EX-99.1 6 lmca-20180331ex991d4c875.htm EX-99.1 Ex 991 LMC Tracking Stock Attribution

Exhibit 99.1

Unaudited Attributed Financial Information for Tracking Stock Groups

The following tables present our assets and liabilities as of March 31, 2018 and revenue and expenses for the three months ended March 31, 2018 and 2017 and cash flows for the three months ended March 31, 2018 and 2017. The tables further present our assets, liabilities, revenue, expenses and cash flows that are intended to be attributed to the Liberty SiriusXM Group, Liberty Braves Group (“Braves Group”) and the Liberty Formula One Group (“Formula One Group”), respectively. The financial information should be read in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2018 included in this Quarterly Report on Form 10-Q.

Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the Liberty SiriusXM Group, Braves Group and the Formula One Group, our tracking stock capital structure does not affect the ownership or the respective legal title to our assets or responsibility for our liabilities. We and our subsidiaries are each responsible for our respective liabilities. Holders of Liberty SiriusXM common stock, Liberty Braves common stock and Liberty Formula One common stock are holders of our common stock and are subject to risks associated with an investment in our company and all of our businesses, assets and liabilities. The issuance of Liberty SiriusXM common stock, Liberty Braves and Liberty Formula One common stock does not affect the rights of our creditors.

 

 

1

 


 

 

SUMMARY ATTRIBUTED FINANCIAL DATA

 

Liberty SiriusXM Group

 

Summary Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

 

2018

 

2017

 

 

 

amounts in millions

 

Cash and cash equivalents

 

$

658

 

 

615

 

Investments in affiliates, accounted for using the equity method

 

$

651

 

 

672

 

Intangible assets not subject to amortization

 

$

23,778

 

 

23,778

 

Intangible assets subject to amortization, net

 

$

964

 

 

972

 

Total assets

 

$

28,958

 

 

28,530

 

Deferred revenue

 

$

1,910

 

 

1,882

 

Long-term debt, including current portion

 

$

7,956

 

 

7,496

 

Deferred tax liabilities

 

$

1,523

 

 

1,447

 

Attributed net assets

 

$

10,945

 

 

10,861

 

Noncontrolling interest

 

$

5,490

 

 

5,615

 

 

Summary Statement of Operations Data:

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2018

 

2017

 

 

 

amounts in millions

Revenue

 

$

1,375

 

1,294

 

Cost of subscriber services (1)

 

$

(534)

 

(497)

 

Other operating expenses (1)

 

$

(31)

 

(24)

 

Selling, general and administrative expense (1)

 

$

(202)

 

(184)

 

Operating income (loss)

 

$

396

 

372

 

Interest expense

 

$

(97)

 

(84)

 

Income tax (expense) benefit

 

$

(81)

 

(108)

 

Net earnings (loss) attributable to noncontrolling interests

 

$

82

 

65

 

Earnings (loss) attributable to Liberty stockholders

 

$

200

 

124

 


(1)

Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2018

 

2017

 

 

 

amounts in millions

 

Cost of subscriber services

 

$

10

 

9

 

Other operating expenses

 

 

4

 

4

 

Selling, general and administrative expense

 

 

26

 

21

 

 

 

$

40

 

34

 

 

2

 


 

 

Braves Group

 

Summary Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

 

2018

 

2017

 

 

 

amounts in millions

 

Cash and cash equivalents

 

$

114

 

 

132

 

Property and equipment, net

 

$

1,174

 

 

1,099

 

Investments in affiliates, accounted for using the equity method

 

$

97

 

 

145

 

Intangible assets not subject to amortization

 

$

323

 

 

323

 

Intangible assets subject to amortization, net

 

$

49

 

 

49

 

Total assets

 

$

1,947

 

 

1,866

 

Deferred revenue

 

$

140

 

 

51

 

Long-term debt, including current portion

 

$

599

 

 

662

 

Deferred tax liabilities

 

$

68

 

 

62

 

Attributed net assets

 

$

377

 

 

413

 

 

Summary Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2018

 

2017

 

 

 

amounts in millions

 

Revenue

 

$

28

 

 5

 

Selling, general and administrative expense (1)

 

$

(23)

 

(19)

 

Operating income (loss)

 

$

(51)

 

(33)

 

Share of earnings (losses) of affiliates, net

 

$

 3

 

 3

 

Income tax (expense) benefit

 

$

 6

 

 6

 

Earnings (loss) attributable to Liberty stockholders

 

$

(52)

 

(49)

 


(1)

Includes stock-based compensation of $0 and $2 million for the three months ended March 31, 2018 and 2017, respectively.

 

 

3

 


 

 

Formula One Group

 

Summary Balance Sheet Data:

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

 

2018

 

2017

 

 

 

amounts in millions

 

Cash and cash equivalents

 

$

270

 

 

282

 

Investments in debt and equity securities

 

$

534

 

 

526

 

Investments in affiliates, accounted for using the equity method

 

$

910

 

 

933

 

Intangible assets not subject to amortization

 

$

3,956

 

 

3,956

 

Intangible assets subject to amortization, net

 

$

5,002

 

 

5,110

 

Total assets

 

$

11,842

 

 

11,802

 

Long-term debt, including current portion

 

$

5,558

 

 

5,796

 

Attributed net assets

 

$

5,655

 

 

5,669

 

 

Summary Statement of Operations Data:

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2018

 

2017

 

 

 

amounts in millions

 

Revenue

 

$

114

 

96

 

Cost of Formula 1 revenue

 

$

81

 

68

 

Selling, general and administrative expense (1)

 

$

(40)

 

(36)

 

Operating income (loss)

 

$

(118)

 

(80)

 

Interest expense

 

$

(47)

 

(56)

 

Share of earnings (losses) of affiliates, net

 

$

(12)

 

(10)

 

Realized and unrealized gains (losses) on financial instruments, net

 

$

95

 

(12)

 

Income tax (expense) benefit

 

$

60

 

26

 

Earnings (loss) attributable to Liberty stockholders

 

$

(17)

 

(96)

 


(1)

Includes stock-based compensation of $6 million and $8 million for the three months ended March 31, 2018 and 2017, respectively.

4

 


 

 

BALANCE SHEET INFORMATION

March 31, 2018

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

 

 

 

Liberty

 

 

 

 

 

 

 

 

 

 

 

SiriusXM

 

Braves

 

Formula One

 

Inter-Group

 

Consolidated

 

 

    

Group

 

Group

 

Group

 

Eliminations

 

Liberty

    

 

 

amounts in millions

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

658

 

114

 

270

 

 —

 

1,042

 

Trade and other receivables, net

 

 

245

 

80

 

69

 

 —

 

394

 

Other current assets

 

 

177

 

82

 

224

 

 —

 

483

 

Total current assets

 

 

1,080

 

276

 

563

 

 —

 

1,919

 

Intergroup interest in the Liberty Braves Group (note 1)

 

 

 —

 

 —

 

207

 

(207)

 

 —

 

Investments in debt and equity securities (note 1)

 

 

1,031

 

 8

 

534

 

 —

 

1,573

 

Investments in affiliates, accounted for using the equity method (note 1)

 

 

651

 

97

 

910

 

 —

 

1,658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, at cost

 

 

2,307

 

1,238

 

182

 

 —

 

3,727

 

Accumulated depreciation

 

 

(973)

 

(64)

 

(87)

 

 —

 

(1,124)

 

 

 

 

1,334

 

1,174

 

95

 

 —

 

2,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets not subject to amortization

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

14,247

 

180

 

3,956

 

 —

 

18,383

 

FCC licenses

 

 

8,600

 

 —

 

 —

 

 —

 

8,600

 

Other

 

 

931

 

143

 

 —

 

 —

 

1,074

 

 

 

 

23,778

 

323

 

3,956

 

 —

 

28,057

 

Intangible assets subject to amortization, net

 

 

964

 

49

 

5,002

 

 —

 

6,015

 

Other assets

 

 

120

 

20

 

575

 

 —

 

715

 

Total assets

 

$

28,958

 

1,947

 

11,842

 

(207)

 

42,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Intergroup payable (receivable) (note 3)

 

$

(3)

 

(44)

 

47

 

 —

 

 —

 

Accounts payable and accrued liabilities

 

 

852

 

68

 

144

 

 —

 

1,064

 

Current portion of debt (note 1)

 

 

 5

 

31

 

 —

 

 —

 

36

 

Deferred revenue

 

 

1,910

 

140

 

413

 

 —

 

2,463

 

Other current liabilities

 

 

 4

 

 9

 

11

 

 —

 

24

 

Total current liabilities

 

 

2,768

 

204

 

615

 

 —

 

3,587

 

Long-term debt (note 1)

 

 

7,951

 

568

 

5,558

 

 —

 

14,077

 

Deferred income tax liabilities

 

 

1,523

 

68

 

(81)

 

 —

 

1,510

 

Redeemable intergroup interest (note 1)

 

 

 —

 

207

 

 —

 

(207)

 

 —

 

Other liabilities

 

 

281

 

518

 

92

 

 —

 

891

 

Total liabilities

 

 

12,523

 

1,565

 

6,184

 

(207)

 

20,065

 

Equity / Attributed net assets

 

 

10,945

 

377

 

5,655

 

 —

 

16,977

 

Noncontrolling interests in equity of subsidiaries

 

 

5,490

 

 5

 

 3

 

 —

 

5,498

 

Total liabilities and equity

 

$

28,958

 

1,947

 

11,842

 

(207)

 

42,540

 

5

 


 

 

STATEMENT OF OPERATIONS INFORMATION

Three months ended March 31, 2018

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

 

Liberty

 

 

 

 

 

 

 

 

 

SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Subscriber revenue

 

$

1,117

 

 —

 

 —

 

1,117

 

Formula 1 revenue

 

 

 —

 

 —

 

114

 

114

 

Other revenue

 

 

258

 

28

 

 —

 

286

 

Total revenue

 

 

1,375

 

28

 

114

 

1,517

 

Operating costs and expenses, including stock-based compensation (note 2):

 

 

 

 

 

 

 

 

 

 

Cost of subscriber services (exclusive of depreciation shown separately below):

 

 

 

 

 

 

 

 

 

 

Revenue share and royalties

 

 

310

 

 —

 

 —

 

310

 

Programming and content

 

 

101

 

 —

 

 —

 

101

 

Customer service and billing

 

 

94

 

 —

 

 —

 

94

 

Other

 

 

29

 

 —

 

 —

 

29

 

Cost of Formula 1 revenue

 

 

 —

 

 —

 

81

 

81

 

Subscriber acquisition costs

 

 

123

 

 —

 

 —

 

123

 

Other operating expenses

 

 

31

 

40

 

 —

 

71

 

Selling, general and administrative

 

 

202

 

23

 

40

 

265

 

Depreciation and amortization

 

 

89

 

16

 

111

 

216

 

 

 

 

979

 

79

 

232

 

1,290

 

Operating income (loss)

 

 

396

 

(51)

 

(118)

 

227

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(97)

 

(6)

 

(47)

 

(150)

 

Share of earnings (losses) of affiliates, net

 

 

 1

 

 3

 

(12)

 

(8)

 

Realized and unrealized gains (losses) on financial instruments, net

 

 

58

 

 —

 

95

 

153

 

Unrealized gains (losses) on intergroup interest (note 1)

 

 

 —

 

(5)

 

 5

 

 —

 

Other, net

 

 

 5

 

 1

 

 —

 

 6

 

 

 

 

(33)

 

(7)

 

41

 

 1

 

Earnings (loss) before income taxes

 

 

363

 

(58)

 

(77)

 

228

 

Income tax (expense) benefit

 

 

(81)

 

 6

 

60

 

(15)

 

Net earnings (loss)

 

 

282

 

(52)

 

(17)

 

213

 

Less net earnings (loss) attributable to the noncontrolling interests

 

 

82

 

 —

 

 —

 

82

 

Net earnings (loss) attributable to Liberty stockholders

 

$

200

 

(52)

 

(17)

 

131

 

6

 


 

 

STATEMENT OF OPERATIONS INFORMATION

Three months ended March 31, 2017

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

 

Liberty

 

 

 

 

 

 

 

 

 

SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Subscriber revenue

 

$

1,078

 

 —

 

 —

 

1,078

 

Formula 1 revenue

 

 

 —

 

 —

 

96

 

96

 

Other revenue

 

 

216

 

 5

 

 —

 

221

 

Total revenue

 

 

1,294

 

 5

 

96

 

1,395

 

Operating costs and expenses, including stock-based compensation (note 2):

 

 

 

 

 

 

 

 

 

 

Cost of subscriber services (exclusive of depreciation shown separately below):

 

 

 

 

 

 

 

 

 

 

Revenue share and royalties

 

 

277

 

 —

 

 —

 

277

 

Programming and content

 

 

96

 

 —

 

 —

 

96

 

Customer service and billing

 

 

97

 

 —

 

 —

 

97

 

Other

 

 

27

 

 —

 

 —

 

27

 

Cost of Formula 1 revenue

 

 

 —

 

 —

 

68

 

68

 

Subscriber acquisition costs

 

 

127

 

 —

 

 —

 

127

 

Other operating expenses

 

 

24

 

17

 

 —

 

41

 

Selling, general and administrative

 

 

184

 

19

 

36

 

239

 

Depreciation and amortization

 

 

90

 

 2

 

72

 

164

 

 

 

 

922

 

38

 

176

 

1,136

 

Operating income (loss)

 

 

372

 

(33)

 

(80)

 

259

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(84)

 

 —

 

(56)

 

(140)

 

Share of earnings (losses) of affiliates, net

 

 

 3

 

 3

 

(10)

 

(4)

 

Realized and unrealized gains (losses) on financial instruments, net

 

 

 —

 

 —

 

(12)

 

(12)

 

Unrealized gains (losses) on intergroup interest (note 1)

 

 

 —

 

(28)

 

28

 

 —

 

Other, net

 

 

 6

 

 3

 

 8

 

17

 

 

 

 

(75)

 

(22)

 

(42)

 

(139)

 

Earnings (loss) before income taxes

 

 

297

 

(55)

 

(122)

 

120

 

Income tax (expense) benefit

 

 

(108)

 

 6

 

26

 

(76)

 

Net earnings (loss)

 

 

189

 

(49)

 

(96)

 

44

 

Less net earnings (loss) attributable to the noncontrolling interests

 

 

65

 

 —

 

 —

 

65

 

Net earnings (loss) attributable to Liberty stockholders

 

$

124

 

(49)

 

(96)

 

(21)

 

 

7

 


 

 

 

STATEMENT OF CASH FLOWS INFORMATION

Three months ended March 31, 2018

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

 

Liberty

 

 

 

 

 

 

 

 

 

SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

282

 

(52)

 

(17)

 

213

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

89

 

16

 

111

 

216

 

Stock-based compensation

 

 

40

 

 —

 

 6

 

46

 

Share of (earnings) loss of affiliates, net

 

 

(1)

 

(3)

 

12

 

 8

 

Unrealized (gains) losses on intergroup interest, net

 

 

 —

 

 5

 

(5)

 

 —

 

Realized and unrealized (gains) losses on financial instruments, net

 

 

(58)

 

 —

 

(95)

 

(153)

 

Noncash interest expense (benefit)

 

 

(1)

 

 1

 

 —

 

 —

 

Deferred income tax expense (benefit)

 

 

73

 

(2)

 

(51)

 

20

 

Intergroup tax allocation

 

 

 —

 

(4)

 

 4

 

 —

 

Other charges (credits), net

 

 

 —

 

11

 

 6

 

17

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

Current and other assets

 

 

(12)

 

(17)

 

(68)

 

(97)

 

Payables and other liabilities

 

 

(19)

 

97

 

276

 

354

 

Net cash provided (used) by operating activities

 

 

393

 

52

 

179

 

624

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Investments in equity method affiliates and debt and equity securities

 

 

(389)

 

 —

 

(4)

 

(393)

 

Cash proceeds from sale of investments

 

 

 —

 

 —

 

 9

 

 9

 

Capital expended for property and equipment

 

 

(82)

 

(6)

 

(1)

 

(89)

 

Other investing activities, net

 

 

 —

 

37

 

12

 

49

 

Net cash provided (used) by investing activities

 

 

(471)

 

31

 

16

 

(424)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

1,021

 

 7

 

289

 

1,317

 

Repayments of debt

 

 

(569)

 

(89)

 

(496)

 

(1,154)

 

Series C Liberty SiriusXM stock repurchases

 

 

(31)

 

 —

 

 —

 

(31)

 

Subsidiary shares repurchased by subsidiary

 

 

(309)

 

 —

 

 —

 

(309)

 

Cash dividends paid by subsidiary

 

 

(15)

 

 —

 

 —

 

(15)

 

Taxes paid in lieu of shares issued for stock-based compensation

 

 

(27)

 

 —

 

(1)

 

(28)

 

Other financing activities, net

 

 

51

 

 —

 

(1)

 

50

 

Net cash provided (used) by financing activities

 

 

121

 

(82)

 

(209)

 

(170)

 

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

 

 

 —

 

 —

 

 2

 

 2

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

43

 

 1

 

(12)

 

32

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

625

 

140

 

282

 

1,047

 

Cash, cash equivalents and restricted cash at end of period

 

$

668

 

141

 

270

 

1,079

 

8

 


 

 

STATEMENT OF CASH FLOWS INFORMATION

Three months ended March 31, 2017

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

 

Liberty

 

 

 

 

 

 

 

 

 

SiriusXM

 

Braves

 

Formula One

 

Consolidated

 

 

 

Group

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

189

 

(49)

 

(96)

 

44

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

90

 

 2

 

72

 

164

 

Stock-based compensation

 

 

34

 

 2

 

 8

 

44

 

Share of (earnings) loss of affiliates, net

 

 

(3)

 

(3)

 

10

 

 4

 

Unrealized (gains) losses on intergroup interest, net

 

 

 —

 

28

 

(28)

 

 —

 

Realized and unrealized (gains) losses on financial instruments, net

 

 

 —

 

 —

 

12

 

12

 

Noncash interest expense (benefit)

 

 

 2

 

 —

 

 —

 

 2

 

Deferred income tax expense (benefit)

 

 

107

 

31

 

(12)

 

126

 

Intergroup tax allocation

 

 

(5)

 

(37)

 

42

 

 —

 

Other charges (credits), net

 

 

 4

 

 —

 

(2)

 

 2

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

Current and other assets

 

 

(14)

 

(15)

 

37

 

 8

 

Payables and other liabilities

 

 

(100)

 

53

 

44

 

(3)

 

Net cash provided (used) by operating activities

 

 

304

 

12

 

87

 

403

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Investments in equity method affiliates and debt and equity securities

 

 

 —

 

(2)

 

(3)

 

(5)

 

Net cash paid for the acquisition of Formula 1

 

 

 —

 

 —

 

(1,647)

 

(1,647)

 

Capital expended for property and equipment

 

 

(54)

 

(102)

 

 —

 

(156)

 

Other investing activities, net

 

 

(7)

 

18

 

 —

 

11

 

Net cash provided (used) by investing activities

 

 

(61)

 

(86)

 

(1,650)

 

(1,797)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

330

 

114

 

1,400

 

1,844

 

Repayments of debt

 

 

(194)

 

(32)

 

(928)

 

(1,154)

 

Proceeds from issuance of Series C Liberty Formula One common stock

 

 

 —

 

 —

 

1,550

 

1,550

 

Subsidiary shares repurchased by subsidiary

 

 

(306)

 

 —

 

 —

 

(306)

 

Cash dividends paid by subsidiary

 

 

(15)

 

 —

 

 —

 

(15)

 

Taxes paid in lieu of shares issued for stock-based compensation

 

 

(20)

 

 —

 

(2)

 

(22)

 

Other financing activities, net

 

 

 5

 

 —

 

 —

 

 5

 

Net cash provided (used) by financing activities

 

 

(200)

 

82

 

2,020

 

1,902

 

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

 

 

 —

 

 —

 

 1

 

 1

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

43

 

 8

 

458

 

509

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

297

 

107

 

168

 

572

 

Cash, cash equivalents and restricted cash at end of period

 

$

340

 

115

 

626

 

1,081

 

 

 

 

 

9

 


 

Notes to Attributed Financial Information (Continued)

(unaudited)

 

 

 

 

(1)

A tracking stock is a type of common stock that the issuing company intends to reflect or "track" the economic performance of a particular business or "group," rather than the economic performance of the company as a whole. While the Liberty SiriusXM Group, Liberty Braves Group (the “Braves Group”) and Formula One 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. Therefore, the Liberty SiriusXM Group, Braves Group and Formula One Group do not represent separate legal entities, but rather represent those businesses, assets and liabilities that have been attributed to each respective group. 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 company, such as Sirius XM Holdings Inc. (“SIRIUS XM”), Formula 1 or Live Nation Entertainment, Inc. (“Live Nation”), in which Liberty holds an interest and that is attributed to a Liberty tracking stock group, such as the Liberty SiriusXM Group or the Formula One 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.

The Liberty SiriusXM Group is comprised of our consolidated subsidiary, SIRIUS XM, corporate cash, Liberty’s 2.125% Exchangeable Senior Debentures due 2048 and its margin loan obligation incurred by a wholly-owned special purpose subsidiary of Liberty. As of March 31, 2018, the Liberty SiriusXM Group has cash and cash equivalents of approximately $658 million, which includes $79 million of subsidiary cash.

The Braves Group is comprised of our consolidated subsidiary, Braves Holdings, LLC (“Braves Holdings”), which indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC”) and certain assets and liabilities associated with ANLBC’s stadium and mixed use development project (the “Development Project”) and cash. As of March 31, 2018, the Braves Group has cash and cash equivalents of approximately $114 million, which includes subsidiary cash.

The Formula One Group is comprised of all of the businesses, assets and liabilities of Liberty other than those specifically attributed to the Liberty SiriusXM Group or the Braves Group, including Liberty’s interests in Formula 1 and Live Nation Entertainment, Inc. (“Live Nation”), a minority equity investment in Time Warner Inc. (“Time Warner”),  cash, an intergroup interest in the Braves Group, Liberty’s 1.375% Cash Convertible Notes due 2023 and related financial instruments,  Liberty’s 2.25% Exchangeable Senior Debentures due 2046 and Liberty’s 1% Cash Convertible Notes due 2023. As of March 31, 2018, the Formula One Group has cash and cash equivalents of approximately $270 million, which includes $140 million of cash held by Formula 1.

The number of notional shares representing the intergroup interest held by the Formula One Group is 9,084,940, representing a 15.1% intergroup interest in the Braves Group as of March 31, 2018. The intergroup interest is a quasi-equity interest which is not represented by outstanding shares of common stock; rather, the Formula One Group has an attributed value in the Braves Group which is generally stated in terms of a number of shares of stock issuable to the Formula One Group with respect to its interest in the Braves Group. Each reporting period, the notional shares representing the intergroup interest are marked to fair value. The change in fair value is recorded in the Unrealized gain (loss) on intergroup interest line item in the unaudited attributed condensed consolidated statements of operations. The Formula One Group’s intergroup interest is reflected in the Investment in intergroup interest line item, and the Braves Group liability for the intergroup interest is reflected in the Redeemable intergroup interest line item in the unaudited attributed condensed consolidated balance sheets. Both accounts are presented as noncurrent, as there are currently no plans for the settlement of the intergroup interest. Appropriate eliminating entries are recorded in the Company’s condensed consolidated financial statements.

As the notional shares underlying the intergroup interest are not represented by outstanding shares of common stock, such shares have not been officially designated Series A, B or C Liberty Braves common stock. However, Liberty has assumed that the notional shares (if and when issued) would be comprised of Series C Liberty Braves common stock in order to not dilute voting percentages. Therefore, the market price of Series C Liberty Braves common stock is used for the quarterly mark-to-market adjustment through the unaudited attributed condensed consolidated statements of operations.

10

 


 

Notes to Attributed Financial Information (Continued)

(unaudited)

 

 

The intergroup interest will remain outstanding until the redemption of the outstanding interest, at the discretion of the Company’s Board of Directors, through transfer of securities, cash and/or other assets from the Braves Group to the Formula One Group.  

For information relating to investments in debt and equity securities, investments in affiliates accounted for using the equity method and debt, see notes 8, 9 and 11, respectively, of the accompanying condensed consolidated financial statements.

(2)

Cash compensation expense for our corporate employees is allocated among the Liberty SiriusXM Group, Braves Group and the Formula One Group based on the estimated percentage of time spent providing services for each group. On an annual basis estimated time spent is determined through an interview process and a review of personnel duties unless transactions significantly change the composition of companies and investments in either respective group which would require a timelier reevaluation of estimated time spent. Other general and administrative expenses are charged directly to the groups whenever possible and are otherwise allocated based on estimated usage or some other reasonably determined methodology. Following the Recapitalization, stock compensation related to each tracking stock is calculated based on actual awards outstanding.

 

While we believe that this allocation method is reasonable and fair to each group, we may elect to change the allocation methodology or percentages used to allocate general and administrative expenses in the future.

(3)

Except for the intergroup arrangements regarding the securities held by the Formula One Group pledged as collateral pursuant to a loan at the Braves Group as discussed in note 11 of the accompanying condensed consolidated financial statements, the intergroup balance at March 31, 2018 and December 31, 2017 is primarily a result of timing of tax benefits.

(4)

The Liberty SiriusXM common stock, Liberty Braves common stock and Liberty Formula One common stock have voting and conversion rights under our restated charter. Following is a summary of those rights. Holders of Series A common stock of each group are entitled to one vote per share, and holders of Series B common stock of each group are entitled to ten votes per share. Holders of Series C common stock of each group are entitled to 1/100th of a vote per share in certain limited cases and will otherwise not be entitled to vote. In general, holders of Series A and Series B common stock vote as a single class. In certain limited circumstances, the board may elect to seek the approval of the holders of only Series A and Series B Liberty SiriusXM common stock, only Series A and Series B Liberty Braves common stock, or only Series A and Series B Liberty Formula One common stock.

 

At the option of the holder, each share of Series B common stock of each group will be convertible into one share of Series A common stock of the same group. At the discretion of our board, the common stock related to one group may be converted into common stock of the same series that is related to another other group.

 

11