5Interest expense increased by $42 million, primarily due to the consolidation of SIRIUS XM's debt and an overall increase in average debt.
  • 6Liberty Media has a $450 million share repurchase program authorized and had $327 million available for repurchases as of March 31, 2014.
  • 7Stock-based compensation expense increased to $49 million from $41 million, reflecting additional compensation from SIRIUS XM.

Frequently Asked Questions

The significant decrease in net earnings from $8,104 million in Q1 2013 to $72 million in Q1 2014 was primarily due to the recognition of a large, one-time gain of approximately $7.5 billion in the prior year's first quarter. This gain resulted from the application of purchase accounting when Liberty Media acquired a controlling interest in SIRIUS XM.

SIRIUS XM is Liberty Media's principal operating segment and is now fully consolidated. For the first quarter of 2014, SIRIUS XM generated $988 million in revenue and $335 million in Adjusted OIBDA. Its performance was the primary driver of Liberty Media's consolidated revenue growth of $222 million and Adjusted OIBDA growth of $32 million for the period.

As of March 31, 2014, Liberty Media had $256 million in Cash and Cash Equivalents within its Corporate and Other segment. While SIRIUS XM generates significant cash from operations, Liberty Media does not have immediate access to SIRIUS XM's cash due to SIRIUS XM being a separate public company with a significant noncontrolling interest.

Liberty Media and SIRIUS XM were involved in a series of stockholder class action lawsuits related to Liberty's former proposal to acquire the remaining shares of SIRIUS XM. However, these lawsuits became moot and were voluntarily discontinued by the plaintiffs after Liberty Media withdrew its proposal in March 2014.