• | Increased STARZ and ENCORE subscriptions by 9% and 3%, respectively |
• | Premiered the new Starz Original series, Boss, starring Kelsey Grammer, to positive reviews |
• | Announced new series, Da Vinci's Demons, the first series under the Starz partnership with BBC Worldwide |
• | Acquired Barnes & Noble 7.75% convertible preferred stock which converts into a 16.6% common equity stake |
• | Repurchased $51 million of Liberty Starz stock from August 1st through October 31st, 2011 |
• | Repurchased $169 million of Liberty Capital stock from August 1st through October 31st, 2011 |
1) | Liberty's President and CEO, Gregory B. Maffei, will discuss these highlights and other matters in Liberty's earnings conference call which will begin at 11:15 a.m. (ET) on November 8, 2011. For information regarding how to access the call, please see “Important Notice” later in this document. |
2) | For a definition of adjusted OIBDA and applicable reconciliations see the accompanying schedules. |
(amounts in millions and include the value of derivatives) | 6/30/2011 | 9/30/2011 | ||
SiriusXM debt and equity(1) | 6,055 | 4,283 | ||
Live Nation debt and equity(2) | 474 | 338 | ||
Barnes & Noble investment(3) | — | 206 | ||
Non-strategic public holdings(4) | 1,334 | 1,089 | ||
Total Attributed Liberty Capital Group | 7,863 | 5,916 |
(1) | Represents the fair value of Liberty's various debt and equity investments in SiriusXM. The fair value of Liberty's convertible preferred stock is calculated on an as-if-converted basis into common stock. In accordance with GAAP, Liberty accounts for the convertible preferred stock using the equity method of accounting and includes this in its consolidated balance sheet at historical carrying value. |
(2) | Represents fair value of Liberty's debt and equity investments. In accordance with GAAP, Liberty accounts for this investment using the equity method of accounting and includes it in its consolidated balance sheet at its historical carrying value. |
(3) | Represents the fair value of Liberty's preferred equity investment in Barnes & Noble, which is accounted for at fair value on Liberty's balance sheet. |
(4) | Represents Liberty's non-strategic public holdings which are accounted for at fair value including any associated equity derivatives on such investments. Also includes the liability associated with borrowed shares which totaled $1,148 million and $1,076 million on June 30th, 2011 and September 30th, 2011, respectively. |
(amounts in millions) | 6/30/2011 | 9/30/2011 | ||
Cash and Liquid Investments Attributable to: | ||||
Liberty Starz group(1) (2) | 1,231 | 1,059 | ||
Liberty Capital group(3) (4) | 1,259 | 1,153 | ||
Total Liberty Consolidated Cash and Liquid Investments | 2,490 | 2,212 | ||
Less: | ||||
Short-term marketable securities - Liberty Starz group | 132 | — | ||
Long-term marketable securities - Liberty Starz group | 64 | — | ||
Short-term marketable securities - Liberty Capital group | 192 | 275 | ||
Total Liberty Consolidated Cash (GAAP) | 2,102 | 1,937 | ||
Debt: | ||||
Other | 42 | 41 | ||
Total Attributed Liberty Starz Group Debt (GAAP) | 42 | 41 | ||
Bank investment facility | 750 | 750 | ||
Total Attributed Liberty Capital Group Debt (GAAP) | 750 | 750 | ||
Total Consolidated Liberty Debt (GAAP) | 792 | 791 | ||
(1) | Includes $132 million of short-term marketable securities with an original maturity greater than 90 days as of June 30th, 2011. |
(2) | Includes $64 million of marketable securities with an original maturity greater than one year as of June 30th, 2011, which is reflected in investments in available-for-sale securities in Liberty's condensed consolidated balance sheet. |
(3) | Includes $192 million and $275 million of short-term marketable securities with an original maturity greater than 90 days as of June 30th, 2011 and September 30th, 2011, respectively. |
(4) | Excludes $638 million and $638 million of restricted cash on June 30th, 2011 and September 30th, 2011, respectively, associated with the bank investment facility, which matures in March 2012, and is reflected in current restricted cash on Liberty's consolidated balance sheet. |
(amounts in millions) | 3Q10 | 4Q10 | 1Q11 | 2Q11 | 3Q11 | |||||
Liberty Starz Group | ||||||||||
Starz LLC(1) | ||||||||||
Revenue | 316 | 400 | 391 | 403 | 389 | |||||
Adjusted OIBDA | 92 | 110 | 131 | 118 | 107 | |||||
Operating income | 87 | 70 | 124 | 112 | 101 | |||||
Subscription units - Starz | 17.4 | 18.2 | 18.8 | 19.0 | 19.0 | |||||
Subscription units - Encore | 32.0 | 32.8 | 33.1 | 32.9 | 32.8 | |||||
(1) | Includes the legacy Starz Entertainment and the legacy Starz Media businesses for the three months ended December 31st, 2010, March 31st, 2011, June 30th, 2011 and September 30th, 2011 and only legacy Starz Entertainment results for the three months ended September 30th, 2010 as the change in attribution of Starz Media from Liberty Capital to Liberty Starz became effective as of September 30th, 2010. |
(amounts in millions) | 3Q10 | 4Q10 | 1Q11 | 2Q11 | 3Q11 | |||||
Liberty Starz Group | ||||||||||
Adjusted OIBDA | 89 | 106 | 126 | 117 | 104 | |||||
Depreciation and amortization | (7 | ) | (2 | ) | (5 | ) | (5 | ) | (4 | ) |
Stock compensation expense | (5 | ) | (38 | ) | (5 | ) | (4 | ) | (3 | ) |
Impairment of long-lived assets | — | (4 | ) | — | — | — | ||||
Operating Income | 77 | 62 | 116 | 108 | 97 | |||||
Liberty Capital Group | ||||||||||
Adjusted OIBDA | 25 | — | 358 | 7 | 25 | |||||
Depreciation and amortization | (20 | ) | (15 | ) | (16 | ) | (15 | ) | (11 | ) |
Stock compensation expense | (8 | ) | (9 | ) | (6 | ) | (6 | ) | — | |
Gain on legal settlement | — | 48 | 7 | — | — | |||||
Operating Income (Loss) | (3 | ) | 24 | 343 | (14 | ) | 14 | |||
(amounts in millions) | 3Q10 | 4Q10 | 1Q11 | 2Q11 | 3Q11 | |||||
Liberty Starz Group | ||||||||||
Starz, LLC(1) - Actual results | ||||||||||
Adjusted OIBDA | 92 | 110 | 131 | 118 | 107 | |||||
Depreciation and amortization | (3 | ) | (5 | ) | (5 | ) | (4 | ) | (4 | ) |
Stock compensation expense | (2 | ) | (35 | ) | (2 | ) | (2 | ) | (2 | ) |
Operating Income | 87 | 70 | 124 | 112 | 101 | |||||
Starz, LLC(2) - For discussion purposes | ||||||||||
Revenue | 397 | 400 | 391 | 403 | 389 | |||||
Adjusted OIBDA | 84 | 110 | 131 | 118 | 107 | |||||
Depreciation and amortization | (6 | ) | (5 | ) | (5 | ) | (4 | ) | (4 | ) |
Stock compensation expense | (1 | ) | (35 | ) | (2 | ) | (2 | ) | (2 | ) |
Operating Income | 77 | 70 | 124 | 112 | 101 | |||||
(1) | Includes the legacy Starz Entertainment and the legacy Starz Media businesses for the three months ended December 31st, 2010, March 31st, 2011, June 30th, 2011 and September 30th, 2011 and only legacy Starz Entertainment results for the three months ended September 30th, 2010 as the change in attribution of Starz Media from Liberty Capital to Liberty Starz became effective as of September 30th, 2010. |
(2) | Includes results for the legacy Starz Entertainment and the legacy Starz Media businesses for all periods presented, including the impact of intercompany eliminations. |
Attributed | ||||||||||||||||
Starz Group | Capital Group | Inter-group Eliminations | Consolidated Liberty | |||||||||||||
ASSETS | amounts in millions | |||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 1,059 | 878 | — | 1,937 | |||||||||||
Trade and other receivables, net | 252 | 47 | — | 299 | ||||||||||||
Program rights | 476 | — | — | 476 | ||||||||||||
Short term marketable securities | — | 275 | — | 275 | ||||||||||||
Restricted cash | 33 | 662 | — | 695 | ||||||||||||
Receivable from Liberty Interactive | — | 44 | — | 44 | ||||||||||||
Other current assets | 51 | 25 | (35 | ) | 41 | |||||||||||
Total current assets | 1,871 | 1,931 | (35 | ) | 3,767 | |||||||||||
Investments in available-for-sale securities and other cost investments | 1 | 2,781 | — | 2,782 | ||||||||||||
Investments in affiliates, accounted for using the equity method | — | 507 | — | 507 | ||||||||||||
Property and equipment, net | 98 | 121 | — | 219 | ||||||||||||
Intangible assets not subject to amortization | 132 | 343 | — | 475 | ||||||||||||
Intangible assets subject to amortization, net | 16 | 123 | — | 139 | ||||||||||||
Program rights | 325 | — | — | 325 | ||||||||||||
Deferred costs | — | 243 | — | 243 | ||||||||||||
Deferred tax assets | — | 301 | (63 | ) | 238 | |||||||||||
Other assets, at cost, net of accumulated amortization | 192 | 28 | — | 220 | ||||||||||||
Total assets | $ | 2,635 | 6,378 | (98 | ) | 8,915 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Intergroup Payable (Receivable) | $ | (187 | ) | ) | 187 | — | — | |||||||||
Accounts payable | 7 | 6 | — | 13 | ||||||||||||
Accrued liabilities | 222 | 50 | — | 272 | ||||||||||||
Financial instruments | 5 | 1,080 | — | 1,085 | ||||||||||||
Current portion of debt | 4 | 750 | — | 754 | ||||||||||||
Current deferred tax liabilities | — | 777 | (35 | ) | 742 | |||||||||||
Deferred revenue | 44 | 30 | — | 74 | ||||||||||||
Other current liabilities | 37 | 35 | — | 72 | ||||||||||||
Total current liabilities | 132 | 2,915 | (35 | ) | 3,012 | |||||||||||
Long-term debt | 37 | — | — | 37 | ||||||||||||
Deferred income tax liabilities | 63 | — | (63 | ) | — | |||||||||||
Deferred revenue | 2 | 529 | — | 531 | ||||||||||||
Other liabilities | 9 | 248 | — | 257 | ||||||||||||
Total liabilities | 243 | 3,692 | (98 | ) | 3,837 | |||||||||||
Equity/Attributed net assets | 2,397 | 2,687 | — | 5,084 | ||||||||||||
Noncontrolling interests in equity of subsidiaries | (5 | ) | (1 | ) | — | (6 | ) | |||||||||
Total liabilities and equity | $ | 2,635 | 6,378 | (98 | ) | 8,915 | ||||||||||
Attributed | ||||||||||||||||
Starz Group | Capital Group | Inter-group Eliminations | Consolidated Liberty | |||||||||||||
amounts in millions | ||||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 878 | 1,212 | — | 2,090 | |||||||||||
Trade and other receivables, net | 227 | 30 | — | 257 | ||||||||||||
Program rights | 411 | — | — | 411 | ||||||||||||
Short term marketable securities | 175 | 334 | — | 509 | ||||||||||||
Receivable from Liberty Interactive | — | 85 | — | 85 | ||||||||||||
Other current assets | 55 | 145 | (10 | ) | 190 | |||||||||||
Total current assets | 1,746 | 1,806 | (10 | ) | 3,542 | |||||||||||
Investments in available-for-sale securities and other cost investments | 67 | 4,483 | — | 4,550 | ||||||||||||
Investments in affiliates, accounted for using the equity method | — | 91 | — | 91 | ||||||||||||
Property and equipment, net | 109 | 138 | — | 247 | ||||||||||||
Intangible assets not subject to amortization | 132 | 353 | — | 485 | ||||||||||||
Intangible assets subject to amortization, net | 20 | 144 | — | 164 | ||||||||||||
Program rights | 323 | — | — | 323 | ||||||||||||
Deferred costs | — | 345 | — | 345 | ||||||||||||
Deferred tax assets | — | 382 | (11 | ) | 371 | |||||||||||
Other assets, at cost, net of accumulated amortization | 142 | 532 | — | 674 | ||||||||||||
Total assets | $ | 2,539 | 8,274 | (21 | ) | 10,792 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 8 | 13 | — | 21 | |||||||||||
Accrued liabilities | 185 | 58 | — | 243 | ||||||||||||
Intergroup payable (receivable) | (93 | ) | 93 | — | — | |||||||||||
Financial instruments | 3 | 1,219 | — | 1,222 | ||||||||||||
Current portion of debt | 37 | — | — | 37 | ||||||||||||
Current deferred tax liabilities | — | 722 | (10 | ) | 712 | |||||||||||
Deferred revenue | 16 | 224 | — | 240 | ||||||||||||
Other current liabilities | 12 | 24 | — | 36 | ||||||||||||
Total current liabilities | 168 | 2,353 | (10 | ) | 2,511 | |||||||||||
Long-term debt | 68 | 2,033 | — | 2,101 | ||||||||||||
Deferred income tax liabilities | 11 | — | (11 | ) | — | |||||||||||
Deferred revenue | — | 846 | — | 846 | ||||||||||||
Other liabilities | 46 | 262 | — | 308 | ||||||||||||
Total liabilities | 293 | 5,494 | (21 | ) | 5,766 | |||||||||||
Equity/Attributed net assets | 2,246 | 2,780 | — | 5,026 | ||||||||||||
Noncontrolling interests in equity of subsidiaries | — | — | — | — | ||||||||||||
Total liabilities and equity | $ | 2,539 | 8,274 | (21 | ) | 10,792 | ||||||||||
Attributed | ||||||||||||
Starz Group | Capital Group | Consolidated Liberty | ||||||||||
amounts in millions | ||||||||||||
REVENUE: | ||||||||||||
Communications and programming services | $ | 389 | 151 | 540 | ||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||
Operating | 226 | 97 | 323 | |||||||||
Selling, general and administrative, including stock-based compensation | 62 | 29 | 91 | |||||||||
Depreciation and amortization | 4 | 11 | 15 | |||||||||
292 | 137 | 429 | ||||||||||
Operating income | 97 | 14 | 111 | |||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Interest expense | — | (3 | ) | (3 | ) | |||||||
Share of earnings (losses) of affiliates, net | — | 53 | 53 | |||||||||
Realized and unrealized gains (losses) on financial instruments, net | (5 | ) | (252 | ) | (257 | ) | ||||||
Gains (losses) on dispositions, net | (1 | ) | 2 | 1 | ||||||||
Other, net | (1 | ) | 11 | 10 | ||||||||
(7 | ) | (189 | ) | (196 | ) | |||||||
Earnings (loss) before income taxes | 90 | (175 | ) | (85 | ) | |||||||
Income tax (expense) benefit | (30 | ) | 72 | 42 | ||||||||
Net earnings (loss) | 60 | (103 | ) | (43 | ) | |||||||
Less net earnings (losses) attributable to noncontrolling interests | (1 | ) | — | (1 | ) | |||||||
Net earnings (loss) attributable to Liberty stockholders | $ | 61 | (103 | ) | (42 | ) | ||||||
Attributed | ||||||||||||
Starz Group | Capital Group | Consolidated Liberty | ||||||||||
amounts in millions | ||||||||||||
REVENUE: | ||||||||||||
Communications and programming services | $ | 319 | 251 | 570 | ||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||
Operating | 192 | 157 | 349 | |||||||||
Selling, general and administrative, including stock-based compensation | 43 | 77 | 120 | |||||||||
Depreciation and amortization | 7 | 20 | 27 | |||||||||
242 | 254 | 496 | ||||||||||
Operating income (loss) | 77 | (3 | ) | 74 | ||||||||
OTHER INCOME (EXPENSE): | ||||||||||||
Interest expense | — | (12 | ) | (12 | ) | |||||||
Share of earnings (losses) of affiliates, net | — | (59 | ) | (59 | ) | |||||||
Realized and unrealized gains (losses) on financial instruments, net | — | 70 | 70 | |||||||||
Gains (losses) on dispositions, net | (2 | ) | — | (2 | ) | |||||||
Other, net | 3 | 27 | 30 | |||||||||
1 | 26 | 27 | ||||||||||
Earnings (loss) before income taxes | 78 | 23 | 101 | |||||||||
Income tax (expense) benefit | (30 | ) | 3 | (27 | ) | |||||||
Net earnings (loss) | 48 | 26 | 74 | |||||||||
Less net earnings (loss) attributable to the noncontrolling interests | — | — | — | |||||||||
Net earnings (loss) attributable to Liberty stockholders | $ | 48 | 26 | 74 | ||||||||
Attributed | ||||||||||||
Starz Group | Capital Group | Consolidated Liberty | ||||||||||
amounts in millions | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net earnings (loss) | $ | 180 | 197 | 377 | ||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 14 | 42 | 56 | |||||||||
Amortization of program rights | 523 | — | 523 | |||||||||
Cash payments for programming rights | (599 | ) | — | (599 | ) | |||||||
Stock-based compensation | 12 | 12 | 24 | |||||||||
Cash payments for stock based compensation | (7 | ) | (3 | ) | (10 | ) | ||||||
Noncash interest expense (income) | 2 | (2 | ) | — | ||||||||
Share of (earnings) losses of affiliates, net | — | (3 | ) | (3 | ) | |||||||
Realized and unrealized (gains) losses on financial instruments, net | 4 | 77 | 81 | |||||||||
(Gains) losses on disposition of assets, net | 3 | (2 | ) | 1 | ||||||||
Intergroup tax allocation | 89 | (89 | ) | — | ||||||||
Intergroup tax payments | (31 | ) | 31 | — | ||||||||
Change in tax accounts from Liberty Interactive, net | — | 53 | 53 | |||||||||
Deferred income tax expense | 41 | 84 | 125 | |||||||||
Other noncash charges (credits), net | 76 | (363 | ) | (287 | ) | |||||||
Changes in operating assets and liabilities | ||||||||||||
Current and other assets | (159 | ) | (41 | ) | (200 | ) | ||||||
Payables and other current liabilities | 68 | 107 | 175 | |||||||||
Net cash provided (used) by operating activities | 216 | 100 | 316 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Cash proceeds from dispositions | — | 17 | 17 | |||||||||
Investments in and loans to cost and equity investees | — | (297 | ) | (297 | ) | |||||||
Repayment of loan by cost and equity investees | — | 189 | 189 | |||||||||
Capital expended for property and equipment | (4 | ) | (5 | ) | (9 | ) | ||||||
Net sales of short term investments | 242 | 60 | 302 | |||||||||
Net increase in restricted cash | (5 | ) | (134 | ) | (139 | ) | ||||||
Reattribution of cash to Liberty Interactive | — | (264 | ) | (264 | ) | |||||||
Other investing activities, net | (2 | ) | (2 | ) | (4 | ) | ||||||
Net cash provided (used) by investing activities | 231 | (436 | ) | (205 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Borrowings of debt | 1 | — | 1 | |||||||||
Repayments of debt | (58 | ) | — | (58 | ) | |||||||
Repurchases of Liberty common stock | — | (213 | ) | (213 | ) | |||||||
Intergroup borrowings (payments) | (209 | ) | 209 | — | ||||||||
Other financing activities, net | — | 6 | 6 | |||||||||
Net cash provided (used) by financing activities | (266 | ) | 2 | (264 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 181 | (334 | ) | (153 | ) | |||||||
Cash and cash equivalents at beginning of period | 878 | 1,212 | 2,090 | |||||||||
Cash and cash equivalents at end period | $ | 1,059 | 878 | 1,937 | ||||||||
Attributed | ||||||||||||
Starz Group | Capital Group | Consolidated Liberty | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | amounts in millions | |||||||||||
Net earnings | $ | 166 | (37 | ) | 129 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 16 | 57 | 73 | |||||||||
Amortization of program rights | 551 | — | 551 | |||||||||
Cash payments for programming rights | (507 | ) | — | (507 | ) | |||||||
Stock-based compensation | 14 | 22 | 36 | |||||||||
Cash payments for stock based compensation | (34 | ) | (3 | ) | (37 | ) | ||||||
Noncash interest expense | — | 1 | 1 | |||||||||
Share of (earnings) losses of affiliates, net | — | 70 | 70 | |||||||||
Realized and unrealized (gains) losses on financial instruments, net | 1 | (125 | ) | (124 | ) | |||||||
(Gains) losses on disposition of assets, net | 2 | (24 | ) | (22 | ) | |||||||
Intergroup tax allocation | 89 | (89 | ) | — | ||||||||
Intergroup tax payments | 23 | (23 | ) | — | ||||||||
Change in tax accounts from Liberty Interactive, net | — | 153 | 153 | |||||||||
Deferred income tax expense (benefit) | 10 | 39 | 49 | |||||||||
Other noncash charges, net | 19 | 121 | 140 | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Current and other assets | (114 | ) | (52 | ) | (166 | ) | ||||||
Payables and other current liabilities | (38 | ) | 112 | 74 | ||||||||
Net cash provided (used) by operating activities | 198 | 222 | 420 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Cash proceeds from dispositions | 30 | 29 | 59 | |||||||||
Proceeds (payments) related to settlement of financial instruments | — | 750 | 750 | |||||||||
Investments in and loans to cost and equity investees | — | (288 | ) | (288 | ) | |||||||
Repayment of loan by Liberty | 158 | 158 | 316 | |||||||||
Repayment of loan by equity investee | — | 101 | 101 | |||||||||
Capital expended for property and equipment | (2 | ) | (8 | ) | (10 | ) | ||||||
Net purchases of short term investments | (149 | ) | (278 | ) | (427 | ) | ||||||
Net (increase) decrease in restricted cash | (20 | ) | (13 | ) | (33 | ) | ||||||
Reattribution of cash | 36 | (843 | ) | (807 | ) | |||||||
Other investing activities, net | — | (7 | ) | (7 | ) | |||||||
Net cash provided (used) by investing activities | 53 | (399 | ) | (346 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Borrowings of debt | — | 97 | 97 | |||||||||
Repayments of debt | (3 | ) | (1,015 | ) | (1,018 | ) | ||||||
Repurchases of Liberty common stock | (40 | ) | (587 | ) | (627 | ) | ||||||
Other financing activities, net | 13 | 106 | 119 | |||||||||
Net cash provided (used) by financing activities | (30 | ) | (1,399 | ) | (1,429 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 221 | (1,576 | ) | (1,355 | ) | |||||||
Cash and cash equivalents at beginning of period | 794 | 3,157 | 3,951 | |||||||||
Cash and cash equivalents at end period | $ | 1,015 | 1,581 | 2,596 | ||||||||