Liberty Media Corp
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
FWONK$106.33-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001558370-24-011656
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001558370-24-015213
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 76 current paragraphs.
24 unchanged; 38 reworded; 8 added; 36 removed; 6 previous and 6 current paragraphs rearranged.
Tables are not compared: 68 previous and 46 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
On January 2, 2024, the Company purchased QuintEvents, LLC (“QuintEvents”) for total consideration of approximately $277 million, comprised of $205 million of cash, net of cash acquired of $66 million, and a $6 million settlement of a pre-existing condition.
Current report
Operating income (loss). Our consolidated operating income increased $6 million for the three months ended September 30, 2024, as compared to the corresponding period in the prior year, primarily driven by a $14 million increase
Current report
Acquisition costs.* *The Company recorded $3 million and $23 million of costs related to corporate acquisitions during the three and nine months ended September 30, 2024, respectively.
Current report
Consolidated Adjusted OIBDA increased $9 million and $117 million for the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to increases in Formula 1 Adjusted OIBDA, partially offset by the Atlanta Braves Holdings Split-Off in 2023. See “Results of Operations—Businesses” below for a more complete discussion of Formula 1’s results of operations.
Current report
Unrealized gains (losses) on intergroup interests. Unrealized gains (losses) on intergroup interests are driven by changes in the fair value of notional shares representing the intergroup interests. The intergroup interests were settled and extinguished during the nine months ended September 30, 2023.
Current report
Other, net. Other, net income increased $48 million and $64 million for the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year due to decreases in losses on early extinguishment of debt, increases in foreign exchange gains and increases in interest and dividend income. The increase
Current report
During the three months ended September 30, 2024, seven Events took place, compared to eight Events in the corresponding period in the prior year. During the nine months ended September 30, 2024, 18 Events took place, compared to 16 Events in the corresponding period in the prior year.
Current report
Cost of Formula 1 revenue decreased $54 million and increased $152 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year.
Removed paragraphs (36)
Previous report
We own controlling and non-controlling interests in a broad range of media and entertainment companies. Our most significant operating subsidiary, which is a reportable segment, is Sirius XM Holdings. Sirius XM Holdings operates two complementary audio entertainment businesses, SiriusXM and Pandora and Off-platform. SiriusXM features music, sports, entertainment, comedy, talk, news, traffic and weather channels and other content, as well as podcasts and infotainment services, in the U.S. on a subscription fee basis. SiriusXM’s packages include live, curated and certain exclusive and on demand programming. SiriusXM is distributed through its two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment. SiriusXM also provides connected vehicle services and a suite of in-vehicle data services. The Pandora and Off-platform business operates a music, comedy and podcast streaming platform. Pandora is available as an ad-supported radio service, a radio subscription service (Pandora Plus), and an on-demand subscription service (Pandora Premium). Through Sirius XM Holdings, we have ownership interests in certain clean energy investments, Sirius XM Canada Holdings, Inc. (“Sirius XM Canada”) and SoundCloud Holdings, LLC (“SoundCloud”), which we account for as equity method investments.
Previous report
Sirius XM Holdings is the only operating subsidiary attributed to the Liberty SiriusXM Group. In the event Sirius XM Holdings were to become insolvent or file for bankruptcy, Liberty’s management would evaluate the circumstances at such time and take appropriate steps in the best interest of all of its stockholders, which may not be in the best interest of a particular group or groups when considered independently. In such a situation, Liberty’s management and its board of directors would have several approaches at their disposal, including, but not limited to, the conversion of the Liberty SiriusXM common stock into another tracking stock of Liberty, the reattribution of assets and liabilities among Liberty’s tracking stock groups or the restructuring of Liberty’s tracking stocks to either create a new tracking stock structure or eliminate it altogether. However, Liberty is currently subject to certain contractual restrictions while the proposed Transactions are pending and may not be able to take some or all of these approaches.
Previous report
On December 11, 2023, Liberty entered into definitive agreements, subject to the terms thereof, to redeem each outstanding share of its Liberty SiriusXM common stock in exchange for a number of shares of common stock of a newly formed entity (the “Liberty Sirius XM Holdings Split-Off”), Liberty Sirius XM Holdings Inc. (“Liberty Sirius XM Holdings”) equal to the Exchange Ratio (as defined in the Reorganization Agreement, dated as of December 11, 2023, and
Previous report
Stock-based compensation. Stock-based compensation includes compensation related to (1) options and stock appreciation rights for shares of our common stock that are granted to certain of our officers and employees, (2) options, restricted stock awards, restricted stock units and other stock-based awards granted to officers, employees and certain third parties of our subsidiaries, Sirius XM Holdings, Formula 1 and Braves Holdings, (3) phantom stock appreciation rights granted to officers and employees of our subsidiary, Braves Holdings, pursuant to private equity plans and (4) amortization of restricted stock and performance-based restricted stock unit grants.
Previous report
Impairment, restructuring and acquisition costs.* *Sirius XM Holdings recorded impairment, restructuring and acquisition costs of $4 million and $18 million during the three months ended June 30, 2024 and 2023, respectively, and $17 million and $50 million during the six months ended June 30, 2024 and 2023, respectively. See “Results of Operations—Businesses” below for a more complete discussion of Sirius XM Holdings’ impairment, restructuring and acquisition costs. In addition, the Company recorded $11 million and $20 million of costs related to corporate acquisitions during the three and six months ended June 30, 2024, respectively.
Previous report
Consolidated Adjusted OIBDA decreased $34 million and increased $104 million for the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year. The decrease in Adjusted OIBDA for the three months ended June 30, 2024 was primarily due to the Split-Off of Braves Holdings in 2023 and a decrease in Sirius XM Holdings Adjusted OIBDA, partially offset by QuintEvents Adjusted OIBDA, which was acquired in January 2024, and an increase in Formula 1 Adjusted OIBDA. The increase in Adjusted OIBDA for the six months ended June 30, 2024 was primarily driven by an increase in Formula 1 Adjusted OIBDA and QuintEvents Adjusted OIBDA, partially offset by the Split-Off of Braves Holdings in 2023 and a decrease in Sirius XM Holdings Adjusted OIBDA. See “Results of Operations—Businesses” below for a more complete discussion of the results of operations of Sirius XM Holdings and Formula 1.
Previous report
Contemporaneously with the issuance of $1 billion of cash convertible notes, Liberty entered into bond hedges which were expected to offset potential cash payments Liberty would be required to make in excess of the principal amount of the convertible notes. These derivatives were marked to fair value on a recurring basis. The bond hedges expired on October 15, 2023.
Previous report
Sirius XM Holdings’ primary uses of cash were debt repayments, additions to property and equipment and dividends paid to stockholders. Sirius XM Holdings’ uses of cash were funded by cash provided by operating activities and borrowings of debt. During the six months ended June 30, 2024, Sirius XM Holdings declared quarterly dividends and paid in cash an aggregate amount of $205 million, of which Liberty received $171 million. On July 24, 2024, Sirius XM Holdings’ board of directors declared a quarterly dividend on its common stock in the amount of $0.0266 per share of common stock payable on August 26, 2024 to stockholders of record as of the close of business on August 9, 2024.
Previous report
Sirius XM Holdings’ uses of cash are expected to be capital expenditures, including the construction of replacement satellites, working capital requirements, interest payments, taxes and scheduled maturities of outstanding debt. In addition, Sirius XM Holdings’ board of directors expects to declare regular quarterly dividends. Liberty expects Sirius XM Holdings to fund its projected uses of cash with cash provided by operations, cash on hand and borrowings under its existing credit facility.
Previous report
Sirius XM Holdings. Sirius XM Holdings operates two complementary audio entertainment businesses, SiriusXM and Pandora and Off-platform.
Previous report
SiriusXM features music, sports, entertainment, comedy, talk, news, traffic and weather channels and other content, as well as podcasts and infotainment services, in the U.S. on a subscription fee basis. SiriusXM’s packages include live, curated and certain exclusive and on demand programming. The SiriusXM service is distributed through its two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment. Satellite radios are primarily distributed through automakers, retailers and SiriusXM’s website. The SiriusXM service is also available through its in-car user interface, called “360L,” which combines SiriusXM’s satellite and streaming services into a single, cohesive in-vehicle entertainment experience.
Previous report
The primary source of revenue for the SiriusXM business is subscription fees, with most of its customers subscribing to monthly or annual plans. SiriusXM also derives revenue from advertising on select non-music channels, which is sold under the SiriusXM Media brand, direct sales of its satellite radios and accessories, and other ancillary services. As of June 30, 2024, the SiriusXM business had approximately 33.3 million subscribers.
Previous report
In addition to its audio entertainment businesses, SiriusXM provides connected vehicle services to several automakers. These services are designed to enhance the safety, security and driving experience of consumers. SiriusXM also offers a suite of data services that includes graphical weather and fuel prices, a traffic information service and real-time weather services in boats and airplanes. The SiriusXM business also holds a 70% equity interest and 33% voting interest in Sirius XM Canada.
Previous report
The Pandora and Off-platform business operates a music, comedy and podcast streaming discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through mobile devices, vehicle speakers or connected devices. Pandora enables listeners to create personalized stations and playlists, discover new content, hear artist- and expert-curated playlists and podcasts as well as search and play songs and albums on-demand. Pandora is available as an ad-supported radio service, a radio subscription service (Pandora Plus), and an on-demand subscription service (Pandora Premium). As of June 30, 2024, Pandora had approximately 45.1 million monthly active users and 6.0 million subscribers.
Previous report
The majority of revenue from Pandora is generated from advertising on its ad-supported radio service which is sold under the SiriusXM Media brand. Pandora also derives subscription revenue from its Pandora Plus and Pandora Premium subscribers. Pandora also sells advertising on other audio platforms and in widely distributed podcasts, which are considered to be off-platform services. Pandora has an arrangement with SoundCloud to be its exclusive ad sales representative in the U.S. and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms. Pandora also has arrangements to serve as the ad sales representative for certain podcasts. In addition, through AdsWizz Inc., Pandora provides a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.
Previous report
Sirius XM Holdings is a separate publicly traded company and additional information about Sirius XM Holdings can be obtained through its website and public filings, which are not incorporated by reference herein.
Previous report
Results of Operations
Previous report
Liberty acquired a controlling interest in Sirius XM Holdings on January 18, 2013 and applied acquisition accounting and consolidated the results of Sirius XM Holdings from that date. The results presented below include the impacts of accounting adjustments for Liberty’s acquisition of Sirius XM Holdings in the current and prior periods. As of June 30, 2024, there is an approximate 17% noncontrolling interest in Sirius XM Holdings, and the net earnings (loss) of Sirius XM
Previous report
Holdings attributable to such noncontrolling interest is eliminated through the noncontrolling interest line item in the accompanying condensed consolidated statement of operations.
Previous report
A tax sharing agreement with Sirius XM Holdings, dated February 1, 2021, governs the allocation of consolidated and combined tax liabilities and sets forth agreements with respect to tax matters. In November 2021, Liberty and Sirius XM Holdings became members of the same consolidated tax group and Sirius XM Holdings entered into (i) an agreement with Liberty whereby Liberty agreed not to effect any merger with Sirius XM Holdings pursuant to Section 253 of the General Corporation Law of the State of Delaware (or any successor to such statute) without obtaining the prior approval ofa special committee of the Sirius XM Holdings board of directors, all of whom are independent of Liberty (the “Special Committee”) (or any successor special committee of Sirius XM Holdings’ independent and disinterested directors) and (ii) an agreement regarding certain tax matters relating to the exchange. Each of these agreements wasnegotiated by the Special Committee with Liberty.
Previous report
SiriusXM Subscriber revenueincludes self-pay and paid promotional subscriptions, U.S. Music Royalty Fees and other ancillary fees. Subscriber revenue decreased 5% and 3% during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily driven by a reduction in self-pay revenue resulting from a decline in average subscribers as well as lower self-pay average monthly revenue per subscriber, driven by an increase in subscribers on promotional and streaming-only self-pay subscription plans, and a reduction in paid promotional revenue.
Previous report
SiriusXM Advertising revenueincludes the sale of advertising on SiriusXM’s non-music channels. Advertising revenue decreased 2% for both the three and six months ended June 30, 2024, as compared to the corresponding periods in the prior year, primarily due to lower revenue from entertainment channels, partially offset by higher revenue earned on sports and comedy channels.
Previous report
SiriusXM Equipment revenue includes revenue and royalties from the sale of satellite radios, components and accessories. Equipment revenue was flat and increased 4% for the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year. The increase for the six months ended June 30, 2024 was driven by increased chipset production.
Previous report
SiriusXM Other revenueincludes service and advisory revenue from Sirius XM Canada, connected vehicle services, and ancillary revenue. Other revenue decreased 9% and 8% for the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, driven by lower royalty revenue from Sirius XM Canada.
Previous report
Pandora and Off-platform subscriber revenue includes fees charged for Pandora Plus and Pandora Premium. Pandora and Off-platform subscriber revenue increased 7% and 5% during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily driven by rate increases on Pandora subscription plans, partially offset by a decline in the subscriber base.
Previous report
Pandora and Off-platform advertising revenue is generated primarily from audio, display and video advertising from on-platform and off-platform advertising. Pandora and Off-platform advertising revenue was flat and increased 4% during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily driven by higher podcasting revenue and tech fees as well as higher sell-through on the Pandora ad-supported service.
Previous report
SiriusXM Cost of services includes revenue share and royalties, programming and content costs, customer service and billing expenses and other ancillary costs associated with providing the satellite radio service.
Previous report
Pandora and Off-platform Cost of services includes revenue share and royalties, programming and content costs, customer service and billing expenses and other ancillary costs. Pandora and Off-platform costs of services decreased 5% and 2% for the three and six months ended June 30, 2024, as compared to the corresponding periods in the prior year.
Previous report
Subscriber acquisition costs are costs only associated with SiriusXM’s satellite radio and include hardware subsidies paid to radio manufacturers, distributors and automakers; subsidies paid for chipsets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets; product warranty obligations; and freight. The majority of subscriber acquisition costs are incurred and expensed in advance of acquiring a subscriber. Subscriber acquisition costs do not include advertising costs, marketing, loyalty payments to distributors and dealers of satellite radios or revenue share payments to automakers and retailers of satellite radios. For both the three and six months ended June 30, 2024, subscriber acquisition costs decreased 1%, as compared to the corresponding periods in the prior year, due to lower hardware subsidies driven by installations as well as lower commission and hardware subsidy rates.
Previous report
Selling, general and administrative expensesincludes costs of marketing, advertising, media and production, including promotional events and sponsorships; cooperative and artist marketing; personnel costs; facilities costs, finance, legal, human resources and information technology costs. For both the three and six months ended June 30, 2024, selling, general and administrative expense decreased 2%, as compared to the corresponding periods in the prior year, primarily due lower personnel-related costs, partially offset by costs related to the Liberty Sirius XM Holdings Split-Off incurred during the three and six months ended June 30, 2024 and an increase in brand and content marketing.
Previous report
Other operating expenses include engineering, design and development costs consisting primarily of compensation and related costs to develop chipsets and new products and services, including streaming and connected vehicle services, research and development for broadcast information systems and costs associated with the incorporation of SiriusXM’s radios into new vehicles manufactured by automakers. For the three and six months ended June 30, 2024, other operating expenses decreased 17% and 4%, respectively, as compared to the corresponding periods in the prior year, driven by higher capitalized personnel-related costs, partially offset by higher personnel-related and cloud hosting costs.
Previous report
Impairment, restructuring and acquisition costsinclude impairment charges associated with the carrying amount of an asset exceeding the asset’s fair value, restructuring expenses associated with the abandonment of certain leased office spaces, employee severance charges associated with organizational changes and acquisition costs. During the three months ended June 30, 2024, Sirius XM Holdings recorded $3 million associated with severance and other employee costs and $1 million of impairments, primarily related to vacated office space. During the six months ended June 30, 2024, Sirius XM Holdings recorded $15 million associated with severance and other employee costs and $2 million of impairments, primarily related to terminated software projects and vacated office space. During the three months ended June 30, 2023, Sirius XM Holdings recorded impairments primarily related to terminated software projects of $10 million, restructuring costs of $5 million and a cost-method investment impairment of $2 million. During the six months ended June 30, 2023,
Previous report
Sirius XM Holdings recorded $23 million associated with severance and other related costs, impairments primarily related to terminated software projects of $13 million, vacated office space impairments of $7 million, restructuring costs of $5 million and a cost-method investment impairment of $2 million.
Previous report
Stock-based compensation increased 10% and 5% during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, driven by the cancellation of options during the prior year periods primarily due to a reduction in Sirius XM Holdings’ workforce.
Previous report
Depreciation and amortization expense increased 1% and decreased 1% for the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year. The increase for the three months ended June 30, 2024 was primarily due to the write-down of certain property and equipment recorded in the acquisition of Sirius XM Holdings by Liberty and an increase in capitalized software and hardware, partially offset by certain intangible assets that reached the end of their useful lives. The decrease for the six months ended June 30, 2024 was primarily due to the retirement of a satellite during the six months ended June 30, 2023 and certain assets that reached the end of their useful lives, partially offset by the write-down of certain property and equipment recorded in the acquisition of Sirius XM Holdings by Liberty and an increase in capitalized software and hardware.
Previous report
Cost of Formula 1 revenue increased $126 million and $206 million during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year.
Reworded paragraphs (38)
Previous wording
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regardingour projected sources and uses of cash; the payment of dividends by Sirius XM Holdings Inc. (“Sirius XM Holdings”); fluctuations in interest rates and stock prices; the proposed Transactions (as defined below); the anticipated non-material impact of certain contingent liabilities related to legal and tax proceedings; and other matters arising in the ordinary course of business. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors (as they relate to our consolidated subsidiaries and equity affiliates) that could cause actual results or events to differ materially from those anticipated:
Current wording
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regardingour projected sources and uses of cash; fluctuations in interest rates and stock prices; the anticipated non-material impact of certain contingent liabilities related to legal and tax proceedings; and other matters arising in the ordinary course of business. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors (as they relate to our consolidated subsidiaries and equity affiliates) that could cause actual results or events to differ materially from those anticipated:
Previous wording
For additional risk factors, please see Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023. Any forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Quarterly Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.
Current wording
For additional risk factors, please see Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q and Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023. Any forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Quarterly Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.
Previous wording
Formula 1 is a wholly-owned consolidated subsidiary and is also a reportable segment. Formula 1 is a global motorsports business that holds exclusive commercial rights with respect to the World Championship, an annual, approximately nine-month long, motor race-based competition in which teams compete for the Constructors' Championship and drivers compete for the Drivers' Championship. The World Championship takes place on various circuits with a varying number of events (“Events”) taking place in different countries around the world each season. Formula 1 is responsible for the commercial exploitation and development of the World Championship as well as various aspects of its management and administration.
Current wording
We own controlling and non-controlling interests in a broad range of media and entertainment companies. Formula 1, our most significant operating subsidiary, is a wholly-owned consolidated subsidiary and is also a reportable segment. Formula 1 is a global motorsports business that holds exclusive commercial rights with respect to the World Championship, an annual, approximately nine-month long, motor race-based competition in which teams compete for the Constructors' Championship and drivers compete for the Drivers' Championship. The World Championship takes place on various circuits with a varying number of events (“Events”) taking place in different countries around the world each season. Formula 1 is responsible for the commercial exploitation and development of the World Championship as well as various aspects of its management and administration.
Previous wording
Our "Corporate and Other" category includes our consolidated subsidiary QuintEvents, LLC (“QuintEvents”), corporate expenses and investments and related financial instruments in public companies, which are accounted for at their respective fair market values. Braves Holdings, LLC ("Braves Holdings"), a consolidated subsidiary, was included in “Corporate and Other” prior to the Split-Off (defined below).
Current wording
Our "Corporate and Other" category includes our consolidated subsidiary QuintEvents, LLC (“QuintEvents”), corporate expenses and investments and related financial instruments in public companies, which are accounted for at their
Previous wording
On July 18, 2023, the Company completed the split-off (the “Split-Off”) of its wholly owned subsidiary, Atlanta Braves Holdings, Inc. (“Atlanta Braves Holdings”). The Split-Off was accomplished by a redemption by the Company of each outstanding share of Liberty Braves common stock in exchange for one share of the corresponding series of Atlanta Braves Holdings common stock. Atlanta Braves Holdings is comprised of the businesses, assets and liabilities attributed to the Liberty Braves Group (the “Braves Group”) immediately prior to the Split-Off, except for the intergroup interests in the Braves Group attributed to the Liberty SiriusXM Group and Formula One Group, which were settled and extinguished in connection with the Split-Off.
Current wording
On July 18, 2023, the Company completed the split-off (the “Atlanta Braves Holdings Split-Off”) of its wholly owned subsidiary, Atlanta Braves Holdings, Inc. (“Atlanta Braves Holdings”). The Atlanta Braves Holdings Split-Off was accomplished by a redemption by the Company of each outstanding share of Liberty Braves common stock in exchange for one share of the corresponding series of Atlanta Braves Holdings common stock. Atlanta Braves Holdings is comprised of the businesses, assets and liabilities attributed to the Liberty Braves Group (the “Braves Group”) immediately prior to the Atlanta Braves Holdings Split-Off, except for the intergroup interests in the Braves Group attributed to the Liberty SiriusXM Group and Formula One Group, which were settled and extinguished in connection with the Atlanta Braves Holdings Split-Off.
Previous wording
“Reclassification”). As a result of the Reclassification, each then-outstanding share of Liberty SiriusXM common stock was reclassified into one share of the corresponding series of new Liberty SiriusXM common stock and 0.2500 of a share of the corresponding series of Liberty Live common stock and each outstanding share of Liberty Formula One common stock was reclassified into one share of the corresponding series of new Liberty Formula One common stock and 0.0428 of a share of the corresponding series of Liberty Live common stock.
Current wording
On August 3, 2023, the Company reclassified its then-outstanding shares of common stock into three new tracking stocks—Liberty SiriusXM common stock, Liberty Formula One common stock and Liberty Live common stock, and, in connection therewith, provided for the attribution of the businesses, assets and liabilities of the Company’s remaining tracking stock groups among its newly created Liberty SiriusXM Group, Formula One Group and Liberty Live Group (the “Reclassification”). As a result of the Reclassification, each then-outstanding share of Liberty SiriusXM common stock was reclassified into one share of the corresponding series of new Liberty SiriusXM common stock and 0.2500 of a share of the corresponding series of Liberty Live common stock and each outstanding share of Liberty Formula One common stock was reclassified into one share of the corresponding series of new Liberty Formula One common stock and 0.0428 of a share of the corresponding series of Liberty Live common stock.
Previous wording
Each of the Split-Off and the Reclassification were intended to be tax-free to stockholders of the Company, except with respect to the receipt of cash in lieu of fractional shares. In July 2024, the IRS completed its review of the Reclassification and notified the Company that it agreed with the nontaxable characterization of the transaction. The Split-Off and the Reclassification are reflected in the Company’s consolidated financial statements on a prospective basis.
Current wording
Each of the Atlanta Braves Holdings Split-Off and the Reclassification were intended to be tax-free to stockholders of the Company, except with respect to the receipt of cash in lieu of fractional shares. In July 2024, the IRS completed its review of the Reclassification and notified the Company that it agreed with the nontaxable characterization of the transaction. In September 2024, the IRS completed its review of the Atlanta Braves Holdings Split-Off and notified the Company that it agreed with the nontaxable characterization of the transaction. The Atlanta Braves Holdings Split-Off and the Reclassification are reflected in the Company’s consolidated financial statements on a prospective basis.
Previous wording
as amended by the First Amendment to the Reorganization Agreement, dated as of June 16, 2024, in each case, by and among Liberty, Liberty Sirius XM Holdings and Sirius XM Holdings (as may be amended from time to time, the “Reorganization Agreement”)). The Exchange Ratio will be calculated prior to the effective time of the redemption and is estimated to be approximately 0.83 of a share of Liberty Sirius XM Holdings common stock. Liberty Sirius XM Holdings will be comprised of the businesses, assets and liabilities attributed to the Liberty SiriusXM Group. The Liberty Sirius XM Holdings Split-Off is intended to be tax-free to holders of Liberty SiriusXM common stock (except with respect to cash received in lieu of fractional shares) and the completion of the Liberty Sirius XM Holdings Split-Off will be subject to various conditions, including the receipt of opinions of tax counsel. On December 11, 2023, Liberty also entered into an Agreement and Plan of Merger (as amended by the First Amendment to the Agreement and Plan of Merger, dated as of June 16, 2024), pursuant to which Radio Merger Sub, LLC, a wholly owned subsidiary of Liberty Sirius XM Holdings, will merge with and into Sirius XM Holdings, with Sirius XM Holdings surviving the merger as a wholly owned subsidiary of Liberty Sirius XM Holdings (the “Merger” and, together with the Liberty Sirius XM Holdings Split-Off, the “Transactions”), subject to the satisfaction of certain conditions. The Merger is dependent and conditioned on the approval and completion of the Liberty Sirius XM Holdings Split-Off, and the Merger will not be completed unless the Liberty Sirius XM Holdings Split-Off is completed. If the Liberty Sirius XM Holdings Split-Off is completed, the Merger will also be completed. Subject to the satisfaction of various conditions, the Company expects to complete the proposed Transactions on September 9, 2024.
Current wording
On September 9, 2024, Liberty completed the split-off (the “Liberty Sirius XM Holdings Split-Off”) of its wholly owned subsidiary, Liberty Sirius XM Holdings Inc. (“Liberty Sirius XM Holdings”). The Liberty Sirius XM Holdings Split-Off was accomplished through the redemption by the Company of each outstanding share of Liberty SiriusXM common stock in exchange for 0.8375 of a share of Liberty Sirius XM Holdings common stock, with cash paid in lieu of fractional shares. Liberty Sirius XM Holdings is comprised of the businesses, assets and liabilities attributed to the Liberty SiriusXM Group immediately prior to the Liberty Sirius XM Holdings Split-Off. The Liberty Sirius XM Holdings Split-Off was intended to be tax-free to holders of Liberty SiriusXM common stock (except with respect to cash received in lieu of fractional shares).
Previous wording
While the Liberty SiriusXM Group, the Formula One Group and the Liberty Live Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Holders of tracking stock have no direct claim to the group's stock or assets and therefore, do not own, by virtue of their ownership of a Liberty tracking stock, any equity or voting interest in a public company, such as Sirius XM Holdings, in which Liberty holds an interest that is attributed to a Liberty tracking stock group, the Liberty SiriusXM Group. Holders of tracking stock are also not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation.
Current wording
by virtue of their ownership of a Liberty tracking stock, any equity or voting interest in a public company, such as Live Nation, in which Liberty holds an interest that is attributed to a Liberty tracking stock group, the Liberty Live Group. Holders of tracking stock are also not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation.
Previous wording
As of June 30, 2024, the Formula One Group is primarily comprised of Liberty’s interests in Formula 1 and QuintEvents, cash and Liberty’s 2.25% Convertible Senior Notes due 2027. The Formula One Group had cash and cash equivalents of approximately $1,491 million as of June 30, 2024, which included $1,303 million of subsidiary cash.
Current wording
As of September 30, 2024, the Formula One Group is primarily comprised of Liberty’s interests in Formula 1 and QuintEvents, cash and Liberty’s 2.25% Convertible Senior Notes due 2027. The Formula One Group had cash and cash equivalents of approximately $2,666 million as of September 30, 2024, which included $1,449 million of subsidiary cash.
Previous wording
As of June 30, 2024, the Liberty Live Group is primarily comprised of Liberty’s interest in Live Nation, cash, certain public and private assets, Liberty’s 0.5% Exchangeable Senior Debentures due 2050, Liberty’s 2.375% Exchangeable Senior Debentures due 2053 and a margin loan obligation incurred by a wholly-owned special purpose subsidiary of Liberty.
Current wording
As of September 30, 2024, the Liberty Live Group is primarily comprised of Liberty’s interest in Live Nation, cash, other minority investments, Liberty’s 0.5% Exchangeable Senior Debentures due 2050, Liberty’s 2.375% Exchangeable Senior Debentures due 2053 and an undrawn margin loan.
Previous wording
Prior to the Split-Off, the Braves Group was primarily comprised of Braves Holdings, which indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC”), certain assets and liabilities associated with ANLBC’s stadium (the “Stadium”) and a mixed-use development around the Stadium that features retail, office, hotel and entertainment opportunities and corporate cash.
Current wording
Prior to the Atlanta Braves Holdings Split-Off, the Braves Group was primarily comprised of Braves Holdings, which indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC”), certain assets and liabilities associated with ANLBC’s stadium (the “Stadium”) and a mixed-use development around the Stadium that features retail, office, hotel and entertainment opportunities and corporate cash.
Previous wording
As of June 30, 2024, the Liberty SiriusXM Group is primarily comprised of Liberty’s interest in Sirius XM Holdings, corporate cash, Liberty’s 3.75% Convertible Senior Notes due 2028, Liberty’s 2.75% Exchangeable Senior Debentures due 2049 and a margin loan obligation incurred by a wholly-owned special purpose subsidiary of Liberty. As of June 30, 2024, the Liberty SiriusXM Group had cash and cash equivalents of approximately $188 million, which included approximately $100 million of subsidiary cash.
Current wording
Prior to the Liberty Sirius XM Holdings Split-Off, the Liberty SiriusXM common stock was intended to track and reflect the separate economic performance of the businesses, assets and liabilities attributed to the Liberty SiriusXM Group. At the time of the Liberty Sirius XM Holdings Split-Off, the Liberty SiriusXM Group was comprised of Liberty’s interest in Sirius XM Holdings, corporate cash, Liberty’s 3.75% Convertible Senior Notes due 2028, Liberty’s 2.75% Exchangeable Senior Debentures due 2049 and a margin loan obligation incurred by a wholly-owned special purpose subsidiary of Liberty. Liberty Sirius XM Holdings is presented as a discontinued operation in the accompanying condensed consolidated financial statements. Prior to the Reclassification, Liberty’s interest in Live Nation, Liberty’s 0.5% Exchangeable Senior Debentures due 2050 and a margin loan secured by shares of Live Nation were attributed to the Liberty SiriusXM Group and are presented as continuing operations in the accompanying condensed consolidated financial statements.
Previous wording
Braves Holdings was a subsidiary of the Company until the Split-Off on July 18, 2023. Braves Holdings is not presented as a discontinued operation in the Company’s consolidated financial statements as the Split-Off did not represent a strategic shift that had a major effect on the Company’s operations and financial results.
Current wording
Braves Holdings was a subsidiary of the Company until the Atlanta Braves Holdings Split-Off on July 18, 2023. Braves Holdings is not presented as a discontinued operation in the Company’s consolidated financial statements as the Atlanta Braves Holdings Split-Off did not represent a strategic shift that had a major effect on the Company’s operations and financial results.
Previous wording
Revenue. Our consolidated revenue decreased $78 million for the three months ended June 30, 2024, as compared to the corresponding period in the prior year, driven by a decrease in Braves Holdings revenue due to the Split-Off in 2023, a decrease in Sirius XM Holdings revenue and intergroup eliminations, partially offset by an increase in Formula 1 revenue and revenue from QuintEvents, which was acquired in January 2024. Our consolidated revenue increased $115 million for the six months ended June 30, 2024, as compared to the corresponding periods in the prior year, driven by an increase in Formula 1 revenue and revenue from QuintEvents, partially offset by a decrease in Braves Holdings revenue due to the Split-Off in 2023, a decrease in Sirius XM Holdings revenue and intergroup eliminations. See “Results of Operations—Businesses” below for a more complete discussion of the results of operations of Sirius XM Holdings and Formula 1.
Current wording
Revenue. Our consolidated revenue decreased $25 million for the three months ended September 30, 2024, as compared to the corresponding period in the prior year, driven by a decrease in Braves Holdings revenue due to the Atlanta Braves Holdings Split-Off in 2023, a decrease in Formula 1 revenue and intergroup eliminations, partially offset by revenue from QuintEvents, which was acquired in January 2024. Our consolidated revenue increased $144 million for the nine months ended September 30, 2024, as compared to the corresponding period in the prior year, driven by an increase in Formula 1 revenue and revenue from QuintEvents, partially offset by a decrease in Braves Holdings revenue due to the Atlanta Braves Holdings Split-Off in 2023 and intergroup eliminations. See “Results of Operations—Businesses” below for a more complete discussion of Formula 1’s results of operations.
Previous wording
Operating income (loss). Our consolidated operating income increased $5 million for the three months ended June 30, 2024, as compared to the corresponding period in the prior year, primarily driven by $18 million and $12 million increases in Sirius XM Holdings and Formula 1 operating results, respectively, and QuintEvents operating results, which was acquired in January 2024, partially offset by the impact of the Split-Off of Braves Holdings in 2023. Our consolidated operating income increased $167 million for the six months ended June 30, 2024, as compared to the corresponding period in the prior year, primarily driven by increases in Formula 1 and Sirius XM Holdings operating results, and an increase in corporate and other operating results, primarily driven by the Split-Off of Braves Holdings in 2023, partially offset by QuintEvents operating results. See “Results of Operations—Businesses” below for a more complete discussion of the results of operations of Sirius XM Holdings and Formula 1.
Current wording
in Formula 1 operating results, partially offset by QuintEvents operating results, which was acquired in January 2024. Our consolidated operating income increased $118 million for the nine months ended September 30, 2024, as compared to the corresponding period in the prior year, primarily driven by an increase in Formula 1 operating results and the Atlanta Braves Holdings Split-Off in 2023, partially offset by QuintEvents operating results. See “Results of Operations—Businesses” below for a more complete discussion of Formula 1’s results of operations.
Previous wording
We recorded $116 million and $110 million of stock-based compensation expense for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the total unrecognized compensation cost related to unvested Liberty equity awards was approximately $24 million. Such amount will be recognized in our condensed consolidated statements of operations over a weighted average period of approximately 1.8 years. Additionally, as of June 30, 2024, the total unrecognized compensation cost related to unvested Sirius XM Holdings stock options and restricted stock units was $385 million. The Sirius XM Holdings unrecognized compensation cost will be recognized in our condensed consolidated statements of operations over a weighted average period of approximately 2.4 years.
Current wording
Stock-based compensation. Stock-based compensation includes compensation related to options, stock appreciation rights, restricted stock awards, restricted stock units, performance-based restricted stock units and other stock-based awards granted to officers, employees, nonemployee directors and employees of our subsidiaries. We recorded $27 million and $22 million of stock-based compensation expense for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, the total unrecognized compensation cost related to unvested Liberty equity awards was approximately $15 million. Such amount will be recognized in our condensed consolidated statements of operations over a weighted average period of approximately 2.1 years.
Previous wording
Adjusted OIBDA. To provide investors with additional information regarding our financial results, we also disclose Adjusted OIBDA, which is a non-GAAP (as defined below) financial measure. We define Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, separately reported litigation settlements, restructuring, acquisition and impairment charges. Our chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating
Current wording
Adjusted OIBDA. To provide investors with additional information regarding our financial results, we also disclose Adjusted OIBDA, which is a non-GAAP (as defined below) financial measure. We define Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, separately reported litigation settlements, restructuring, acquisition and impairment charges. Our chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The following table provides a reconciliation of Operating income (loss) to Adjusted OIBDA:
Previous wording
Interest expense. Consolidated interest expense decreased $14 million and $19 million for the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to the Split-Off of Braves Holdings in 2023. Certain debt was reattributed from the Liberty SiriusXM Group to the Liberty Live Group effective August 3, 2023. The interest related to such debt is reflected in interest expense for the Liberty SiriusXM Group prior to the Reclassification and in interest expense for the Liberty Live Group following the Reclassification.
Current wording
Interest expense. Consolidated interest expense was flat and decreased $4 million for the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year. Interest expense for the Liberty Live Group increased due to an increase in the average amount of debt outstanding. Certain debt was reattributed from the Liberty SiriusXM Group to the Liberty Live Group effective August 3, 2023. The interest related to such debt is reflected in interest expense for the Liberty SiriusXM Group prior to the Reclassification and in interest expense for the Liberty Live Group following the Reclassification. Interest expense for the Braves Group decreased due to the Atlanta Braves Holdings Split-Off.
Previous wording
Changes in unrealized gains (losses) on debt measured at fair value are due to market factors primarily driven by changes in the fair value of the underlying shares into which the debt is exchangeable.
Current wording
The changes in unrealized gains (losses) on debt and equity securities are due to market factors primarily driven by changes in the fair value of the stock underlying these financial instruments. Changes in unrealized gains (losses) on foreign currency forward contracts are driven by changes in foreign currency exchange rates. Changes in unrealized gains (losses) on debt measured at fair value are due to market factors primarily driven by changes in the fair value of the underlying shares into which the debt is exchangeable. Other realized and unrealized gains (losses) are primarily driven by changes in the fair value of Formula 1’s interest rate swaps and the realized gains (losses) on Formula 1’s interest rate swaps.
Previous wording
Other, net. Other, net income decreased $22 million and $9 million for the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily driven by gains on early debt extinguishment recognized during the three and six months ended June 30, 2023. The decrease in other, net income during the six months ended June 30, 2024 was partially offset by tax related expense pursuant to a tax sharing agreement with Qurate Retail recognized during the six months ended June 30, 2023 and gains on dilution of our investment in Live Nation recognized during the six months ended June 20, 2024 compared to losses on dilution of our investment in Live Nation recognized during the six months ended June 30, 2023.
Current wording
during the nine months ended September 30, 2024 was also driven by tax related expense pursuant to a tax sharing agreement with Qurate Retail, Inc. recorded during the nine months ended September 30, 2023.
Previous wording
Income taxes. During the three and six months ended June 30, 2024, we had earnings before income taxes of $623 million and $939 million, respectively, and income tax expense of $116 million and $187 million, respectively. During the three and six months ended June 30, 2023, we had earnings before income taxes of $367 million and $469 million, respectively, and income tax expense of $64 million and $114 million, respectively. For the three and six months ended June 30, 2024, the Company recognized tax expense less than the expected federal rate of 21% primarily due to certain gains that are not taxable and tax credits and incentives generated by our clean energy investments, partially offset by the effect of state income taxes. For the three months ended June 30, 2023, the Company recognized tax expense less than the expected federal rate of 21% primarily due to a decrease in the Company’s valuation allowance and tax credits and incentives generated by our clean energy investments, partially offset by the effect of state income taxes. For the six months ended June 30, 2023, the Company recognized tax expense greater than the expected federal rate of 21% primarily due to the effect of state income taxes and certain losses that are not deductible for tax purposes, partially offset by tax credits and incentives generated by our clean energy investments and a decrease in the Company’s valuation allowance.
Current wording
Income taxes. During the three and nine months ended September 30, 2024, we had earnings from continuing operations before income taxes of $135 million and $335 million, respectively, and income tax expense of $3 million and $41 million, respectively. During the three and nine months ended September 30, 2023, we had earnings from continuing operations before income taxes of $198 million and $78 million, respectively, and income tax expense of $46 million and $37 million, respectively. For the three months ended September 30, 2024, the Company recognized tax expense less than the expected federal tax rate of 21% primarily due to certain gains that are not taxable and earnings in foreign jurisdictions taxed at rates lower than the 21% U.S. federal tax rate. For the nine months ended September 30, 2024, the Company recognized tax expense less than the expected federal tax rate of 21% due to tax benefits related to deductible stock-based compensation, certain gains that are not taxable and earnings in foreign jurisdictions taxed at rates lower than the 21% U.S. federal tax rate. For the three months ended September 30, 2023, the Company recognized tax expense greater than the expected federal tax rate of 21% primarily due to the impact of a reduction to deferred tax assets for certain federal tax credit carryforwards, partially offset by certain gains that are not taxable. For the nine months ended September 30, 2023, the Company recognized tax expense greater than the expected federal tax rate of 21% primarily due to certain losses that are not deductible for tax purposes.
Previous wording
Net earnings. We had net earnings of $507 million and $752 million during the three and six months ended June 30, 2024, respectively, and $303 million and $355 million for the three months and six months ended June 30, 2023, respectively. The changes were the result of the above-described fluctuations in our revenue, expenses and other gains and losses.
Current wording
Net earnings (loss) from continuing operations. We had net earnings from continuing operations of $132 million and net earnings from continuing operations of $294 million during the three and nine months ended September 30, 2024, respectively, and net earnings from continuing operations of $152 million and $41 million for the three months and nine months ended September 30, 2023, respectively. The changes were the result of the above-described fluctuations in our revenue, expenses and other gains and losses.
Previous wording
Liberty has a controlling interest in Sirius XM Holdings, which has significant cash and cash provided by operating activities, although due to Sirius XM Holdings being a separate public company and the noncontrolling interest, we do not have ready access to its cash, except through dividends. Cash held by Formula 1 is accessible by Liberty, except when a restricted payment (“RP”) test imposed by the first lien term loan and the revolving credit facility at Formula 1 is not met. Pursuant to the RP test, Liberty does not have unlimited access to Formula 1’s cash when the leverage ratio (defined as net debt divided by covenant earnings before interest, tax, depreciation and amortization for the trailing twelve months) exceeds a certain threshold. During the six months ended June 30, 2024, Formula 1 distributed $150 million to Liberty and the RP test was met, pro forma for such distribution. If distributions are made in the future, the RP test, pro forma for such distributions, would have to be met. As of June 30, 2024, Liberty had $1,075 million available under Liberty’s margin loan secured by shares of Sirius XM Holdings and $400 million available under Liberty’s margin loan secured by shares of Live Nation. Liberty believes that it currently has appropriate legal structures in place to repatriate foreign cash as tax efficiently as possible and meet the business needs of the Company.
Current wording
unlimited access to Formula 1’s cash when the leverage ratio (defined as net debt divided by covenant earnings before interest, tax, depreciation and amortization for the trailing twelve months) exceeds a certain threshold. During the nine months ended September 30, 2024, Formula 1 distributed $150 million to Liberty and the RP test was met, pro forma for such distribution. If distributions are made in the future, the RP test, pro forma for such distributions, would have to be met. As of September 30, 2024, Liberty had $400 million available under Liberty’s margin loan secured by shares of Live Nation. Liberty believes that it currently has appropriate legal structures in place to repatriate foreign cash as tax efficiently as possible and meet the business needs of the Company.
Previous wording
As stated in note 7 to the accompanying condensed consolidated financial statements, the Company, Sirius XM Holdings and Formula 1 are in compliance with their debt covenants as of June 30, 2024.
Current wording
The Company and Formula 1 are in compliance with their debt covenants as of September 30, 2024.
Previous wording
Liberty’s primary uses of cash during the six months ended June 30, 2024 (excluding cash used by Sirius XM Holdings and Formula 1) were $205 million for acquisitions, net of cash acquired, and $103 million for debt repayments, which were primarily funded by cash on hand, quarterly cash dividends from Sirius XM Holdings and proceeds from dispositions.
Current wording
Liberty’s primary uses of cash during the nine months ended September 30, 2024 (excluding cash used by Formula 1) were $205 million for acquisitions, net of cash acquired, and $117 million for debt repayments, which were primarily funded by cash on hand and proceeds from dispositions. In addition, the Company generated approximately $939 million of net proceeds from the issuance of approximately 12.2 million shares of Series C Liberty Formula One common stock during the nine months ended September 30, 2024.
Previous wording
During the six months ended June 30, 2024, Formula 1’s primary use of cash was $38 million of capital expenditures, funded by cash from operations.
Current wording
During the nine months ended September 30, 2024, Formula 1’s primary use of cash was $50 million of capital expenditures, funded by cash from operations.
Previous wording
The projected uses of Liberty's cash (excluding Sirius XM Holdings’ and Formula 1’s uses of cash) are primarily capital expenditures, the investment in existing or new businesses, including the acquisition of Dorna Sports, S.L., debt service and the potential buyback of common stock under the approved share buyback program. Liberty expects to fund its projected uses of cash with cash on hand, borrowing capacity under margin loans and outstanding or new debt instruments, or dividends or distributions from operating subsidiaries. Liberty expects to receive quarterly cash dividends from Sirius XM Holdings, which are non-taxable because Liberty and Sirius XM Holdings are members of the same consolidated federal income tax group. Liberty may be required to make net payments of income tax liabilities to settle items under discussion with tax authorities.
Current wording
The projected uses of Liberty's cash (excluding Formula 1’s uses of cash) are primarily capital expenditures, the investment in existing or new businesses, including the acquisition of Dorna Sports, S.L., debt service and the potential buyback of common stock under the approved share buyback program. Liberty expects to fund its projected uses of cash with cash on hand, borrowing capacity under margin loans and outstanding or new debt instruments, or distributions from operating subsidiaries. Liberty may be required to make net payments of income tax liabilities to settle items under discussion with tax authorities.
Previous wording
Formula 1. Formula 1 is a global motorsports business that holds exclusive commercial rights with respect to the World Championship, an annual, approximately nine-month long, motor race-based competition in which teams compete for the Constructors' Championship and drivers compete for the Drivers' Championship. The World Championship takes place on various circuits throughout the world. Formula 1 derives its primary revenue from the commercial exploitation and development of the World Championship through a combination of race promotion, media rights and sponsorship arrangements. A significant majority of the race promotion, media rights and sponsorship contracts specify payments in advance and annual increases in the fees payable over the course of the contracts. The 2024 World Championship calendar is scheduled to have 24 Events. The 2023 World Championship calendar was originally scheduled to have 23 Events. However, following the cancellation of the Emilia-Romagna Grand Prix at Imola due to severe flooding in the region, and confirmation that it would not be replaced in May 2023, 22 Events took place, with income and cost recognition adjusted to reflect the revised 22 Event calendar during the second quarter of 2023.
Current wording
for the Constructors' Championship and drivers compete for the Drivers' Championship. The World Championship takes place on various circuits throughout the world. Formula 1 derives its primary revenue from the commercial exploitation and development of the World Championship through a combination of race promotion, media rights and sponsorship arrangements. A significant majority of the race promotion, media rights and sponsorship contracts specify payments in advance and annual increases in the fees payable over the course of the contracts. The 2024 World Championship calendar is scheduled to have 24 Events. The 2023 World Championship calendar was originally scheduled to have 23 Events. However, following the cancellation of the Emilia-Romagna Grand Prix at Imola due to severe flooding in the region, and confirmation that it would not be replaced in May 2023, 22 Events took place, with income and cost recognition adjusted to reflect the revised 22 Event calendar during the second quarter of 2023.
Previous wording
1 to secure Formula 2, Formula 3 and F1 Academy races at their Events, technical service fees from promoters to support the origination of program footage and ticketing revenue from Formula 1’s direct promotion of the Las Vegas Grand Prix), media rights fees (earned from licensing the right to broadcast Events and Formula 2 and Formula 3 races on television and other platforms, F1 TV subscriptions and other related services, the origination of program footage, footage from Formula 1’s archives and the licensing of radio broadcast and other ancillary media rights) and sponsorship fees (earned from the sale of World Championship and Event-related advertising and sponsorship rights and the servicing of such rights, rights to advertise on Formula 1’s digital platforms and at non-Championship related events).
Current wording
Primary Formula 1 revenueis derived from the commercial exploitation and development of the World Championship through a combination of race promotion fees (earned from granting the rights to host, stage and promote each Event on the World Championship calendar, fees from certain race promoters to license additional commercial rights from Formula 1 to secure Formula 2, Formula 3 and F1 Academy races at their Events, technical service fees from promoters to support the origination of program footage and ticketing revenue from Formula 1’s direct promotion of the Las Vegas Grand Prix), media rights fees (earned from licensing the right to broadcast Events and Formula 2 and Formula 3 races on television and other platforms, F1 TV subscriptions and other related services, the origination of program footage, footage from Formula 1’s archives and the licensing of radio broadcast and other ancillary media rights) and sponsorship fees (earned from the sale of World Championship and Event-related advertising and sponsorship rights and the servicing of such rights, rights to advertise on Formula 1’s digital platforms and at non-Championship related events).
Previous wording
Primary Formula 1 revenue increased $121 million and $270 million during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, driven by the calendar variance, with two and three more Events, respectively. Media rights revenue increased during the three and six months ended June 30, 2024 due to the impact of the calendar variance on revenue recognition, contractual increases in fees and continued growth in F1 TV subscription revenue. Sponsorship revenue increased during the three and six months ended June 30, 2024 due to the impact of the calendar variance on Event specific and season-based fees, revenue from new sponsors and contractual increases in fees from existing sponsors. Race promotion revenue was relatively flat during the three months ended June 30, 2024 as compared to the corresponding period in the prior year, as the revenue from two more Events was offset by the different mix of Events held. Race promotion revenue increased during the six months ended June 30, 2024, as compared to the corresponding period in the prior year, driven by three more Events, contractual increases in fees, and new Sprint and F1 Academy race fees, partially offset by the calendar mix variance.
Current wording
Primary Formula 1 revenue decreased $32 million during the three months ended September 30, 2024, as compared to the corresponding period in the prior year, driven by the calendar variance, with one less Event held. Media rights revenue decreased during the three months ended September 30, 2024 due to the impact of the calendar variance on revenue recognition, partially offset by contractual increases in fees and continued growth in F1 TV subscription revenue. Sponsorship revenue decreased during the three months ended September 30, 2024 due to the impact of the calendar variance on revenue recognition and the different mix of Events held. Race promotion revenue increased during the three months ended September 30, 2024 due to the different mix of Events held and contractual increases in fees.
Previous wording
Other Formula 1 revenue is generated from miscellaneous and ancillary sources primarily related to the sale of tickets to the Formula One Paddock Club at most Events, facilitating the shipment of cars and equipment to and from Events outside of Europe, the sale of hospitality and experiences at the Las Vegas Grand Prix, the operation of the Formula 2, Formula 3 and the new F1 Academy series, other licensing opportunities, various television production activities and other ancillary operations. Other Formula 1 revenue increased $26 million and $49 million during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, driven by the impact of more Events during the current year periods, resulting in higher hospitality, freight, travel, technical services and Formula 2 and Formula 3 income. The increase during the six months ended June 30, 2024 was also driven by the sale of new Formula 2 cars and associated parts at the beginning of the new Formula 2 vehicle cycle.
Current wording
Other Formula 1 revenue is generated from miscellaneous and ancillary sources primarily related to the sale of tickets to the Formula One Paddock Club at most Events, facilitating the shipment of cars and equipment to and from Events outside of Europe, the sale of hospitality and experiences at the Las Vegas Grand Prix, the operation of the Formula 2, Formula 3 and the new F1 Academy series, other licensing opportunities, various television production activities and other ancillary operations. Other Formula 1 revenue increased $6 million during the three months ended September 30, 2024, as compared to the corresponding period in the prior year, driven by growth in licensing revenue and revenue generated from third-party events at the Grand Prix Plaza site in Las Vegas, partially offset by decreases in revenue from hospitality and experiences due to one less Event held. Other revenue increased $55 million during the nine months ended September 30, 2024, as compared to the corresponding period in the prior year, driven by the impact of two more Events, resulting in higher hospitality and freight income. The increase during the nine months ended September 30, 2024 was also driven by the sale of new Formula 2 cars and associated parts at the beginning of the new Formula 2 vehicle cycle, higher licensing revenue and revenue generated from third-party events at the Grand Prix Plaza site in Las Vegas.
Previous wording
Team payments are recognized on a pro-rata basis across the Events of the World Championship calendar. The increases in team payments during the three and six months ended June 30, 2024, as compared to the corresponding periods in the prior year, were attributable to the pro rata recognition of expected increased team payments.
Current wording
Team payments are recognized on a pro-rata basis across the Events of the World Championship calendar. Team payments decreased during the three months ended September 30, 2024 due to the pro rata recognition of expected team payments, with one less Event held in the current period. Team payments increased during the nine months ended September 30, 2024 due to the pro rata recognition of expected increased team payments.
Previous wording
Other costs of Formula 1 revenue are largely variable in nature and relate to both primary and other Formula 1 revenue. On an annual basis, the largest components of other costs of Formula 1 revenue are costs related to promoting, organizing and delivering the Las Vegas Grand Prix, hospitality costs, which are principally related to catering and other aspects of the production and delivery of hospitality offerings at the Las Vegas Grand Prix and the Paddock Club at other Events, and costs incurred in the provision and sale of freight, travel and logistical services. Other costs of Formula 1 revenue also include sponsorship and digital product sales’ commissions, circuit rights’ fees payable under various agreements with race promoters to acquire certain commercial rights at Events, including the right to sell advertising, hospitality and support race opportunities, annual Federation Internationale de l’Automobile (“FIA”) regulatory fees, Formula 2 and Formula 3 cars, parts and maintenance services, costs related to the F1 Academy series, television production and post-production
Current wording
Other costs of Formula 1 revenue are largely variable in nature and relate to both primary and other Formula 1 revenue. On an annual basis, the largest components of other costs of Formula 1 revenue are costs related to promoting, organizing and delivering the Las Vegas Grand Prix, hospitality costs, which are principally related to catering and other aspects of the production and delivery of hospitality offerings at the Las Vegas Grand Prix and the Paddock Club at other Events, and costs incurred in the provision and sale of freight, travel and logistical services. Other costs of Formula 1 revenue also include sponsorship and digital product sales’ commissions, circuit rights’ fees payable under various agreements with race promoters to acquire certain commercial rights at Events, including the right to sell advertising, hospitality and support race opportunities, annual Federation Internationale de l’Automobile (“FIA”) regulatory fees, Formula 2 and Formula 3 cars, parts and maintenance services, costs related to the F1 Academy series, television production and post-production services, advertising production services and digital and social media activities. Other costs increased $7 million during the three months ended September 30, 2024, as compared to the corresponding period in the prior year, primarily due to Las Vegas Grand Prix related lease costs, higher digital, F1 Academy and commissions and partner servicing costs associated with increased Primary Formula 1 revenue streams, partially offset by the impact of one less Event during the period, leading to lower FIA regulatory, technical, hospitality and travel costs. Other costs increased $71 million during the nine months ended September 30, 2024, as compared to the corresponding period in the prior year, primarily due to higher commissions and partner servicing costs associated with increased Primary Formula 1 revenue streams, higher FIA
Previous wording
services, advertising production services and digital and social media activities. Other costs increased $35 million and $64 million during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to higher commissions and partner servicing costs associated with increased Primary Formula 1 revenue streams and higher hospitality, FIA regulatory, digital, technical and travel costs related to the additional Events in the current year periods, higher costs of the F1 Academy series and Las Vegas Grand Prix related lease costs. The increase for the six months ended June 30, 2024 was also driven by the costs of supplying the new Formula 2 cars and associated parts at the start of the new vehicle cycle and higher freight costs related to the additional Events in the current year period.
Current wording
regulatory, digital, technical, hospitality, freight and travel costs related to two more Events in the current year period, higher costs of the F1 Academy series and Las Vegas Grand Prix related lease costs. The increase for the nine months ended September 30, 2024 was also driven by the costs of supplying the new Formula 2 cars and associated parts at the start of the new vehicle cycle.
Previous wording
Selling, general and administrative expenses include personnel costs, legal, professional and other advisory fees, bad debt expense, rental expense, information technology costs, insurance premiums, maintenance and utility costs and other general office administration costs. Selling, general and administrative expenses increased $16 million and $17 million during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to higher personnel, information technology, property, legal and other professional fee costs, partially offset by lower marketing costs, lower foreign currency exchange losses and bad debt recoveries.
Current wording
Selling, general and administrative expenses include personnel costs, legal, professional and other advisory fees, bad debt expense, rental expense, information technology costs, insurance premiums, maintenance and utility costs and other general office administration costs. Selling, general and administrative expenses increased $22 million and $39 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year, primarily due to higher personnel, information technology, property, marketing, legal and other professional fee costs.
Previous wording
Stock-based compensation was flat during the both the three and six months ended June 30, 2024, as compared to the corresponding periods in the prior year.
Current wording
Stock-based compensation was flat during the both the three and nine months ended September 30, 2024, as compared to the corresponding periods in the prior year.
Previous wording
Depreciation and amortization includes depreciation of property and equipment and amortization of intangible assets. Depreciation and amortization decreased $7 million and $17 million during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods in the prior year primarily due to a decrease in amortization expense related to certain intangible assets acquired in the acquisition of Formula 1 by Liberty.
Current wording
Depreciation and amortization includes depreciation of property and equipment and amortization of intangible assets. Depreciation and amortization decreased $8 million and $25 million during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods in the prior year primarily due to a decrease in amortization expense related to certain intangible assets acquired in the acquisition of Formula 1 by Liberty.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
respective fair market values. Braves Holdings, LLC ("Braves Holdings"), a consolidated subsidiary, was included in “Corporate and Other” prior to the Atlanta Braves Holdings Split-Off (defined below).
Current report — wording carried from elsewhere
Following the Liberty Sirius XM Holdings Split-Off, on September 9, 2024, a wholly owned subsidiary of Liberty Sirius XM Holdings merged with and into Sirius XM Holdings Inc. (“Sirius XM Holdings”), with Sirius XM Holdings surviving the merger as a wholly owned subsidiary of Liberty Sirius XM Holdings (the “Merger” and, together with the Liberty Sirius XM Holdings Split-Off, the “Transactions”). As a result of the Transactions, Liberty Sirius XM Holdings is an independent public company separate from Liberty.
Current report — wording carried from elsewhere
While the Formula One Group and the Liberty Live Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Holders of tracking stock have no direct claim to the group's stock or assets and therefore, do not own,
Current report — wording carried from elsewhere
Cash held by Formula 1 is accessible by Liberty, except when a restricted payment (“RP”) test imposed by the first lien term loan and the revolving credit facility at Formula 1 is not met. Pursuant to the RP test, Liberty does not have
Current report — wording carried from elsewhere
Formula 1. Formula 1 is a global motorsports business that holds exclusive commercial rights with respect to the World Championship, an annual, approximately nine-month long, motor race-based competition in which teams compete
Current report — wording carried from elsewhere
Primary Formula 1 revenue increased $238 million during the nine months ended September 30, 2024, as compared to the corresponding period in the prior year, driven by the calendar variance, with two more Events held. Media rights revenue increased during the nine months ended September 30, 2024 due to the impact of the calendar variance on revenue recognition, contractual increases in fees and continued growth in F1 TV subscription revenue. Sponsorship revenue increased during the nine months ended September 30, 2024 driven by two additional Events in the period and fees from new sponsors. Race promotion revenue increased during the nine months ended September 30, 2024 driven by two more Events, contractual increases in fees and growing Sprint and F1 Academy fees.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
On August 3, 2023, the Company reclassified its then-outstanding shares of common stock into three new tracking stocks—Liberty SiriusXM common stock, Liberty Formula One common stock and Liberty Live common stock, and, in connection therewith, provided for the attribution of the businesses, assets and liabilities of the Company’s remaining tracking stock groups among its newly created Liberty SiriusXM Group, Formula One Group and Liberty Live Group (the
Previous report — wording carried elsewhere
activities and other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The following table provides a reconciliation of Operating income (loss) to Adjusted OIBDA:
Previous report — wording carried elsewhere
The changes in unrealized gains (losses) on debt and equity securities are due to market factors primarily driven by changes in the fair value of the stock underlying these financial instruments.
Previous report — wording carried elsewhere
Other realized and unrealized gains (losses) are primarily driven by changes in the fair value of Formula 1’s interest rate swaps, realized gains (losses) on Formula 1’s interest rate swaps and changes in the fair value of the Company’sforeign currency forward contracts.
Previous report — wording carried elsewhere
Sirius XM Holdings’ operating results were as follows:
Previous report — wording carried elsewhere
Primary Formula 1 revenueis derived from the commercial exploitation and development of the World Championship through a combination of race promotion fees (earned from granting the rights to host, stage and promote each Event on the World Championship calendar, fees from certain race promoters to license additional commercial rights from Formula