Liberty(LSXMK) - 2021 Q2 - Quarterly Report

Part I – Financial Information Item 1. Financial Statements The unaudited condensed consolidated financial statements and notes detail the company's financial position and performance Condensed Consolidated Financial Statements Financials show significant revenue growth and a return to profitability driven by the recovery of key business segments Condensed Consolidated Balance Sheet Data (Unaudited) | Account | June 30, 2021 (in millions) | December 31, 2020 (in millions) | | :--- | :--- | :--- | | Total Current Assets | $5,361 | $4,030 | | Total Assets | $45,654 | $44,004 | | Total Current Liabilities | $5,440 | $4,490 | | Total Liabilities | $26,071 | $24,403 | | Total Equity | $19,008 | $19,601 | Condensed Consolidated Statement of Operations Data (Unaudited) | Metric | Three Months Ended June 30, 2021 (in millions) | Three Months Ended June 30, 2020 (in millions) | Six Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2020 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $2,876 | $1,909 | $5,130 | $3,922 | | Operating Income (Loss) | $622 | $214 | $764 | $460 | | Net Earnings (Loss) | $528 | $(262) | $514 | $(260) | | Net Earnings (Loss) Attributable to Liberty Stockholders | $417 | $(326) | $301 | $(402) | Condensed Consolidated Statement of Cash Flows Data (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2021 (in millions) | Six Months Ended June 30, 2020 (in millions) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $1,235 | $869 | | Net Cash Used by Investing Activities | $(754) | $(203) | | Net Cash Provided by Financing Activities | $650 | $2,069 | | Net Increase in Cash | $1,129 | $2,725 | Notes to Condensed Consolidated Financial Statements Notes detail the basis of presentation, COVID-19 impacts, tracking stock structure, and significant corporate events - The company is primarily engaged in the media and entertainment industries, with significant subsidiaries including Sirius XM Holdings, Formula 1, and Braves Holdings[43] - The COVID-19 pandemic significantly impacted operations, delaying the 2020 Formula 1 and MLB seasons and causing Live Nation to suspend large-scale events[46][58] - The company's capital structure consists of three tracking stocks: Liberty SiriusXM Group, Braves Group, and Formula One Group[59] - Sirius XM Holdings' SXM-7 satellite was declared a total loss, resulting in a $220 million impairment charge, with insurance claims filed for $225 million and $140 million in recoveries recorded[176][177] - In January 2021, the company's subsidiary, Liberty Media Acquisition Corporation (LMAC), consummated a $575 million IPO, with the company owning 20% of LMAC[165][166][169] Future Amortization Expense for Intangible Assets (as of June 30, 2021) | Year | Expected Amortization Expense (in millions) | | :--- | :--- | | Remainder of 2021 | $500 | | 2022 | $703 | | 2023 | $530 | | 2024 | $411 | | 2025 | $357 | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses a significant financial recovery driven by improved performance across all business segments Results of Operations—Consolidated Consolidated revenue and operating income increased significantly, driven by strong performance across all segments Consolidated Revenue by Segment (in millions) | Segment | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Liberty SiriusXM Group | $2,159 | $1,874 | | Braves Group | $216 | $11 | | Formula One Group | $501 | $24 | | Consolidated Liberty | $2,876 | $1,909 | Consolidated Adjusted OIBDA by Segment (in millions) | Segment | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Liberty SiriusXM Group | $697 | $603 | | Braves Group | $53 | $(28) | | Formula One Group | $63 | $(26) | | Consolidated Liberty | $813 | $549 | Material Changes in Financial Condition The company maintains sufficient liquidity through cash reserves and operating cash flow to fund its obligations Cash and Cash Equivalents by Group (as of June 30, 2021) | Group | Cash and Cash Equivalents (in millions) | | :--- | :--- | | Liberty SiriusXM Group | $1,542 | | Braves Group | $168 | | Formula One Group | $2,225 | Cash Flow by Activity (Six Months Ended June 30, 2021) | Cash Flow Activity | Amount (in millions) | | :--- | :--- | | Net Cash Provided by Operating Activities | $1,235 | | Net Cash Used by Investing Activities | $(754) | | Net Cash Provided by Financing Activities | $650 | - Primary uses of cash during the first six months of 2021 included $243 million for Liberty SiriusXM stock repurchases and $190 million for debt repayments[264] Results of Operations—Businesses Individual business segments, including Sirius XM, Formula 1, and Braves, all reported strong revenue growth Sirius XM Holdings Operating Results (in millions) | Metric | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Total Revenue | $2,159 | $1,874 | | Adjusted OIBDA | $699 | $615 | | Operating Income | $640 | $398 | - Sirius XM business had approximately 34.5 million subscribers as of June 30, 2021, while Pandora had 6.6 million subscribers and 55.1 million monthly active users[275][277][278] Formula 1 Operating Results (in millions) | Metric | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Total Revenue | $501 | $24 | | Adjusted OIBDA | $66 | $(16) | | Operating Income (Loss) | $(36) | $(122) | | Number of Events | 7 | 0 | Braves Holdings Operating Results (in millions) | Metric | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Total Revenue | $216 | $11 | | Adjusted OIBDA | $54 | $(26) | | Operating Income (Loss) | $32 | $(30) | | Home Games | 42 | 0 | Quantitative and Qualitative Disclosures about Market Risk The company is exposed to market risks from interest rate fluctuations and stock price volatility in its investments - The company is exposed to interest rate risk on its variable rate debt benchmarked to LIBOR and is preparing for its replacement by alternative rates like SOFR[326] - The company is exposed to stock price risk from its portfolio of marketable equity securities, valued at $413 million as of June 30, 2021[328] - A hypothetical 10% decline in Live Nation's stock price would have lowered its value by $610 million, though this is not directly reflected in the statement of operations[328] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management, including the CEO and principal financial officer, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2021[330] - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[331] Part II — Other Information Legal Proceedings The report refers to Note 10 for updates on legal proceedings, including litigation involving Pandora - For information regarding changes in legal proceedings, the report directs readers to Note 10 in the financial statements[332] Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased Series A and Series C Liberty SiriusXM common stock during the quarter Share Repurchase Activity (Q2 2021) | Stock | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Series A Liberty SiriusXM | 1,391,148 | - | | Series C Liberty SiriusXM | 1,671,938 | - | | Total | 3,063,086 | - | - As of June 30, 2021, approximately $808 million remained available for future repurchases under the company's publicly announced plan[334] Exhibits This section lists all exhibits filed with the report, including certifications and supplemental financial data - Key exhibits filed include CEO/CFO certifications, unaudited attributed financial information for the tracking stock groups (Exhibit 99.1), and various XBRL data files for interactive data[338] Signatures Signatures The report is duly signed and authorized by the company's principal executive and financial officers - The Form 10-Q was signed on August 6, 2021, by Gregory B. Maffei, President and Chief Executive Officer, and Brian J. Wendling, Chief Accounting Officer and Principal Financial Officer[341]