Liberty SiriusXM Group (NASDAQ:LSXMK) Q4 2020 Earnings Conference Call February 26, 2021 10:00 AM ET Company Participants Courtnee Chun – Chief Portfolio Officer Greg Maffei – President and Chief Executive Officer Stefano Domenicali – Formula One-President and Chief Executive Officer Brian Wendling – Chief Accounting Officer and Principal Financial Officer Ben Oren – Senior Vice President and Treasurer Conference Call Participants Vijay Jayant – Evercore David Karnovsky – JP Morgan Ben Swinburne – Morgan St ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35707 LIBERTY MEDIA CORPORATION (Exact name of Registrant as specified in its charter) State of Delaware (State or other juri ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35707 LIBERTY MEDIA CORPORATION (Exact name of Registrant as specified in its charter) State of Delaware 37-1699499 ...

Part I – Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Liberty Media Corporation, including balance sheets, statements of operations, cash flows, and equity, with detailed explanatory notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2020, shows total assets increased to $46,208 million, driven by a rise in cash and cash equivalents, with total liabilities also increasing to $24,120 million Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$46,208** | **$44,189** | | Cash and cash equivalents | $3,999 | $1,222 | | Goodwill | $19,956 | $19,939 | | Total current assets | $5,381 | $2,405 | | **Total Liabilities** | **$24,120** | **$22,264** | | Current portion of debt | $1,874 | $60 | | Long-term debt | $14,980 | $15,416 | | Total current liabilities | $6,015 | $3,888 | | **Total Equity** | **$22,088** | **$21,925** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2020, the company reported a net loss of $262 million, a significant downturn from net earnings in 2019, driven by a sharp decline in revenue to $1,909 million due to COVID-19 impacts Key Operating Results (in millions) | Metric | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $1,909 | $2,805 | $3,922 | $4,817 | | Operating Income (Loss) | $214 | $461 | $460 | $661 | | Net Earnings (Loss) | $(262) | $192 | $(260) | $65 | | Net Earnings (Loss) Attributable to Liberty Stockholders | $(326) | $116 | $(402) | $(42) | Diluted EPS Attributable to Liberty Stockholders | Common Stock | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Liberty SiriusXM | $(0.27) | $0.50 | $0.28 | $0.68 | | Liberty Braves | $(0.75) | $0.46 | $(1.22) | $(0.88) | | Liberty Formula One | $(0.86) | $(0.33) | $(2.34) | $(0.97) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2020, net cash provided by operating activities was $869 million, while financing activities provided $2,069 million, leading to a $2,725 million increase in cash and cash equivalents Six Months Ended June 30 Cash Flow Summary (in millions) | Cash Flow Category | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $869 | $1,172 | | Net cash provided (used) by investing activities | $(203) | $512 | | Net cash provided (used) by financing activities | $2,069 | $(1,385) | | **Net increase in cash** | **$2,725** | **$299** | - Financing activities in H1 2020 included **$2.84 billion** in debt borrowings and **$754 million** from a Liberty SiriusXM rights offering, partially offset by **$884 million** in debt repayments and **$537 million** in stock repurchases by Liberty and its subsidiary[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide critical details on accounting policies, the impact of COVID-19, asset reattribution, acquisitions, stock-based compensation, EPS calculations, fair value measurements, investments, and debt covenants - The COVID-19 pandemic caused significant disruptions, leading to the delay of the 2020 Formula 1 and Major League Baseball seasons and the suspension of large-scale events by Live Nation[47](index=47&type=chunk) - On April 22, 2020, the company reattributed certain assets and liabilities between the Formula One Group and the Liberty SiriusXM Group, including moving the Live Nation stake to the Liberty SiriusXM Group[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - In June 2020, Sirius XM Holdings acquired Simplecast, a podcast management platform, for **$28 million** in cash[78](index=78&type=chunk) - Braves Holdings is expected to be out of compliance with certain debt covenants as of June 30, 2020, and is in discussions with counterparties for waivers and modifications[174](index=174&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details the company's operating results, financial condition, and liquidity, highlighting the significant impact of the COVID-19 pandemic and asset reattribution on segment performance - The COVID-19 pandemic and governmental responses have materially impacted the company's businesses, especially Formula 1, the Atlanta Braves, and Live Nation, leading to event cancellations and postponements[210](index=210&type=chunk)[228](index=228&type=chunk) - A significant reattribution of assets and liabilities between the Formula One Group and Liberty SiriusXM Group occurred on April 22, 2020, moving the Live Nation stake and related debt to the Liberty SiriusXM Group[220](index=220&type=chunk)[221](index=221&type=chunk) Consolidated Operating Results Summary (in millions) | Metric | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,909 | $2,805 | $3,922 | $4,817 | | Operating Income | $214 | $461 | $460 | $661 | | Adjusted OIBDA | $549 | $815 | $1,113 | $1,429 | - The company's cash position increased significantly in H1 2020, driven by net cash from financing activities of **$2.07 billion**, which included debt borrowings and a **$754 million** rights offering[257](index=257&type=chunk) [Results of Operations—Businesses](index=58&type=section&id=Results%20of%20Operations%E2%80%94Businesses) This subsection provides a detailed operational review of the company's main segments, highlighting the varied impact of the pandemic on Sirius XM, Formula 1, and Braves Holdings - Sirius XM's Q2 advertising revenue fell **52% YoY** due to lower ad spend from the COVID-19 pandemic, particularly on news and sports channels[278](index=278&type=chunk) - Pandora's Q2 advertising revenue decreased **31% YoY**, also due to lower ad spend as a result of the COVID-19 pandemic[284](index=284&type=chunk) - Formula 1 held no events in Q2 2020, causing primary revenue to fall to **$12 million** from **$531 million** in Q2 2019, leading to an Adjusted OIBDA loss of **$16 million** for the quarter[298](index=298&type=chunk)[300](index=300&type=chunk) - Braves Holdings' baseball revenue dropped to **$5 million** in Q2 2020 from **$198 million** in Q2 2019 due to the postponement of the MLB season, resulting in an Adjusted OIBDA loss of **$26 million**[311](index=311&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from changes in interest rates and stock prices, managing interest rate risk through debt mix and addressing LIBOR phase-out - The company manages interest rate risk with a mix of fixed and variable rate debt, with total principal debt approximately **$16.9 billion** as of June 30, 2020[318](index=318&type=chunk) - The company acknowledges the risk associated with the planned phase-out of LIBOR by the end of 2021, expecting to incorporate alternative reference rates in its debt agreements[318](index=318&type=chunk)[319](index=319&type=chunk) - The company is exposed to stock price risk through its **$242 million** portfolio of marketable securities and its significant equity investment in Live Nation, where a 10% decline would reduce value by **$24 million** and **$309 million**, respectively[321](index=321&type=chunk) [Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal controls despite remote work - Management concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2020[322](index=322&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter, and the COVID-19 pandemic did not materially impact these controls despite a remote work environment[323](index=323&type=chunk) Part II — Other Information [Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms no material changes in legal proceedings from those previously disclosed in the 2019 Form 10-K and Q1 2020 Form 10-Q - There were no material changes to the legal proceedings previously disclosed in the 2019 Form 10-K and Q1 2020 Form 10-Q[325](index=325&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) This section highlights the material and uncertain impact of the COVID-19 pandemic on Formula 1, the Atlanta Braves, and Live Nation, causing revenue decreases and potential long-term adverse effects - The COVID-19 pandemic and related government restrictions have materially and negatively impacted the operations of Formula 1, the Atlanta Braves, and Live Nation[327](index=327&type=chunk) - The impact of cancelled events, closed venues, and reduced attendance will substantially decrease revenue, and expenses may not be reducible to the same degree, adversely affecting results of operations and cash flow[330](index=330&type=chunk) - Long-term economic recession caused by COVID-19 could lead to a further decline in discretionary consumer spending on sports and entertainment, resulting in long-term negative effects on the businesses[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company had approximately $1.23 billion available for share repurchases as of June 30, 2020, with no repurchases made during the quarter - As of June 30, 2020, **$1.23 billion** was available under the company's share repurchase programs[334](index=334&type=chunk) - There were no share repurchases of any Liberty Media common stock during the three months ended June 30, 2020[335](index=335&type=chunk) [Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report, including officer certifications and unaudited attributed financial information - The report includes exhibits such as officer certifications (Rule 13a-14(a)/15d-14(a) and Section 1350), an employment-related agreement, and unaudited financial information for the tracking stock groups[338](index=338&type=chunk)[341](index=341&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35707 LIBERTY MEDIA CORPORATION (Exact name of Registrant as specified in its charter) State of Delaware 37-1699499 (Sta ...

Summary of Liberty Media Corporation Conference Call Company and Industry Overview - **Company**: Liberty Media Corporation (NASDAQ: LSXMA) - **Industry**: Media and Entertainment, specifically focusing on Formula One Group and SiriusXM Group Key Points and Arguments Reattribution Details - Liberty Media completed a reattribution between Formula One Group (FWON) and Liberty SiriusXM Group (LSXM), transferring $1.5 billion of net asset value equitably across the two trackers [5][6][7] - Total assets transferred from FWON to LSXM amounted to $2.8 billion, including a stake in Live Nation (LYV) and intergroup interests [6] - Liabilities transferred from FWON to LSXM totaled $1.3 billion, which included convertible notes and exchangeable debt [7] Benefits to Shareholders - **FWON Shareholders**: - Creation of a pure-play Formula One stock, allowing investors to make independent allocation decisions [9] - Strengthened balance sheet and increased cash liquidity, eliminating $1.3 billion of parent-level debt [9] - Enhanced opportunities for targeted repurchases and acquisitions [9] - Inclusion of a call spread to benefit from potential rebounds in LYV stock [10] - **LSXM Shareholders**: - Combination of complementary interests between SiriusXM and LYV, enhancing long-term investment potential [11] - Removal of overhang on LSXM equity, reducing risks associated with collapsing trackers [12] - Rights offering planned to raise $750 million at a 20% discount to NAV, providing liquidity for future investments [12][13] Market Conditions and Strategic Outlook - The current market environment is challenging due to COVID-19, but historical precedents suggest opportunities may arise [8] - Liberty Media aims to be opportunistic in the market, leveraging the strength of both FWON and LSXM [8] - The company is confident in the success of the rights offering, with plans to launch on May 18th and complete by June 2nd [13] Operational Challenges and Future Scenarios - Formula One faces uncertainties regarding the number of races and potential profitability due to COVID-19 [26][28] - The company is exploring various scenarios for the racing season, including zero races or races with no fans [26] - Discussions with lenders regarding covenant issues are ongoing, with positive dialogues expected to improve liquidity [34][35] Acquisitions and Investments - Liberty Media is considering opportunistic investments in live events and motorsports, leveraging its strong balance sheet [36] - The company is open to potential investments in distressed assets, similar to strategies employed during the last recession [37] Liquidity and Financial Health - Liberty Media believes it has sufficient liquidity across its trackers, with no immediate need for additional capital [63][64] - The reattribution is expected to enhance the financial health of both FWON and LSXM, allowing for better management of liquidity needs [64] Conclusion - The reattribution is viewed as a strategic move to strengthen both FWON and LSXM, providing clarity and focus for shareholders [14] - Future discussions will include Q1 earnings and operational results for Formula One, LYV, and SiriusXM [14] Additional Important Points - The call spread included in the reattribution provides FWON with upside protection in case of a near-term recovery in LYV stock [10][68] - The decision to not move Viacom and AT&T stocks to LSXM was based on strategic alignment rather than a desire to eliminate complexity [57] - Liberty Media's management remains optimistic about the long-term potential of its businesses despite current market volatility [50]

Liberty Media Corporation Reattribution Between Formula One Group ("FWON") and Liberty SiriusXM Group ("LSXM") Cautionary Statements; Disclaimer Forward Looking Statements This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the benefits of the reattribution, the proposed rights offering, including the timing of the rights offering, trading of the rights and the intentions of Messrs. Malone and Ma ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35707 LIBERTY MEDIA CORPORATION (Exact name of Registrant as specified in its charter) State of Delaware (State or other juri ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35707 LIBERTY MEDIA CORPORATION (Exact name of Registrant as specified in its charter) State of Delaware 37-1699499 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35707 LIBERTY MEDIA CORPORATION (Exact name of Registrant as specified in its charter) State of Delaware 37-1699499 (Stat ...