Liberty(LLYVK) - 2025 Q1 - Quarterly Report

Part I Item 1. Financial Statements This section presents Liberty Media Corporation's unaudited condensed consolidated financial statements and detailed notes for the period ended March 31, 2025 Condensed Consolidated Balance Sheets | Metric | March 31, 2025 (millions) | December 31, 2024 (millions) | | :-------------------------------- | :-------------------------- | :--------------------------- | | Total Assets | $13,285 | $12,948 | | Total Liabilities | $6,226 | $5,897 | | Total Equity | $7,059 | $7,051 | | Cash and cash equivalents | $3,147 | $2,956 | | Deferred revenue | $1,009 | $267 | - Total assets increased by $337 million from December 31, 2024, to March 31, 2025, primarily driven by an increase in cash and cash equivalents and a significant rise in deferred revenue[9] Condensed Consolidated Statements of Operations | Metric | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Total Revenue | $447 | $587 | | Operating Income (Loss) | $(71) | $93 | | Net Earnings (Loss) | $5 | $245 | | Net Earnings (Loss) attributable to Liberty stockholders | $5 | $203 | | Basic EPS (Formula One common stock) | $0.09 | $0.33 | | Basic EPS (Liberty Live common stock) | $(0.18) | $(0.79) | - Total revenue decreased by $140 million, and operating income shifted from a gain of $93 million to a loss of $71 million year-over-year for the three months ended March 31, 2025. Net earnings attributable to Liberty stockholders also saw a significant decline from $203 million to $5 million, largely due to the discontinued operations of Liberty SiriusXM in the prior year[16][33] Condensed Consolidated Statements of Comprehensive Earnings (Loss) | Metric | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :---------------------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net earnings (loss) | $5 | $245 | | Other comprehensive earnings (loss) from continuing operations | $5 | $(30) | | Other comprehensive earnings (loss) from discontinued operations | $— | $(40) | | Comprehensive earnings (loss) attributable to Liberty stockholders | $10 | $133 | - Comprehensive earnings attributable to Liberty stockholders decreased from $133 million in Q1 2024 to $10 million in Q1 2025, primarily due to the absence of discontinued operations and a shift in credit risk on fair value debt instruments[23] Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :----------------------------------- | :----------------------------------------- | :----------------------------------------- | | Net cash provided (used) by operating activities | $381 | $131 | | Net cash provided (used) by investing activities | $(181) | $(296) | | Net cash provided (used) by financing activities | $(13) | $(9) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $191 | $(337) | | Cash, cash equivalents and restricted cash at end of period | $3,154 | $1,691 | - Net cash provided by operating activities significantly increased to $381 million in Q1 2025 from $131 million in Q1 2024, while net cash used in investing activities decreased. The company saw a net increase in cash of $191 million, a reversal from a $337 million decrease in the prior year[26] Condensed Consolidated Statements of Equity | Equity Component | Balance at March 31, 2025 (millions) | Balance at January 1, 2025 (millions) | | :--------------------------------- | :--------------------------------- | :-------------------------------- | | Total Stockholders' Equity | $7,037 | $7,029 | | Noncontrolling interests | $22 | $22 | | Total Equity | $7,059 | $7,051 | - Total equity increased slightly from $7,051 million at January 1, 2025, to $7,059 million at March 31, 2025, driven by net earnings and other comprehensive earnings[28] (1) Basis of Presentation - Liberty Media Corporation is primarily engaged in media and entertainment, with its most significant subsidiary being Delta Topco Limited (parent of Formula 1) and its most significant equity investment being Live Nation Entertainment, Inc.[32] - The company is in the process of acquiring approximately 86% of Dorna Sports, S.L. for €3.0 billion, with regulatory review extending to June 30, 2025, and a €126 million prepaid purchase consideration[37][39][144] - Formula 1 revenue and expenses are seasonal, generally lower in the first quarter due to the timing of World Championship race events[43] (2) Discontinued Operations - On September 9, 2024, Liberty completed the split-off of Liberty Sirius XM Holdings, which is now presented as a discontinued operation in the financial statements, reflecting a strategic shift[45][49] | Metric | Three months ended March 31, 2024 (millions) | | :------------------------------------------------- | :----------------------------------------- | | Revenue | $2,162 | | Operating income (loss) | $409 | | Net earnings (loss) from discontinued operations | $241 | | Net earnings (loss) from discontinued operations attributable to Liberty stockholders | $199 | (3) Tracking Stocks - Liberty's common stock was reclassified on August 3, 2023, into Liberty SiriusXM, Liberty Formula One, and Liberty Live tracking stocks. Liberty SiriusXM was subsequently split off on September 9, 2024[54][58] - The Formula One Group primarily includes Liberty's interests in Formula 1 and QuintEvents, with cash and cash equivalents of approximately $2,833 million as of March 31, 2025[56][140] - The Liberty Live Group is primarily comprised of Liberty's interest in Live Nation, cash, and other minority investments, with cash and cash equivalents of approximately $314 million as of March 31, 2025[57][141] - Liberty is pursuing a plan to split off the Liberty Live Group, which would result in Liberty Live Holdings, Inc. becoming a separate public company and Liberty Formula One common stock no longer being a tracking stock[59][61][145] (4) Stock-Based Compensation | Metric | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :-------------------------- | :----------------------------------------- | :----------------------------------------- | | Stock-based compensation expense | $2 | $13 | - Total unrecognized compensation cost related to unvested Awards was approximately $13 million as of March 31, 2025, to be recognized over a weighted average period of approximately 1.4 years[70] (5) Earnings Attributable to Liberty Media Corporation Stockholders Per Common Share | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Basic EPS (Series A, B and C Liberty Formula One) | $0.09 | $0.33 | | Diluted EPS (Series A, B and C Liberty Formula One) | $0.05 | $0.32 | | Basic EPS (Series A, B and C Liberty Live) | $(0.18) | $(0.79) | | Diluted EPS (Series A, B and C Liberty Live) | $(0.18) | $(0.79) | - Basic and diluted EPS for Liberty Formula One common stock decreased significantly year-over-year, while Liberty Live common stock continued to report losses, though the basic loss per share improved[20] (6) Assets and Liabilities Measured at Fair Value | Description | March 31, 2025 (millions) | December 31, 2024 (millions) | | :-------------------------- | :-------------------------- | :--------------------------- | | Cash equivalents | $2,765 | $2,466 | | Financial instrument assets | $134 | $167 | | Debt | $2,165 | $2,144 | | Financial instrument liabilities | $30 | $138 | | Realized and Unrealized Gains (Losses) | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :--------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Debt measured at fair value | $(1) | $(69) | | Foreign currency forward contracts | $108 | $— | | Interest rate swaps | $(35) | $41 | | Debt and equity securities | $(7) | $12 | | Total | $65 | $(21) | - The company reported a net realized and unrealized gain of $65 million on financial instruments for Q1 2025, a significant improvement from a $21 million loss in Q1 2024, primarily driven by gains on foreign currency forward contracts[91] (7) Investments in Affiliates Accounted for Using the Equity Method | Investment | March 31, 2025 Carrying Amount (millions) | December 31, 2024 Carrying Amount (millions) | | :------------------- | :--------------------------------------- | :----------------------------------------- | | Live Nation (30% ownership) | $451 | $430 | | Consolidated Liberty Total | $510 | $491 | | Share of Earnings (Losses) | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :--------------------------- | :----------------------------------------- | :----------------------------------------- | | Live Nation | $4 | $(20) | | Consolidated Liberty Total | $1 | $(24) | - Liberty's share of earnings from affiliates improved significantly, moving from a $24 million loss in Q1 2024 to a $1 million gain in Q1 2025, primarily due to Live Nation's improved performance[94] (8) Long-Term Debt | Debt Category | March 31, 2025 Principal (millions) | March 31, 2025 Carrying Value (millions) | | :------------------------------------ | :---------------------------------- | :--------------------------------------- | | Formula One Group Total | $2,902 | $2,982 | | Liberty Live Group Total | $1,150 | $1,582 | | Total Debt | $4,052 | $4,564 | | Total Long-Term Debt | | $4,534 | - Formula 1 refinanced its Senior Loan Facilities on September 19, 2024, extending maturities and reducing the Term Loan B margin to 2.0%. The weighted average interest rate on these facilities was approximately 6.16% as of March 31, 2025[105] - Incremental Term Loans of $850 million (Term Loan B) and $150 million (Term Loan A) are conditioned upon the consummation of the Dorna acquisition[106] (9) Commitments and Contingencies - Formula 1 paid a one-time incentive of $50 million to the 10 teams for signing the 2026 Concorde Commercial Agreement, which extends arrangements until December 31, 2030[111] - The company has contingent liabilities related to legal and tax proceedings, but management expects any required amounts to satisfy these contingencies will not be material[113] (10) Information About Liberty's Operating Segments - Liberty identifies Formula 1 as a reportable segment, which is a global motorsports business holding exclusive commercial rights to the World Championship[118] - Adjusted OIBDA is defined as revenue less operating and SG&A expenses, excluding specific non-recurring and non-cash items[117] | Segment Performance (Adjusted OIBDA) | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :----------------------------------- | :----------------------------------------- | :----------------------------------------- | | Formula One Group | $73 | $202 | | Liberty Live Group | $(4) | $(1) | | Consolidated Liberty | $69 | $201 | - Consolidated Adjusted OIBDA decreased by $132 million year-over-year, primarily due to a decrease in Formula 1's Adjusted OIBDA[152] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes Liberty Media Corporation's Q1 2025 financial condition, operating results, and segment performance Overview - Liberty Media Corporation holds controlling and non-controlling interests in media and entertainment companies, with Formula 1 as its most significant operating subsidiary and Live Nation as a key equity method investment[132][134] - The company completed the split-off of Liberty Sirius XM Holdings on September 9, 2024, and is pursuing a plan to split off the Liberty Live Group, which would make Liberty Formula One common stock no longer a tracking stock[137][145] - Liberty is in the process of acquiring approximately 86% of Dorna Sports, S.L. for €3.0 billion, with regulatory review extending to June 30, 2025[144] Consolidated Operating Results | Metric | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :-------------------------- | :----------------------------------------- | :----------------------------------------- | | Total Revenue | $447 | $587 | | Operating Income (Loss) | $(71) | $93 | | Adjusted OIBDA | $69 | $201 | | Stock-based compensation | $2 | $13 | | Acquisition costs | $11 | $9 | | Concorde incentive payments | $50 | $— | - Consolidated revenue decreased by $140 million, and operating income shifted to a loss of $71 million from a $93 million gain, primarily due to a decrease in Formula 1 revenue and operating results[148][149] - Adjusted OIBDA decreased by $132 million, mainly driven by a decline in Formula 1's Adjusted OIBDA, and included a $50 million Concorde incentive payment in Q1 2025[152] Other Income and Expense | Metric | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :------------------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Interest expense | $(55) | $(62) | | Share of earnings (losses) of affiliates, net | $1 | $(24) | | Realized and unrealized gains (losses) on financial instruments, net | $65 | $(21) | | Other, net | $36 | $21 | | Earnings (loss) from continuing operations before income taxes | $(24) | $7 | | Income tax (expense) benefit | $29 | $(3) | - Interest expense decreased by $7 million due to lower average debt and reduced interest rates on Formula 1's Senior Loan Facilities[154] - A significant shift from a $21 million net loss to a $65 million net gain on financial instruments was primarily driven by foreign currency forward contracts[156] - The company reported a net tax benefit of $29 million on a $24 million loss from continuing operations before income taxes in Q1 2025, compared to a $3 million tax expense on a $7 million gain in Q1 2024[158] Material Changes in Financial Condition | Cash and Cash Equivalents (March 31, 2025) | Amount (millions) | | :----------------------------------------- | :---------------- | | Formula One Group | $2,833 | | Liberty Live Group | $314 | | Total | $3,147 | - Liberty's primary use of cash in Q1 2025 was a $131 million extension payment for the Dorna acquisition, accounted for as prepaid purchase consideration[165] - Formula 1 distributed $131 million to Liberty during Q1 2025, with the restricted payment test met, and had $33 million in capital expenditures[163][166] - The company believes its available liquidity sources are sufficient to cover projected future uses of cash, including capital expenditures, investments, debt service, and potential stock buybacks[167][169] Results of Operations—Businesses | Formula 1 Operating Results | Three months ended March 31, 2025 (millions) | Three months ended March 31, 2024 (millions) | | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Total Formula 1 revenue | $403 | $553 | | Adjusted OIBDA | $85 | $208 | | Operating income (loss) | $(28) | $136 | | Number of Events | 2 | 3 | - Total Formula 1 revenue decreased by $150 million, and operating income shifted to a $28 million loss from a $136 million gain, primarily due to one less World Championship event held in Q1 2025 compared to Q1 2024[172][173] - Other Formula 1 revenue decreased by $6 million, mainly due to lower hospitality and experiences revenue, partially offset by higher freight income and licensing revenue[175] - Cost of Formula 1 revenue decreased by $44 million, driven by lower team payments due to fewer events, but other costs increased due to higher freight and commissions[176][177][178] - Selling, general and administrative expenses increased by $17 million due to higher marketing costs for the 75th season launch and increased personnel costs[179] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section outlines Liberty Media Corporation's market risk exposure from interest rates and stock prices, managed via debt and financial instruments - Liberty is exposed to market risk from changes in interest rates due to borrowing and investment activities, managing this through a mix of fixed and variable rate debt[182] | Debt Type (March 31, 2025) | Principal Amount (millions) | Weighted Average Interest Rate | | :------------------------- | :-------------------------- | :----------------------------- | | Formula One Group Variable Rate | $176 | 6.2% | | Formula One Group Fixed Rate | $2,726 | 4.4% | | Liberty Live Group Fixed Rate | $1,150 | 2.4% | - The company is exposed to stock price changes due to significant holdings in publicly traded securities, such as Live Nation, and uses equity collars to manage associated market risk[183][184] Item 4. Controls and Procedures As of March 31, 2025, management concluded Liberty Media Corporation's disclosure controls and procedures were effective - The company's disclosure controls and procedures were deemed effective as of March 31, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[185] - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025[186] Part II Item 1. Legal Proceedings This section refers to legal proceedings disclosed in the 2024 Annual Report on Form 10-K, with no material changes - No material changes to legal proceedings from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[187] Item 1A. Risk Factors This section updates risk factors, highlighting adverse effects of U.S. dollar fluctuations on Formula 1 profitability and reduced consumer demand - Fluctuations in the U.S. dollar against Formula 1's functional currencies (e.g., pound sterling, Euro) could adversely affect profitability, especially as counterparties' payments are often in U.S. dollars while their revenue is in other currencies[190] - Weak and uncertain economic conditions, including rising inflation and elevated interest rates, may reduce consumer discretionary spending, thereby adversely affecting demand for the company's products, services, and events[191] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on share repurchase programs and equity security transactions, noting no repurchases of Liberty Formula One or Liberty Live common stock in Q1 2025 - No repurchases of Liberty Formula One common stock or Liberty Live common stock occurred during the three months ended March 31, 2025[193] - Approximately $1.1 billion remained available for future share repurchases under the approved program as of March 31, 2025[193] Item 5. Other Information This section states no Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during Q1 2025 - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the fiscal quarter ended March 31, 2025[195] Item 6. Exhibits This section lists exhibits filed as part of the Quarterly Report on Form 10-Q, including various agreements, certifications, and XBRL documents - The report includes exhibits such as the 3rd Amendment Agreement, Rule 13a-14(a)/15d-14(a) Certifications, Section 1350 Certification, Unaudited Attributed Financial Information for Tracking Stock Groups, and Inline XBRL documents[196]