Liberty(LSXMK) - 2021 Q1 - Quarterly Report

Part I – Financial Information Item 1. Financial Statements This section presents Liberty Media Corporation's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive earnings (loss), cash flows, and equity, along with detailed notes explaining the basis of presentation, tracking stock structure, stock-based compensation, earnings per share, fair value measurements, investments in affiliates, intangible assets, long-term debt, Liberty Media Acquisition Corporation, commitments and contingencies, and segment information Condensed Consolidated Balance Sheets This section provides a snapshot of Liberty Media Corporation's financial position, detailing assets, liabilities, and equity as of March 31, 2021, compared to December 31, 2020 Condensed Consolidated Balance Sheet Highlights (March 31, 2021 vs. December 31, 2020) | Metric | March 31, 2021 (millions) | December 31, 2020 (millions) | | :-------------------------------- | :-------------------------- | :--------------------------- | | Total Assets | $44,465 | $44,004 | | Total Liabilities | $24,992 | $24,403 | | Total Stockholders' Equity | $14,670 | $15,091 | | Total Equity | $18,898 | $19,601 | - Total assets increased by $461 million, primarily driven by an increase in other assets and cash and cash equivalents[10] - Total liabilities increased by $589 million, mainly due to increases in long-term debt and deferred revenue[10] - Total equity decreased by $703 million, with stockholders' equity decreasing by $421 million and noncontrolling interests decreasing by $282 million[14] Condensed Consolidated Statements of Operations This section presents Liberty Media Corporation's financial performance, detailing revenues, expenses, and net earnings (loss) for the three months ended March 31, 2021, compared to the prior year Condensed Consolidated Statements of Operations Highlights (Three months ended March 31, 2021 vs. 2020) | Metric | Three months ended March 31, 2021 (millions) | Three months ended March 31, 2020 (millions) | | :------------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Total Revenue | $2,254 | $2,013 | | Operating Income (Loss) | $142 | $246 | | Earnings (Loss) before income taxes | $(145) | $38 | | Net Earnings (Loss) | $(14) | $2 | | Net Earnings (Loss) attributable to Liberty stockholders | $(116) | $(76) | - Total revenue increased by $241 million (11.97%) year-over-year, primarily driven by Sirius XM Holdings and Formula 1[17] - Operating income decreased by $104 million, largely due to a $245 million impairment, restructuring and acquisition costs in 2021[17] - Net earnings attributable to Liberty stockholders decreased from a loss of $76 million in Q1 2020 to a loss of $116 million in Q1 2021[17] Basic Net Earnings (Loss) Per Common Share (Q1 2021 vs. Q1 2020) | Class | March 31, 2021 | March 31, 2020 | | :---------------------------------- | :------------- | :------------- | | Series A, B and C Liberty SiriusXM | $(0.03) | $0.66 | | Series A, B and C Liberty Braves | $(1.13) | $1.04 | | Series A, B and C Liberty Formula One | $(0.20) | $(1.48) | Condensed Consolidated Statements of Comprehensive Earnings (Loss) This section details Liberty Media Corporation's comprehensive earnings (loss), including net earnings (loss) and other comprehensive income (loss) components, for the three months ended March 31, 2021, and 2020 Condensed Consolidated Statements of Comprehensive Earnings (Loss) Highlights (Three months ended March 31, 2021 vs. 2020) | Metric | Three months ended March 31, 2021 (millions) | Three months ended March 31, 2020 (millions) | | :------------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net Earnings (Loss) | $(14) | $2 | | Other comprehensive earnings (loss), net of taxes | $(44) | $143 | | Comprehensive earnings (loss) | $(58) | $145 | | Comprehensive earnings (loss) attributable to Liberty stockholders | $(161) | $77 | - Other comprehensive earnings (loss) shifted from a gain of $143 million in Q1 2020 to a loss of $44 million in Q1 2021, primarily due to credit risk on fair value debt instruments[24] Condensed Consolidated Statements of Cash Flows This section outlines Liberty Media Corporation's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2021, and 2020 Condensed Consolidated Statements of Cash Flows Highlights (Three months ended March 31, 2021 vs. 2020) | Metric | Three months ended March 31, 2021 (millions) | Three months ended March 31, 2020 (millions) | | :------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $497 | $557 | | Net cash used by investing activities | $(716) | $(58) | | Net cash provided by financing activities | $383 | $38 | | Net increase in cash, cash equivalents and restricted cash | $162 | $529 | | Cash, cash equivalents and restricted cash at end of period | $3,039 | $1,835 | - Net cash provided by operating activities decreased by $60 million, mainly due to changes in operating assets and liabilities[27] - Net cash used by investing activities significantly increased from $58 million in Q1 2020 to $716 million in Q1 2021, primarily due to a $575 million investment of subsidiary IPO proceeds into a trust account[27] - Net cash provided by financing activities increased substantially from $38 million in Q1 2020 to $383 million in Q1 2021, driven by higher debt borrowings and proceeds from a subsidiary IPO, partially offset by increased subsidiary share repurchases[27] Condensed Consolidated Statements of Equity This section details changes in Liberty Media Corporation's equity, including stockholders' equity and noncontrolling interests, for the three months ended March 31, 2021 - Total equity decreased from $19,601 million at January 1, 2021, to $18,898 million at March 31, 2021, primarily due to net losses attributable to Liberty stockholders and share repurchases[31] - Liberty SiriusXM stock repurchases amounted to $107 million during the three months ended March 31, 2021[31] - Subsidiary shares repurchased by subsidiary totaled $516 million for the three months ended March 31, 2021[31] Notes to Condensed Consolidated Financial Statements This section provides detailed explanatory notes to Liberty Media Corporation's unaudited condensed consolidated financial statements, offering context on accounting policies, significant transactions, and financial instrument details Note 1: Basis of Presentation This note outlines the consolidation principles for Liberty Media Corporation and its subsidiaries, primarily engaged in media and entertainment, detailing significant subsidiaries, equity investments, COVID-19 impacts, seasonality, and intercompany agreements - Liberty Media Corporation consolidates all controlled subsidiaries, including Sirius XM Holdings, Delta Topco Limited (Formula 1), and Braves Holdings, LLC[37][38] - The most significant equity method investment is Live Nation Entertainment, Inc[38] - COVID-19 significantly impacted Formula 1, Major League Baseball, and Live Nation in 2020, delaying seasons and suspending events, with potential ongoing impacts on fan attendance and revenue in 2021[41][50][53] - Formula 1 and Braves Holdings revenues are seasonal, with the majority recognized in Q2/Q3 for Braves and Q3/Q4 for Formula 1, though COVID-19 shifted 2020 recognition[49][50] - Liberty provides general and administrative services to related publicly traded companies (Qurate Retail, Liberty TripAdvisor, Liberty Broadband, LMAC) and is reimbursed approximately $8 million and $10 million for the three months ended March 31, 2021 and 2020, respectively[47] Note 2: Tracking Stocks This note explains Liberty Media's tracking stock structure, which includes Liberty SiriusXM, Liberty Braves, and Liberty Formula One common stocks, each intended to reflect the economic performance of specific business groups - Liberty operates with three tracking stocks: Liberty SiriusXM, Liberty Braves, and Liberty Formula One, which track specific business groups but are not separate legal entities[54] - The Liberty SiriusXM Group includes interests in Sirius XM Holdings and Live Nation, corporate cash, and various debt instruments, with $1,030 million in cash and cash equivalents as of March 31, 2021[56] - The Braves Group primarily comprises Braves Holdings (Atlanta Braves and stadium development) and corporate cash, with $181 million in cash and cash equivalents as of March 31, 2021[57] - The Formula One Group includes interests in Formula 1 and LMAC, an intergroup interest in the Braves Group, and certain debt instruments, with $1,783 million in cash and cash equivalents as of March 31, 2021[60] - Intergroup interests exist between the tracking stock groups, representing quasi-equity interests that may be settled via stock, cash, or other assets[61] - A reattribution of certain assets and liabilities between the Formula One Group and the Liberty SiriusXM Group was approved on April 22, 2020[55] Note 3: Stock-Based Compensation This note details Liberty's stock-based compensation, including restricted stock, RSUs, and stock options granted to directors, employees, and subsidiary employees, and the associated expense recognition Stock-Based Compensation Expense (Three months ended March 31, 2021 vs. 2020) | Category | March 31, 2021 (millions) | March 31, 2020 (millions) | | :-------------------------------- | :------------------------ | :------------------------ | | Cost of services | $10 | $12 | | Other operating expense | $10 | $11 | | Selling, general and administrative | $43 | $45 | | Total | $63 | $67 | - Total stock-based compensation expense decreased by $4 million (5.97%) year-over-year, primarily due to a decrease at Sirius XM Holdings[66][231] - As of March 31, 2021, total unrecognized compensation cost for unvested Liberty equity awards was approximately $75 million, to be recognized over 1.9 years[77] - Sirius XM Holdings' stock-based compensation expense was $51 million in Q1 2021, down from $55 million in Q1 2020, with unrecognized compensation cost of $467 million to be recognized over 2.3 years[79] Note 4: Earnings Attributable to Liberty Media Corporation Stockholders Per Common Share This note details the calculation of basic and diluted Earnings Per Share (EPS) for Liberty's tracking stocks, explaining the treatment of potentially dilutive shares and intergroup interests - Potentially dilutive shares are excluded from diluted EPS calculations when their inclusion would be antidilutive, particularly during periods of net losses[81][85][90][94] Basic and Diluted WASO (Weighted Average Shares Outstanding) (Three months ended March 31, 2021 vs. 2020) | Class | Metric | March 31, 2021 (millions) | March 31, 2020 (millions) | | :---------------------------------- | :-------------------- | :------------------------ | :------------------------ | | Liberty SiriusXM | Basic WASO | 338 | 324 | | | Diluted WASO | 339 | 329 | | Liberty Braves | Basic WASO | 52 | 51 | | | Diluted WASO | 61 | 61 | | Liberty Formula One | Basic WASO | 232 | 232 | | | Diluted WASO | 239 | 233 | - Intergroup interests, represented by notional shares, are included in diluted WASO and adjusted in the numerator for unrealized gains/losses, impacting diluted EPS[86][89][94] Note 5: Assets and Liabilities Measured at Fair Value This note outlines Liberty's assets and liabilities measured at fair value, categorized by GAAP's three-level hierarchy, and details realized and unrealized gains/losses on financial instruments Fair Value Measurements (March 31, 2021 vs. December 31, 2020) | Description | March 31, 2021 (millions) | December 31, 2020 (millions) | | :-------------------------- | :------------------------ | :------------------------- | | Cash equivalents | $2,704 | $2,586 | | Debt and equity securities | $366 | $266 | | Financial instrument assets | $443 | $424 | | Debt | $4,718 | $4,545 | | Financial instrument liabilities | $121 | $106 | - The majority of Liberty's financial instruments measured at fair value are classified as Level 2, indicating their values are derived from observable market data rather than active market prices[98] Realized and Unrealized Gains (Losses) on Financial Instruments, net (Three months ended March 31, 2021 vs. 2020) | Category | March 31, 2021 (millions) | March 31, 2020 (millions) | | :------------------------------------ | :------------------------ | :------------------------ | | Debt and equity securities | $49 | $(135) | | Debt measured at fair value | $(113) | $544 | | Change in fair value of bond hedges | $13 | $(323) | | Other derivatives | $2 | $(85) | | Total | $(49) | $1 | - A significant shift occurred in debt measured at fair value, moving from a $544 million gain in Q1 2020 to a $113 million loss in Q1 2021, primarily due to market factors affecting underlying shares[101] Note 6: Investments in Affiliates Accounted for Using the Equity Method This note details Liberty's equity method investments, including Live Nation and Sirius XM Canada, and presents Liberty's share of earnings (losses) from these affiliates Significant Equity Method Investments (March 31, 2021 vs. December 31, 2020) | Affiliate | Group | Ownership % | Carrying Amount (March 31, 2021, millions) | Carrying Amount (December 31, 2020, millions) | | :---------------- | :------------------ | :---------- | :----------------------------------------- | :------------------------------------------ | | Live Nation | Liberty SiriusXM | 32% | $60 | $163 | | Sirius XM Canada | Liberty SiriusXM | 70% | $653 | $643 | | Total Consolidated | | | $943 | $1,018 | Share of Earnings (Losses) of Affiliates (Three months ended March 31, 2021 vs. 2020) | Group | March 31, 2021 (millions) | March 31, 2020 (millions) | | :------------------ | :------------------------ | :------------------------ | | Liberty SiriusXM | $(113) | $(2) | | Braves Group | $3 | $4 | | Formula One Group | $15 | $(64) | | Consolidated | $(95) | $(62) | - Liberty's interest in Live Nation was reattributed from the Formula One Group to the Liberty SiriusXM Group effective April 22, 2020[106] - Sirius XM Holdings has a $122 million loan to Sirius XM Canada and receives 30% of its gross revenue through service and advisory agreements[108][109] - Sirius XM Holdings made a $75 million equity method investment in SoundCloud in February 2020, complementing Pandora's exclusive U.S. ad sales representation for SoundCloud[113][114] Note 7: Intangible Assets This note provides details on Liberty's goodwill and intangible assets subject to amortization, including their carrying amounts, changes, and projected amortization expense Goodwill Carrying Amount (March 31, 2021) | Segment | Goodwill (millions) | | :---------------- | :------------------ | | Sirius XM Holdings | $15,088 | | Formula 1 | $3,956 | | Other | $180 | | Total | $19,224 | - Goodwill increased by $6 million due to adjustments for Sirius XM Holdings' acquisition of Stitcher[115] Intangible Assets Subject to Amortization, Net (March 31, 2021 vs. December 31, 2020) | Category | March 31, 2021 (millions) | December 31, 2020 (millions) | | :-------------------- | :------------------------ | :------------------------- | | FIA Agreement | $2,839 | $2,888 | | Customer relationships | $1,592 | $1,664 | | Licensing agreements | $130 | $134 | | Other | $671 | $692 | | Total Net | $5,232 | $5,378 | - Amortization expense for intangible assets was $199 million for the three months ended March 31, 2021[118] Projected Amortization Expense for Intangible Assets (millions) | Period | Amount (millions) | | :---------------- | :---------------- | | Remainder of 2021 | $604 | | 2022 | $763 | | 2023 | $544 | | 2024 | $404 | | 2025 | $350 | Note 8: Long-Term Debt This note provides a comprehensive overview of Liberty's long-term debt, detailing various corporate and subsidiary notes and loans across its tracking stock groups, including debt covenants and the anticipated transition away from LIBOR Long-Term Debt Summary (March 31, 2021) | Group | Principal Outstanding (millions) | Carrying Value (millions) | | :------------------ | :----------------------------- | :------------------------ | | Liberty SiriusXM | $13,150 | $13,683 | | Braves Group | $676 | $672 | | Formula One Group | $3,626 | $3,753 | | Total Debt | $17,452 | $18,108 | - Liberty's 1.375% Cash Convertible Notes due 2023, 1% Cash Convertible Notes due 2023, and various Exchangeable Senior Debentures are measured at fair value[121][125][131][134][137][138][139][142] - The Sirius XM Holdings Margin Loan was amended in February 2021, extending maturity to March 2024 and increasing the term loan to $875 million, with $875 million available under the revolving line of credit, collateralized by 1,305.0 million shares of Sirius XM Holdings common stock ($7,947 million value)[143] - The Live Nation Margin Loan was amended in November 2020, reducing borrowing capacity to $200 million and extending maturity to December 2022, collateralized by 9.0 million shares of Live Nation common stock ($759 million value)[144] - Liberty, Sirius XM Holdings, Formula 1, and Braves Holdings were in compliance with their debt covenants as of March 31, 2021, with certain covenant relief periods in place for Formula 1 and Braves Holdings due to COVID-19 impacts[154] - The company is preparing for the phase-out of LIBOR, which could impact interest rates on variable-rate debt[315] Note 9: Liberty Media Acquisition Corporation (LMAC) This note describes the formation and initial public offering (IPO) of Liberty Media Acquisition Corporation (LMAC), a consolidated subsidiary of Liberty Media, detailing its IPO proceeds, ownership structure, and accounting for redeemable noncontrolling interests and warrant liabilities - LMAC, a wholly-owned subsidiary of Liberty, completed its IPO on January 26, 2021, raising $575 million, which was placed in a trust account[157] - Liberty, through its Sponsor, owns 20% of LMAC's common stock and maintains control, leading to consolidation of LMAC's financial results[161] - Redeemable noncontrolling interests, totaling $575 million at March 31, 2021, are classified as temporary equity due to conditional redemption features of LMAC's Series A common stock[162][163] - Public Warrants issued in the IPO are accounted for as a liability at fair value, totaling $35 million at March 31, 2021[163] Note 10: Commitments and Contingencies This note outlines Liberty's various commitments and contingencies, including indemnification obligations, guaranteed employment contracts, the impact of COVID-19, satellite impairment charges, restructuring costs, and ongoing legal proceedings - Liberty has indemnification obligations for past asset sales, but historically has not made significant payments[165][167] - The Atlanta Braves have guaranteed employment contracts totaling $387 million as of March 31, 2021, with $167 million payable in 2021[168] - Sirius XM Holdings recorded a $220 million impairment charge for its SXM-7 satellite due to in-orbit failures and expects to file an insurance claim for $225 million[169][170] - Sirius XM Holdings recorded a $25 million charge for restructuring costs related to surrendering office leases[176] - COVID-19 continues to impact Formula 1, the Atlanta Braves, and Live Nation, potentially reducing revenue from fan attendance and affecting cash flow[172][175] - Pandora is involved in pre-1972 sound recording litigation, with the Ninth Circuit staying appellate proceedings pending a related case against Sirius XM[178][182] - Sirius XM Holdings is participating in a Copyright Royalty Board proceeding to set webcasting rates for 2021-2025, with a final determination expected by June 14, 2021[183][184] Note 11: Information About Liberty's Operating Segments This note provides detailed financial information for Liberty's reportable segments: Sirius XM Holdings, Formula 1, and Braves Holdings, along with Live Nation as a significant equity method affiliate, disaggregating revenue and presenting Adjusted OIBDA - Liberty's reportable segments are Sirius XM Holdings and Formula 1, with Braves Holdings and corporate expenses categorized under 'Corporate and other', and Live Nation as a significant equity method affiliate[189][190][191] Revenue by Segment and Source (Three months ended March 31, 2021 vs. 2020) | Segment | Source | March 31, 2021 (millions) | March 31, 2020 (millions) | | :------------------ | :-------------------- | :------------------------ | :------------------------ | | Liberty SiriusXM | Sirius XM Holdings | $2,058 | $1,952 | | Braves Group | Baseball | $7 | $12 | | | Development | $9 | $10 | | Formula One Group | Formula 1 | $180 | $39 | | Consolidated | Total Revenue | $2,254 | $2,013 | - Live Nation's revenue was $291 million in Q1 2021, a significant decrease from $1,366 million in Q1 2020, reflecting the impact of COVID-19[193] - Deferred revenue for Formula 1 and Braves Holdings increased from $349 million to $620 million during Q1 2021, primarily due to advance cash receipts[194] Adjusted OIBDA by Segment (Three months ended March 31, 2021 vs. 2020) | Segment | March 31, 2021 (millions) | March 31, 2020 (millions) | | :------------------ | :------------------------ | :------------------------ | | Liberty SiriusXM | $677 | $632 | | Braves Group | $(22) | $(26) | | Formula One Group | $59 | $(42) | | Consolidated | $714 | $564 | - Consolidated Adjusted OIBDA increased by $150 million (26.6%) year-over-year, driven by improvements in Formula 1 ($98 million), Sirius XM Holdings ($43 million), and Braves Holdings ($5 million)[199][232] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Liberty Media Corporation's financial condition and results of operations for the three months ended March 31, 2021, covering business overview, consolidated operating results, other income and expense, material changes in financial condition, and detailed segment results Overview This overview introduces Liberty Media Corporation's core businesses, its tracking stock structure, and the ongoing impact of COVID-19 on its operations and financial performance - Liberty Media Corporation operates in media and entertainment, with key subsidiaries including Sirius XM Holdings (audio entertainment), Formula 1 (global motorsports), and Braves Holdings (Atlanta Braves baseball and development project)[212] - The company utilizes a tracking stock structure (Liberty SiriusXM, Liberty Braves, Formula One Groups) to reflect the economic performance of specific business groups, which are not separate legal entities[217] - COVID-19 continues to impact Formula 1, MLB, and Live Nation, potentially leading to reduced fan attendance, lower revenue, and adverse effects on operations and cash flow[224] - The Liberty SiriusXM Group holds interests in Sirius XM Holdings and Live Nation, with $1,030 million in cash and cash equivalents as of March 31, 2021[219] - The Formula One Group includes Formula 1 and LMAC, with $1,783 million in cash and cash equivalents as of March 31, 2021[223] Results of Operations—Consolidated This section presents a consolidated view of Liberty Media Corporation's operating results, including revenue, operating income (loss), and Adjusted OIBDA, for the three months ended March 31, 2021, compared to the prior year Consolidated Operating Results (Three months ended March 31, 2021 vs. 2020) | Metric | March 31, 2021 (millions) | March 31, 2020 (millions) | | :-------------------- | :------------------------ | :------------------------ | | Revenue | $2,254 | $2,013 | | Operating Income (Loss) | $142 | $246 | | Adjusted OIBDA | $714 | $564 | - Consolidated revenue increased by $241 million, driven by Formula 1 and Sirius XM Holdings[228] - Consolidated operating income decreased by $104 million, primarily due to a $214 million decrease in Sirius XM Holdings' operating results, partially offset by improvements in Formula 1 and Braves Holdings[229] - Consolidated Adjusted OIBDA increased by $150 million, mainly due to increases in Formula 1 ($98 million), Sirius XM Holdings ($43 million), and Braves Holdings ($5 million)[232] - Stock-based compensation expense decreased from $67 million in Q1 2020 to $63 million in Q1 2021, primarily due to a decrease at Sirius XM Holdings[231] Other Income and Expense This section details the components of Liberty Media Corporation's other income and expense, including interest expense, share of affiliate earnings (losses), and realized and unrealized gains (losses) on financial instruments, for the three months ended March 31, 2021, and 2020 Components of Other Income (Expense) (Three months ended March 31, 2021 vs. 2020) | Category | March 31, 2021 (millions) | March 31, 2020 (millions) | | :------------------------------------------ | :------------------------ | :------------------------ | | Interest expense | $(158) | $(164) | | Share of earnings (losses) of affiliates, net | $(95) | $(62) | | Realized and unrealized gains (losses) on financial instruments, net | $(49) | $1 | | Other, net | $15 | $17 | | Total Other Income (Expense) | $(287) | $(208) | - Consolidated interest expense decreased by $6 million, with a decrease in Formula One Group interest expense partially offset by an increase in Liberty SiriusXM Group interest expense due to debt reattribution[235] - Share of earnings (losses) of affiliates increased to a loss of $95 million from $62 million, primarily due to Live Nation's reattribution to Liberty SiriusXM Group and its performance[237][238] - Realized and unrealized gains (losses) on financial instruments shifted from a $1 million gain to a $49 million loss, driven by changes in fair value of debt and equity securities and bond hedges[238][239][240] - Net losses were $14 million in Q1 2021 compared to net earnings of $2 million in Q1 2020, reflecting fluctuations in revenue, expenses, and other gains/losses[245] Material Changes in Financial Condition This section discusses significant changes in Liberty Media Corporation's financial condition, focusing on cash and cash equivalents, marketable securities, available credit, and primary uses of cash across its tracking stock groups Cash and Cash Equivalents by Group (March 31, 2021) | Group | Cash and Cash Equivalents (millions) | | :------------------ | :--------------------------------- | | Liberty SiriusXM | $1,030 | | Braves Group | $181 | | Formula One Group | $1,783 | | Total | $3,039 | - Liberty had $366 million of unencumbered marketable equity securities as of March 31, 2021[247] - Liberty had $875 million available under the Sirius XM Holdings Margin Loan and $200 million available under the Live Nation Margin Loan as of March 31, 2021[250] - Formula 1's cash is not accessible by Liberty when its leverage ratio exceeds a certain threshold, which was the case as of March 31, 2021[250] - Liberty's primary use of cash in Q1 2021 was $107 million for Liberty SiriusXM common stock repurchases, funded by margin loan borrowings and Sirius XM Holdings dividends[253] - Sirius XM Holdings' primary uses of cash were stock repurchases, capital expenditures, and dividends, funded by debt borrowings and operating activities[254] - Braves Holdings' primary use of cash was capital expenditures for mixed-use development, funded by operations and debt[255] - The company believes available liquidity sources are sufficient to cover projected future cash uses[262] Results of Operations—Businesses This section provides a detailed analysis of the operating results for Liberty Media Corporation's key business segments: Sirius XM Holdings, Formula 1, and Braves Holdings Sirius XM Holdings Sirius XM Holdings operates two audio entertainment businesses: Sirius XM (satellite radio, connected vehicle services) and Pandora (streaming discovery platform), with this section detailing their Q1 2021 financial performance, including revenue, operating income, and subscriber metrics - Sirius XM Holdings operates Sirius XM (subscription satellite radio, connected vehicle services) and Pandora (ad-supported and subscription streaming)[263][264][267] - As of March 31, 2021, Sirius XM had 34.5 million subscribers, and Pandora had 6.5 million subscribers and 55.9 million monthly active users[265][267][269] Sirius XM Holdings Operating Results (Three months ended March 31, 2021 vs. 2020) | Metric | March 31, 2021 (millions) | March 31, 2020 (millions) | | :------------------------------------ | :------------------------ | :------------------------ | | Total Revenue | $2,058 | $1,952 | | Adjusted OIBDA | $682 | $639 | | Operating Income | $237 | $451 | - Total revenue increased by $106 million (5.4%) year-over-year, driven by growth in Sirius XM's self-pay subscriber base and Pandora's advertising revenue[275][276][281] - Operating income decreased by $214 million, primarily due to a $220 million impairment charge for the SXM-7 satellite and $25 million in restructuring costs for office leases[275][288] - Pandora advertising revenue increased by 29%, driven by higher sell-through and pricing, inclusion of Stitcher, and increased AdsWizz revenue[281] - Subscriber acquisition costs decreased by 13%, driven by lower hardware subsidies and OEM installations[285] Formula 1 Formula 1, a global motorsports business, saw a significant revenue increase in Q1 2021, reaching $180 million compared to $39 million in Q1 2020, primarily due to the recognition of season-based income from one event, a one-time settlement, and growth in F1 TV subscriptions - Formula 1 holds exclusive commercial rights for the World Championship, with 23 events scheduled for 2021[291][292] Formula 1 Operating Results (Three months ended March 31, 2021 vs. 2020) | Metric | March 31, 2021 (millions) | March 31, 2020 (millions) | | :-------------------- | :------------------------ | :------------------------ | | Total Revenue | $180 | $39 | | Adjusted OIBDA | $66 | $(32) | | Operating Income (Loss) | $(33) | $(137) | | Number of Events | 1 | 0 | - Primary Formula 1 revenue increased by $142 million, driven by the recognition of season-based income from one event in Q1 2021 (vs. zero in Q1 2020), a one-time settlement, and F1 TV subscription growth[295] - Cost of Formula 1 revenue increased by $41 million, primarily due to pro-rata recognition of team payments associated with the single event[299][300] - Operating loss improved by $104 million, reflecting the significant revenue increase[293] Braves Holdings Braves Holdings, which owns the Atlanta Braves and its associated development project, reported total revenue of $16 million in Q1 2021, down from $22 million in Q1 2020, primarily due to reduced capacity at spring training games and fewer special events due to COVID-19 - Braves Holdings owns the Atlanta Braves MLB Club and operates a mixed-use development project adjacent to its stadium[306] - The 2021 MLB regular season is expected to comprise approximately 160 games, with the minor league season starting in May[307] Braves Holdings Operating Results (Three months ended March 31, 2021 vs. 2020) | Metric | March 31, 2021 (millions) | March 31, 2020 (millions) | | :-------------------- | :------------------------ | :------------------------ | | Total Revenue | $16 | $22 | | Adjusted OIBDA | $(20) | $(25) | | Operating Income (Loss) | $(37) | $(43) | - Total revenue decreased by $6 million, primarily due to reduced capacity at spring training games and fewer special events due to COVID-19[309] - Operating expenses decreased by $9 million, driven by reduced spring training capacity, lower personnel costs, and reduced scouting and minor league expenses[310] - Operating loss improved by $6 million, reflecting the reduction in operating expenses and other cost reduction initiatives[308][311] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section discusses Liberty's exposure to market risks, primarily from changes in interest rates and stock prices, and outlines how the company manages these risks through debt composition, interest rate swaps, and monitoring public security holdings - Liberty is exposed to market risk from changes in interest rates and stock prices[314] Debt Composition by Interest Rate Type (March 31, 2021) | Group | Variable Rate Debt (Principal, millions) | Weighted Avg Interest Rate (Variable) | Fixed Rate Debt (Principal, millions) | Weighted Avg Interest Rate (Fixed) | | :------------------ | :------------------------------------- | :------------------------------------ | :------------------------------------ | :--------------------------------- | | Liberty SiriusXM | $1,898 | 1.9% | $11,252 | 3.8% | | Braves Group | $259 | 1.7% | $417 | 3.4% | | Formula One Group | $832 | 3.5% | $2,794 | 4.6% | - The phase-out of LIBOR is expected to impact variable-rate debt, and Liberty plans to incorporate alternative reference rates in debt agreements[315] - As of March 31, 2021, marketable equity securities had a fair value of $366 million, where a 10% decrease in market price would reduce their value by approximately $37 million[318] - Liberty's investment in Live Nation, an equity method affiliate, is also subject to market risk; a 10% decrease in its market price would reduce its aggregate value by $590 million[318] Item 4. Controls and Procedures Liberty Media Corporation's management, including its chief executive officer and principal accounting and financial officer, evaluated the effectiveness of its disclosure controls and procedures as of March 31, 2021, concluding they were effective, with no material changes to internal control over financial reporting during the quarter - The Company's disclosure controls and procedures were effective as of March 31, 2021, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[319] - No material changes occurred in the Company's internal control over financial reporting during the three months ended March 31, 2021[320] Part II — Other Information Item 1. Legal Proceedings This section refers to Note 10 of the condensed consolidated financial statements for updates on legal proceedings, which include pre-1972 sound recording litigation against Pandora and a Copyright Royalty Board proceeding - Legal proceedings information is detailed in Note 10 of the financial statements[322] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section outlines Liberty Media Corporation's share repurchase programs, detailing the number of shares repurchased and the remaining authorization under the programs during the three months ended March 31, 2021 - Liberty's board of directors authorized $2 billion in total for common stock repurchases across its tracking stock series[323] Share Repurchase Activity (Three months ended March 31, 2021) | Class | Total Number of Shares Purchased | | :-------------------------- | :------------------------------- | | Series A Liberty SiriusXM | 566,886 | | Series C Liberty SiriusXM | 1,900,336 | | Total | 2,467,222 | - As of March 31, 2021, approximately $944 million remained available for repurchases under the authorized programs[324] - No repurchases of Liberty Braves or Liberty Formula One common stock occurred during the period[324] Item 6. Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications, unaudited attributed financial information for tracking stock groups, and various XBRL taxonomy documents - Key exhibits include Rule 13a-14(a)/15d-14(a) Certifications, Section 1350 Certification, and Unaudited Attributed Financial Information for Tracking Stock Groups[330] - XBRL (eXtensible Business Reporting Language) documents are included for interactive data filing[330]