OREANDA-NEWS. Liberty Media Corporation ("Liberty Media") (NASDAQ: LMCA, LMCB, LMCK) today reported fourth quarter and year end 2015 results. Highlights include (1):

  • SiriusXM reported strong fourth quarter and full-year 2015 results
  • Net subscriber growth in 2015 of 2.3 million, up to 29.6 million
  • 2015 revenue up 9% to a record $4.6 billion
  • Net income of $510 million
  • 2015 adjusted EBITDA(2) climbed 13% to record $1.66 billion
  • Free cash flow(2) per fully-diluted share increased 23% in 2015 to 24 cents
  • Yesterday Liberty Media settled litigation with Vivendi Universal for $775 million
  • Liberty Media's ownership of SiriusXM stood at 62.1% as of January 29th
  • S-4 related to the recapitalization into three tracking stock groups declared effective by SEC on February 19th; stockholder meeting scheduled for April 11th
  • From November 1st through January 31st, repurchased 298 thousand LMCK shares at an average price per share of $39.34 and a total cost of $11.7 million

"SiriusXM had another outstanding quarter and year, reaching record revenue and adjusted EBITDA, ending the year with 29.6 million subscribers. SiriusXM continues to focus on its world-class exclusive content and announced a long-term agreement with Howard Stern that includes Stern's extensive audio and video library, in addition to channels with David Bowie, Billy Joel, Hank Haney and Nigel Barker," stated Greg Maffei, President and CEO of Liberty Media. "At Liberty, we are very pleased to announce a settlement of litigation with Vivendi which resulted in a payment of $775 million, of which we will net after-tax proceeds of approximately $420 million. We continue to make progress on our plan to recapitalize into three tracking stock groups and expect to hold a shareholder vote in April."

Liberty Media announced today that it has entered into a settlement of its lawsuit against Vivendi Universal S.A., pursuant to which Vivendi S.A. has paid Liberty Media$775 million in settlement of all claims related to a dispute that arose from a 2001 transaction. Liberty Media had prevailed in the United States District Court for the Southern District of New York with a jury verdict of approximately €765 million (excluding pre-judgment interest). Both sides had appealed the earlier judgment. As a result of the settlement all appeals have been dismissed and the parties have provided each other with mutual releases.

Following the payment of a contingency fee to its legal counsel, as well as amounts payable to Liberty Global plc, a former subsidiary which was a plaintiff in the action, Liberty Media expects to net after-tax proceeds of approximately $420 million in cash.

Liberty Media was represented at trial by Baker Botts LLP and on appeal by WilmerHale.

Liberty Media

Liberty Media's revenue increased $113 million to $1.2 billion in the fourth quarter and $345 million to $4.8 billion for the year. Adjusted OIBDA(2) increased $5 million to $364 million for the fourth quarter and $211 million to $1.6 billion for the year. Operating income increased $11 million to $217 million for the fourth quarter and $113 million to $954 million for the year. The increase in revenue, adjusted OIBDA and operating income was primarily due to the operating results of SiriusXM.

During November 2015, Liberty Media's board of directors authorized management to pursue a reclassification of the company's common stock into three new tracking stock groups, one to be designated as the Liberty Braves Group, one to be designated as the Liberty Media Group and one to be designated as the Liberty SiriusXM Group, and a distribution of subscription rights related to the Liberty Braves Group tracking stock following the creation of the new tracking stocks.

In connection with the creation of the new tracking stocks, Liberty Media will be holding a Special Meeting of Stockholders on April 11, 2016 at 1:30 p.m., M.D.T., at the corporate offices of Starz, 8900 Liberty Circle, Englewood, Colorado 80112. The record date for the meeting is 5:00 p.m., New York City time, on February 22, 2016. At this special meeting, holders will be asked to vote on several proposals related to the creation of the new tracking stocks. The distribution ratios and other relevant information regarding the new tracking stocks are available in the Form S-4 filed on February 18, 2016 and declared effective by the SEC on February 19, 2016. The completion of the tracking stock restructuring is contingent upon (among other things, including the requisite stockholder approval) receipt of an opinion from counsel regarding the tax free nature of the transaction.

SiriusXM

SiriusXM is a separate publicly traded company and additional information about SiriusXM can be obtained through its website and filings with the SEC. SiriusXM reported its stand-alone fourth quarter and year end results on February 2, 2016. For presentation purposes, in this release, we include below the results of SiriusXM, as reported by SiriusXM, without regard to the purchase accounting adjustments applied by us for purposes of our financial statements. Liberty Media believes the presentation of financial results as reported by SiriusXM is useful to investors as the comparability of those results are best understood in the context of SiriusXM's historical financial presentation. For a reconciliation of revenue, adjusted OIBDA (as defined by Liberty Media) and operating income for SiriusXM's stand-alone operating results as reported by SiriusXM, to those results as reported by Liberty Media, see Liberty Media's Form 10-K for the year ended December 31, 2015.

Highlights of SiriusXM's earnings release included the following:

  • 2015 revenue up 9% to a record $4.6 billion
  • Net income grows to $510 million in 2015
  • 2015 adjusted EBITDA(2) climbs 13% to a record $1.66 billion
  • Free cash flow per fully-diluted share increases 23% in 2015 to 24 cents
  • Net subscriber growth in 2015 of 2.3 million

Share Repurchases

Between the reclassification of the original Liberty Capital tracking stock on March 3, 2008 and July 23, 2014, Liberty Media repurchased shares of Series A common stock for aggregate cash consideration of $2.9 billion, representing 51% of shares outstanding(3). From November 1, 2015 through January 31, 2016, Liberty Media repurchased approximately 298 thousand shares of Series C common stock at an average cost per share of $39.34 for total cash consideration of $11.7 million. For the period covering the creation of the Liberty Media Series C common stock on July 23, 2014 through January 31, 2016Liberty Media repurchased approximately 9.2 million shares of Series A and Series C common stock, collectively, at an average cost per share of $37.96 for total cash consideration of $350 million, representing 2.7% of shares outstanding(4). The total remaining repurchase authorization for Liberty Media stock is approximately $1.3 billion.

FOOTNOTES

         
1)       Liberty Media's President and CEO, Greg Maffei, will discuss these highlights and other matters in Liberty Media's earnings conference call which will begin at 11:30 a.m. (E.S.T.) on February 26, 2016. For information regarding how to access the call, please see "Important Notice" later in this document.
2)       For definitions of adjusted OIBDA (as defined by Liberty Media), Adjusted EBITDA (as defined by SiriusXM) and free cash flow (as defined by SiriusXM) and applicable reconciliations see the accompanying schedules.
3)       Based on shares outstanding at the time of the introduction of the original Liberty Capital stock.
4)       Based on shares outstanding as of October 31, 2014.
         

NOTES

Unless otherwise noted, the foregoing discussion compares financial information for the year ended December 31, 2015 to the same period in 2014.

The following financial information with respect to Liberty Media's equity affiliates and available-for-sale securities is intended to supplement Liberty Media's consolidated balance sheet and statement of operations to be included in its Form 10-K for the year ended December 31, 2015.

                       

Fair Value of Corporate Public Holdings

                      
                       
(amounts in millions)       9/30/2015         12/31/2015
Live Nation debt and equity(1)         1,316           1,735
Other public holdings(2)         461           450
Total Liberty Media       $ 1,777         $ 2,185
                       
(1)       Represents the fair value of Liberty Media's debt and equity investments. In accordance with GAAP, Liberty Media accounts for its investment in the equity of Live Nation using the equity method of accounting and includes it in its consolidated balance sheet at its historical carrying value of $395 million and $764 million at September 30, 2015 and December 31, 2015, respectively.
(2)       Represents Liberty Media's other public holdings which are accounted for at fair value.
         

Cash and Debt
The following presentation is provided to separately identify cash and liquid investments and debt information.

                 
(amounts in millions)   9/30/2015         12/31/2015  
                 
Cash and liquid investments(1)(2)   $ 607         $ 216  
Less: Short-term marketable securities     19           15  
Total Liberty Media Cash (GAAP)   $ 588         $ 201  
                 
Debt:                
SiriusXM senior notes(3)   $ 5,150         $ 5,150  
Liberty 1.375% cash convertible notes due 2023(4)     1,000           1,000  
Margin loans     250           250  
Atlanta Braves debt(5)     175           147  
Other subsidiary and corporate level debt(6)     305           391  
Total Liberty Media Debt     6,880           6,938  
Unamortized premium     (78 )         (42 )
Total Liberty Media Debt (GAAP)   $ 6,802         $ 6,896  
                     
(1)       Includes $19 million and $15 million of short-term marketable securities with an original maturity greater than 90 days as of September 30, 2015 and December 31, 2015.
(2)       Includes $153 million and $112 million of cash and liquid investments held at SiriusXM as of September 30, 2015 and December 31, 2015, respectively.
(3)       Outstanding principal amount of Senior Notes with no increase for the premium resulting from purchase accounting.
(4)       Face amount of the cash convertible notes with no adjustment for the fair market value adjustment.
(5)       Includes Atlanta National League Baseball Club, Inc. borrowings largely to fund the construction of a new stadium in Cobb County, Georgia.
(6)       Includes SiriusXM capital leases, borrowings under the SiriusXM revolving credit facility and other corporate level financing.
         

Total Liberty Media cash and liquid investments decreased $391 million during the quarter. Cash from operations at SiriusXM was more than offset by shares repurchased by SiriusXM, shares repurchased by Liberty Media, cash used to fund the settlement of the Live Nation forward contract and capital expenditures. Included in the year end consolidated cash and liquid investments is $112 million at SiriusXM. Although SiriusXM is a consolidated subsidiary, it is a separate public company with a significant non-controlling interest; therefore Liberty Media does not have ready access to SiriusXM's cash balance. Excluding cash held at SiriusXM, Liberty Media's cash and liquid investments balance at December 31, 2015 was $104 million.

Total Liberty Media debt increased by $94 million primarily as a result of borrowings on the SiriusXM credit facility and other corporate level borrowings.