10-QPeriod: Q3 FY2014

Liberty Media Corp Quarterly Report for Q3 Ended Sep 30, 2014

Filed November 5, 2014For Securities:FWONKFWONAFWONB

Summary

Liberty Media Corporation's (FWONK) Q3 2014 filing shows a consolidated revenue increase driven by its principal operating subsidiary, SIRIUS XM Holdings, Inc. SIRIUS XM experienced growth in subscriber revenue, largely due to an increase in the average number of subscribers and a modest rise in subscription rates, as well as growth in other revenue streams like advertising and equipment sales. Despite increased costs associated with subscriber services and customer service, SIRIUS XM's Adjusted OIBDA saw a slight increase year-over-year. Liberty Media's consolidated financial performance was also impacted by a significant gain recognized in Q1 2013 from the acquisition of a controlling interest in SIRIUS XM. For the current reporting period, however, this large gain did not repeat, leading to a year-over-year decrease in net earnings. The company's liquidity remains stable, supported by cash balances and operational cash flow from its subsidiaries, although access to SIRIUS XM's cash is limited due to its separate public company status and non-controlling interest. The company also highlights its ongoing share repurchase program and potential future investments.

Financial Highlights

48 data points
Beta

Revenue

$1.18B

Net Income

$33.00M

2.8% Net Margin

EPS (Diluted)

$0.10

Total Assets

$33.84B

Cash & Equivalents

$377.00M

Free Cash Flow

$195.00M

Financial Statements
Beta
Revenue$1.18B
SG&A Expenses$209.00M
Operating Expenses$935.00M
Operating Income$249.00M
Interest Expense$70.00M
Net Income$33.00M
EPS (Basic)$0.10
EPS (Diluted)$0.10
Shares Outstanding (Basic)341.00M
Shares Outstanding (Diluted)346.00M

Key Highlights

  • 1Consolidated revenue increased year-over-year, primarily driven by strong performance at SIRIUS XM.
  • 2SIRIUS XM reported growth in both subscriber and other revenue, with an increase in total subscribers to 26.7 million.
  • 3SIRIUS XM's Adjusted OIBDA saw a modest increase, reflecting operational efficiencies despite rising costs in subscriber services.
  • 4Consolidated interest expense significantly increased due to the inclusion of SIRIUS XM's debt and higher average debt balances.
  • 5The company experienced a substantial decrease in net earnings compared to the prior year's period, largely due to the absence of a one-time gain from the SIRIUS XM acquisition in 2013.
  • 6Liberty Media has a substantial amount available under its share repurchase program, with additional authorization following the Broadband Spin-off.
  • 7The company maintains a diversified investment portfolio, including significant stakes in Charter Communications and Live Nation Entertainment.

Frequently Asked Questions

The primary driver of Liberty Media's consolidated revenue is its principal operating subsidiary, SIRIUS XM Holdings, Inc., which provides a subscription-based satellite radio service. SIRIUS XM's subscriber revenue, generated from subscription fees, and other revenue, including advertising and equipment sales, contribute significantly to Liberty Media's top line.

The significant decrease in net earnings for the nine months ended September 30, 2014, compared to the same period in 2013, is primarily due to the absence of a substantial one-time gain of approximately $7.5 billion. This gain was recognized in the first quarter of 2013 resulting from the application of purchase accounting upon Liberty Media acquiring a controlling interest in SIRIUS XM.

Liberty Media manages financial risks, including interest rate and stock price fluctuations, through established policies and the use of financial instruments like interest rate swaps and equity collars. Its liquidity is supported by cash and cash equivalents, cash generated from operations, potential asset sales, and borrowing capacity. The company also maintains a share repurchase program to return value to shareholders.

Liberty Media holds a controlling interest in SIRIUS XM, consolidating its results as its principal reportable segment. As of September 30, 2014, Liberty Media owned more than 50% of SIRIUS XM's capital stock entitled to vote. However, due to SIRIUS XM being a separate publicly traded company with a significant non-controlling interest (approximately 43%), Liberty Media does not have immediate access to SIRIUS XM's cash generated from operations.