Liberty Media Corporation 2018 Annual Report & Proxy Statement
Liberty Media Corporation 2018 Annual Report & Proxy Statement
Proxy
REPORT
STATEMENT 2019
2018
Annual
Proxy
REPORT
STATEMENT
LETTER TO SHAREHOLDERS
STOCK PERFORMANCE
INVESTMENT SUMMARY
PROXY STATEMENT
FINANCIAL INFORMATION
CORPORATE DATA
ENVIRONMENTAL STATEMENT
Certain statements in this Annual Report constitute forward-looking • changes in the nature of key strategic relationships with partners,
statements within the meaning of the Private Securities Litigation Reform vendors and joint venturers;
Act of 1995, including statements regarding our business, product and
• general economic and business conditions and industry trends;
marketing strategies and initiatives; new service offerings; revenue
and subscriber growth at Sirius XM Holdings Inc. (“SIRIUS XM”); the • consumer spending levels, including the availability and amount of
recoverability of our goodwill and other long-lived assets; the performance individual consumer debt;
of our equity affiliates; our projected sources and uses of cash; the
• rapid technological changes;
payment of dividends by SIRIUS XM; the expected benefits of SIRIUS XM’s
acquisition of Pandora; the continuation of our stock repurchase program; • impairments of third-party intellectual property rights;
monetization of sports media rights; plans for the Battery Atlanta; the
• our indebtedness could adversely affect operations and could limit the
anticipated non-material impact of certain contingent liabilities related to
ability of our subsidiaries to react to changes in the economy or our
legal and tax proceedings; and other matters arising in the ordinary course
industry;
of business. In particular, statements in our “Letter to Shareholders” and
under “Management’s Discussion and Analysis of Financial Condition • failure to protect the security of personal information about our
and Results of Operations” and “Quantitative and Qualitative Disclosures businesses’ customers, subjecting our businesses to potentially costly
About Market Risk” contain forward looking statements. Where, in any government enforcement actions or private litigation and reputational
forward-looking statement, we express an expectation or belief as to future damage;
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 regulatory and competitive environment of the industries
the expectation or belief will result or be achieved or accomplished. The in which we, and the entities in which we have interests, operate; and
following include some but not all of the factors that could cause actual • threatened terrorist attacks, political unrest in international markets and
results or events to differ materially from those anticipated: ongoing military action around the world.
• consumer demand for our products and services and our ability to adapt
These forward-looking statements and such risks, uncertainties and other
to changes in demand;
factors speak only as of the date of this Annual Report, and we expressly
• competitor responses to our businesses’ products and services; disclaim any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement contained herein, to reflect
• uncertainties inherent in the development and integration
any change in our expectations with regard thereto, or any other change
of new business lines and business strategies;
in events, conditions or circumstances on which any such statement is
• uncertainties associated with product and service development and based. When considering such forward-looking statements, you should
market acceptance, including the development and provision of keep in mind any risk factors identified and other cautionary statements
programming for satellite radio and telecommunications technologies; contained in this Annual Report and in our publicly filed documents,
including our most recent Forms 10-K and 10-Q. Such risk factors and
• our businesses’ significant dependence upon automakers;
statements describe circumstances which could cause actual results to
• our businesses’ ability to attract and retain subscribers in the future is differ materially from those contained in any forward-looking statement.
uncertain; This Annual Report includes information concerning public companies in
which we have controlling and non-controlling interests that file reports
• our future financial performance, including availability, terms and and other information with the Securities and Exchange Commission
deployment of capital; (the “SEC”) in accordance with the Securities Exchange Act of 1934, as
• our ability to successfully integrate and recognize anticipated efficiencies amended. Information contained in this Annual Report concerning those
and benefits from the businesses we acquire; companies has been derived from the reports and other information filed
by them with the SEC. If you would like further information about these
• the ability of suppliers and vendors to deliver products, equipment, companies, the reports and other information they file with the SEC can be
software and services; accessed on the Internet website maintained by the SEC at www.sec.gov.
• interruption or failure of our information technology and communication Those reports and other information are not incorporated by reference in
systems, including the failure of SIRIUS XM’s satellites, could negatively this Annual Report.
impact our results and brand;
#TrackersForLife
We have long been in the tracking stock business. We will continue to be, while ensuring fair treatment across all of our shareholders.
Tracking stocks have proven successful for our shareholders overtime – patience has historically paid off. Still, we recognize the frustration
of the structural discounts.
On one hand, a well-priced stock can enable flexibility as an acquisition currency or as a leverageable asset, though a discounted stock
can provide an attractive repurchase opportunity. The key is generating free cash flow to manage our balance sheet opportunistically.
We will continue to assess the best use of capital, including when the market offers these discounts, particularly at Liberty SiriusXM Group.
Ultimately, we are nimble and prepared to react quickly to take advantage of opportunities - whichever way the markets go.
LOOKING AHEAD
2019 has already delivered its fair share of macro-headlines moving the markets. We remain concentrated on the underlying operations
of our businesses and not short-term bouts of market volatility.
Our near term uses of cash include: continue to de-lever at Formula 1, return capital to shareholders to capitalize on the discount at Liberty
SiriusXM and develop our next phase of real estate at the Battery Atlanta. But we won’t be shy to attack market opportunities as they arise.
We will remain disciplined in our investment thesis - directing our attention and capital on differentiated opportunities with proven business
models and attractive returns. We are comfortable with our liquidity across the trackers and our ability to access additional sources of
capital as needed. Heraclitus must have been alluding to the media industry in saying ‘The only thing that is constant is change.’ And that
is definitely how Liberty is defined – constantly changing. There is no static effort, the landscape is moving quickly and we are prepared to
move accordingly.
We look forward to seeing many of you at this year’s annual investor meeting, which will take place on November 21st at the TimesCenter
at 242 West 41st Street in New York City.
The following graph compares the percentage change in the cumulative total stockholder return on the composite Liberty Media
Series A and Series B common stock (and its successor issuances) from December 31, 2013 through December 31, 2018 to the
S&P 500 Index and the S&P 500 Media Index. On April 15, 2016 our former Series A and Series B common stock was recapitalized
into common stock of three tracking stock groups: the Liberty SiriusXM Group (Nasdaq: LSXMA, LSXMB), the Formula One Group
(Nasdaq: FWONA) (formerly known as the Liberty Media Group (Nasdaq: LMCA)) and the Braves Group (Nasdaq: BATRA). This
chart includes the impact of (i) the distribution of our former Series C shares in July 2014, (ii) the spin-off of Liberty Broadband
Corporation on November 4, 2014, assuming a sale of the resulting Liberty Broadband shares on the one-year anniversary of the
spin-off and reinvestment of the proceeds in our common stock, (iii) the Liberty Broadband rights offering, assuming the value of the
Liberty Broadband rights on the one-year anniversary of the spin-off was reinvested in our common stock, (iv) the aforementioned
recapitalization of Liberty Media’s common stock into three tracking stock groups and (v) the Braves Group rights offering.
$200
$100
$0
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
LIBERTY MEDIA SERIES A COMPOSITE LIBERTY MEDIA SERIES B COMPOSITE S&P 500 INDEX S&P 500 MEDIA INDEX
Note: Trading data for all Series B shares is limited as they are thinly traded.
The following graph compares the percentage change in the cumulative total stockholder return on our former Series C common
stock (and its successor issuances) from July 24, 2014 (the date on which the former Series C common stock first traded “regular
way”) through December 31, 2018 to the S&P 500 Index and the S&P 500 Media Index. On April 15, 2016 our former Series C
common stock was recapitalized into common stock of three tracking stock groups: the Liberty SiriusXM Group (Nasdaq: LSXMK),
the Formula One Group (Nasdaq: FWONK) (formerly known as the Liberty Media Group (Nasdaq: LMCK)) and the Braves Group
(Nasdaq: BATRK). This chart includes (i) the impact of the spin-off of Liberty Broadband Corporation on November 4, 2014, assuming
a sale of the resulting Liberty Broadband shares on the one-year anniversary of the spin-off and reinvestment of the proceeds in
our common stock, (ii) the Liberty Broadband rights offering, assuming the value of the Liberty Broadband rights on the one-year
anniversary of the spin-off was reinvested in our common stock, (iii) the aforementioned recapitalization of Liberty Media’s common
stock into three tracking stock groups and (iv) the Braves Group rights offering.
$150
$135
$120
$105
$90
July-14 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
LIBERTY MEDIA SERIES C COMPOSITE S&P 500 INDEX S&P 500 MEDIA INDEX
The following graph compares the percentage change in the cumulative total stockholder return on our Series A, Series B and Series
C Liberty SiriusXM common stock (Nasdaq: LSXMA, LSXMB, LSXMK) from April 18, 2016 (the date on which these shares first
traded “regular way”) through December 31, 2018 to the S&P 500 Index and the S&P 500 Media Index.
$160
$150
$140
$130
$120
$110
$100
$90
16
17
18
16
17
18
6
8
r-1
r-1
r-1
g-
g-
g-
c-
c-
c-
Ap
Au
Ap
Au
Ap
Au
De
De
De
SERIES A LIBERTY SIRIUSXM SERIES B LIBERTY SIRIUSXM SERIES C LIBERTY SIRIUSXM
S&P 500 INDEX S&P 500 MEDIA INDEX
Note: Trading data for Series B shares is limited as they are thinly traded.
The following graph compares the percentage change in the cumulative total stockholder return on our Series A and Series C Liberty
Formula One common stock (Nasdaq: FWONA, FWONK) (formerly known as the Liberty Media common stock (Nasdaq: LMCA, LMCK)
from April 18, 2016 (the date on which these shares first traded “regular way”) through December 31, 2018 to the S&P 500 Index
and the S&P 500 Media Index.
$230
$210
$190
$170
$150
$130
$110
$90
16
17
18
16
17
18
6
8
r-1
r-1
r-1
g-
g-
g-
c-
c-
c-
Ap
Au
Ap
Au
Ap
Au
De
De
De
SERIES A LIBERTY FORMULA ONE SERIES C LIBERTY FORMULA ONE S&P 500 INDEX S&P 500 MEDIA INDEX
The following graph compares the percentage change in the cumulative total stockholder return on our Series A and
Series C Liberty Braves common stock (Nasdaq: BATRA, BATRK), including the impact of the Braves Group rights offering, from
April 18, 2016 (the date on which these shares first traded “regular way”) through December 31, 2018 to the S&P 500 Index
and the S&P 500 Media Index.
$200
$180
$160
$140
$120
$100
$80
$60
16
17
18
16
17
18
6
8
r-1
r-1
r-1
g-
g-
g-
c-
c-
c-
Ap
Au
Ap
Au
Ap
Au
De
De
De
SERIES A LIBERTY BRAVES SERIES C LIBERTY BRAVES S&P 500 INDEX S&P 500 MEDIA INDEX
Liberty Media Corporation owns interests in a broad range of media, communications and entertainment businesses. Those interests
are attributed to three tracking stock groups: the Braves Group, Formula One Group and Liberty SiriusXM Group.
The following tables set forth some of Liberty Media Corporation’s assets which may be held directly and indirectly through
partnerships, joint ventures, common stock investments and/or instruments convertible into common stock. Ownership percentages
in the tables are approximate and, where applicable, assume conversion to common stock by Liberty Media Corporation and, to the
extent known by Liberty Media Corporation, other holders. In some cases, Liberty Media Corporation’s interest may be subject to
buy/sell procedures, repurchase rights or dilution.
BRAVES GROUP
ATTRIBUTED
ATTRIBUTED
ENTITY DESCRIPTION OF OPERATING BUSINESS SHARE COUNT(1)
OWNERSHIP(2)
(in millions)
Dear Stockholder:
You are cordially invited to attend the 2019 annual meeting of stockholders of Liberty Media Corporation
(Liberty Media) to be held at 8:00 a.m., local time, on May 30, 2019, at the corporate offices of Liberty Media,
12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5400.
At the annual meeting, you will be asked to consider and vote on the proposals described in the accompanying
notice of annual meeting and proxy statement, as well as on such other business as may properly come before the
meeting.
Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the
annual meeting, please read the enclosed proxy materials and then promptly vote via the Internet or
telephone or by completing, signing and returning by mail the enclosed proxy card. Doing so will not prevent
you from later revoking your proxy or changing your vote at the meeting.
Thank you for your cooperation and continued support and interest in Liberty Media.
Gregory B. Maffei
President and Chief Executive Officer
The proxy materials relating to the annual meeting will first be made available on or about April 29, 2019.
LIBERTY MEDIA CORPORATION
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5400
NOTICE IS HEREBY GIVEN of the annual meeting of stockholders of Liberty Media Corporation (Liberty Media)
to be held at 8:00 a.m., local time, on May 30, 2019, at the corporate offices of Liberty Media, 12300 Liberty
Boulevard, Englewood, Colorado 80112, telephone (720) 875-5400, to consider and vote on the following
proposals:
1. A proposal (which we refer to as the election of directors proposal) to elect John C. Malone,
Robert R. Bennett and M. Ian G. Gilchrist to continue serving as Class III members of our board until
the 2022 annual meeting of stockholders or their earlier resignation or removal; and
2. A proposal (which we refer to as the auditors ratification proposal) to ratify the selection of KPMG LLP
as our independent auditors for the fiscal year ending December 31, 2019.
You may also be asked to consider and vote on such other business as may properly come before the annual
meeting.
Holders of record of our Series A Liberty SiriusXM common stock, par value $0.01 per share, Series A Liberty
Braves common stock, par value $0.01 per share, Series A Liberty Formula One common stock, par value
$0.01 per share, Series B Liberty SiriusXM common stock, par value $0.01 per share, Series B Liberty Braves
common stock, par value $0.01 per share, and Series B Liberty Formula One common stock, par value $0.01 per
share, in each case, outstanding as of 5:00 p.m., New York City time, on April 8, 2019, the record date for the
annual meeting, will be entitled to notice of the annual meeting and to vote at the annual meeting or any
adjournment or postponement thereof. These holders will vote together as a single class on each proposal. A list of
stockholders entitled to vote at the annual meeting will be available at our offices at 12300 Liberty Boulevard,
Englewood, Colorado 80112 for review by our stockholders for any purpose germane to the annual meeting for at
least ten days prior to the annual meeting. The holders of record of our Series C Liberty SiriusXM common stock,
par value $0.01 per share, Series C Liberty Braves common stock, par value $0.01 per share, and Series C Liberty
Formula One common stock, par value $0.01 per share, are not entitled to any voting powers, except as required by
Delaware law, and may not vote on the proposals to be presented at the annual meeting.
We describe the proposals in more detail in the accompanying proxy statement. We encourage you to read the
proxy statement in its entirety before voting.
Our board of directors has unanimously approved each proposal and recommends that you vote “FOR” the election
of each director nominee and “FOR” the auditors ratification proposal.
Votes may be cast in person at the annual meeting or by proxy prior to the meeting by telephone, via the Internet, or
by mail.
Important Notice Regarding the Availability of Proxy Materials For the Annual Meeting of Stockholders to be Held on
May 30, 2019: our Notice of Annual Meeting of Stockholders, Proxy Statement, and 2018 Annual Report to
Stockholders are available at www.proxyvote.com.
YOUR VOTE IS IMPORTANT. Voting promptly, regardless of the number of shares you own, will aid us in reducing
the expense of any further proxy solicitation in connection with the annual meeting.
Pamela L. Coe
Senior Vice President and Secretary
Englewood, Colorado
April 24, 2019
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE PROMPTLY
VIA TELEPHONE OR ELECTRONICALLY VIA THE INTERNET. ALTERNATIVELY, PLEASE COMPLETE, SIGN
AND RETURN BY MAIL THE ENCLOSED PAPER PROXY CARD.
TABLE OF CONTENTS
PROXY STATEMENT SUMMARY MANAGEMENT AND GOVERNANCE MATTERS . . 25
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . 25
THE ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . 1
Section 16(a) Beneficial Ownership Reporting
Electronic Delivery . . . . . . . . . . . . . . . . . . . . . . . 1 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Time, Place and Date . . . . . . . . . . . . . . . . . . . . . 1 Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Director Independence . . . . . . . . . . . . . . . . . . . . 26
Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Composition . . . . . . . . . . . . . . . . . . . . . . . 26
Who May Vote . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Leadership Structure . . . . . . . . . . . . . . . . . 26
Votes Required . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Role in Risk Oversight . . . . . . . . . . . . . . . . 26
Votes You Have . . . . . . . . . . . . . . . . . . . . . . . . . 2
Committees of the Board of Directors . . . . . . . . . 27
Recommendation of Our Board of Directors . . . . . 2
Board Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 31
Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . 2
Director Attendance at Annual Meetings . . . . . . . . 31
Number of Holders . . . . . . . . . . . . . . . . . . . . . . . 2
Voting Procedures for Record Holders . . . . . . . . . 3 Stockholder Communication with Directors . . . . . . 31
Voting Procedures for Shares Held in Street Executive Sessions . . . . . . . . . . . . . . . . . . . . . . . 31
Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 3
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . 32
Revoking a Proxy . . . . . . . . . . . . . . . . . . . ..... 3
Compensation Discussion and Analysis . . . . . . . . 32
Solicitation of Proxies . . . . . . . . . . . . . . . . ..... 4
Summary Compensation Table . . . . . . . . . . . . . . 44
Other Matters to Be Voted on at the Annual
Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 4 Executive Compensation Arrangements . . . . . . . . 46
Grants of Plan-Based Awards . . . . . . . . . . . . . . . 52
SECURITY OWNERSHIP OF CERTAIN Outstanding Equity Awards at Fiscal Year-End . . . 54
BENEFICIAL OWNERS AND MANAGEMENT . .... 5 Option Exercises and Stock Vested . . . . . . . . . . . 56
Security Ownership of Certain Beneficial Nonqualified Deferred Compensation Plans . . . . . 57
Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 5 Potential Payments Upon Termination or
Security Ownership of Management . . . . . . . . . . 12 Change-in-Control . . . . . . . . . . . . . . . . . . . . . . . 57
Changes in Control . . . . . . . . . . . . . . . . . . . . . . . 17
DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . 64
PROPOSALS OF OUR BOARD . . . . . . . . . . . . . . . 18 Nonemployee Directors . . . . . . . . . . . . . . . . . . . . 64
PROPOSAL 1—THE ELECTION OF Director Compensation Table . . . . . . . . . . . . . . . . 66
DIRECTORS PROPOSAL . . . . . . . . . . . . . . . . . . . . 18
EQUITY COMPENSATION PLAN INFORMATION . . 68
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 18
Vote and Recommendation . . . . . . . . . . . . . . . . . 22 CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 70
PROPOSAL 2—THE AUDITORS
RATIFICATION PROPOSAL . . . . . . . . . . . . . . . . . . 23 STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . 70
Audit Fees and All Other Fees . . . . . . . . . . . . . . . 23
Policy on Pre-Approval of Audit and Permissible ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . 70
Non-Audit Services of Independent Auditor . . . . . 23
Vote and Recommendation . . . . . . . . . . . . . . . . . 24
PROXY STATEMENT SUMMARY
2019 ANNUAL MEETING OF STOCKHOLDERS
PURPOSE
At the annual meeting, you will be asked to consider and vote on each of the following:
• the election of directors proposal, to elect John C. Malone, Robert R. Bennett and M. Ian G. Gilchrist to
continue serving as Class III members of our board until the 2022 annual meeting of stockholders or their
earlier resignation or removal; and
• the auditors ratification proposal, to ratify the selection of KPMG LLP as our independent auditors for the fiscal
year ending December 31, 2019.
QUORUM
In order to conduct the business of the annual meeting, a quorum must be present. This means that the holders of
at least a majority of the aggregate voting power represented by the shares of our common stock outstanding on
the record date and entitled to vote at the annual meeting must be represented at the annual meeting either in
person or by proxy. For purposes of determining a quorum, your shares will be included as represented at the
meeting even if you indicate on your proxy that you abstain from voting. If a broker, who is a record holder of
shares, indicates on a form of proxy that the broker does not have discretionary authority to vote those shares on a
particular proposal or proposals, or if those shares are voted in circumstances in which proxy authority is defective
or has been withheld, those shares (broker non-votes) will nevertheless be treated as present for purposes of
determining the presence of a quorum. See “—Voting Procedures for Shares Held in Street Name—Effect of
Broker Non-Votes” below.
VOTES REQUIRED
Each director nominee who receives a plurality of the combined voting power of the outstanding shares of our
common stock present in person or represented by proxy at the annual meeting and entitled to vote on the election
of directors at the annual meeting, voting together as a single class, will be elected to the office.
Approval of the auditors ratification proposal requires the affirmative vote of a majority of the combined voting
power of the outstanding shares of our common stock that are present in person or by proxy, and entitled to vote at
the annual meeting, voting together as a single class.
RECOMMENDATION OF OUR Our board of directors has unanimously approved each of the
BOARD OF DIRECTORS proposals and recommends that you vote “FOR” the election of
each director nominee and “FOR” the auditors ratification proposal.
SHARES OUTSTANDING
As of the record date, an aggregate of approximately 102,866,000 shares of LSXMA, 9,822,000 shares of LSXMB,
10,249,000 shares of BATRA, 982,000 shares of BATRB, 25,680,000 shares of FWONA and 2,453,000 shares of
FWONB were issued and outstanding and entitled to vote at the annual meeting.
NUMBER OF HOLDERS
There were, as of the record date, 1,153 and 65 record holders of LSXMA and LSXMB, respectively, 1,681 and 41
record holders of BATRA and BATRB, respectively, and 817 and 59 record holders of FWONA and FWONB,
respectively (which amounts do not include the number of stockholders whose shares are held of record by banks,
brokers or other nominees, but include each such institution as one holder).
YOUR VOTE IS IMPORTANT. It is recommended that you vote by proxy even if you plan to attend the annual
meeting. You may change your vote at the annual meeting.
If you submit a properly executed proxy without indicating any voting instructions as to a proposal enumerated in
the Notice of Annual Meeting of Stockholders, the shares represented by the proxy will be voted “FOR” the election
of each director nominee and “FOR” the auditors ratification proposal.
If you submit a proxy indicating that you abstain from voting as to a proposal, it will have no effect on the election of
directors proposal and will have the same effect as a vote “AGAINST” the auditors ratification proposal.
If you do not submit a proxy or you do not vote in person at the annual meeting, your shares will not be counted as
present and entitled to vote for purposes of determining a quorum, and your failure to vote will have no effect on
determining whether any of the proposals are approved (if a quorum is present).
REVOKING A PROXY
If you submitted a proxy prior to the start of the annual meeting, you may change your vote by voting in person at
the annual meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to Vote
Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Any signed proxy revocation or later-dated
proxy must be received before the start of the annual meeting. In addition, you may change your vote through the
Internet or by telephone (if you originally voted by the corresponding method) not later than 11:59 p.m., New York
City time, on May 29, 2019.
Your attendance at the annual meeting will not, by itself, revoke a prior vote or proxy from you.
If your shares are held in an account by a broker, bank or other nominee, you should contact your nominee to
change your vote or revoke your proxy.
If you have any further questions about voting or attending the annual meeting, please contact Liberty Media
Investor Relations at (877) 772-1518 or Broadridge at (888) 789-8415.
Unless otherwise indicated, the security ownership information is given as of April 15, 2019 and, in the case
of percentage ownership information, is based upon (1) 102,816,795 LSXMA shares, (2) 9,821,531 LSXMB shares,
(3) 209,079,807 LSXMK shares, (4) 10,244,591 BATRA shares, (5) 981,860 BATRB shares, (6) 39,740,215 BATRK
shares, (7) 25,675,346 FWONA shares, (8) 2,453,485 FWONB shares and (9) 202,887,872 FWONK shares, in
each case, outstanding on February 28, 2019. The percentage voting power is presented on an aggregate basis for
all LSXMA, LSXMB, BATRA, BATRB, FWONA and FWONB shares.
Amount and
Nature of Percent of Voting
Title of Beneficial Series Power
Name and Address of Beneficial Owner Series Ownership (%) (%)
John C. Malone LSXMA 1,167,728(1) 1.1 47.6
c/o Liberty Media Corporation LSXMB 9,455,341(1) 96.3
12300 Liberty Boulevard
Englewood, CO 80112 LSXMK 15,461,807(1) 7.4
(1)
BATRA 116,771 1.1
(1)
BATRB 945,532 96.3
(1)
BATRK 3,027,466 7.6
(1)
FWONA 291,930 1.1
(1)
FWONB 2,363,834 96.4
(1)
FWONK 4,653,362 2.3
(2)
Berkshire Hathaway, Inc. LSXMA 14,860,360 14.5 5.5
3555 Farnam Street LSXMB — —
Omaha, NE 68131
LSXMK 31,090,985(2) 14.9
BATRA — —
BATRB — —
BATRK — —
FWONA — —
FWONB — —
FWONK — —
(3)
BlackRock, Inc. LSXMA 6,484,270 6.3 3.0
55 East 52nd Street LSXMB — —
New York, NY 10055
LSXMK 12,170,640(3) 5.8
BATRA 661,499(3) 6.5
BATRB — —
(3)
BATRK 2,388,512 6.0
(3)
FWONA 1,057,067 4.1
FWONB — —
(3)
FWONK 9,515,547 4.7
Amount and
Nature of Percent of Voting
Title of Beneficial Series Power
Name and Address of Beneficial Owner Series Ownership (%) (%)
GAMCO Investors, Inc. LSXMA 599,959(9) * *
One Corporate Center LSXMB — —
Rye, NY 10580 (9)
LSXMK 674,513 *
(10)
BATRA 1,458,438 14.2
BATRB — —
(9)
BATRK 1,715,205 4.3
(9)
FWONA 137,640 *
FWONB — —
FWONK 190,013(9) *
Ancient Art, L.P. LSXMA — — 1.0
500 West 5th Street LSXMB — —
Suite 1110
Austin, TX 78701 LSXMK — —
BATRA — —
BATRB — —
BATRK — —
(11)
FWONA 2,593,428 10.1
FWONB — —
FWONK — —
(12)
Janus Henderson Group plc LSXMA 27,615 * *
201 Bishopsgate ECM 3AE, LSXMB — —
United Kingdom (12)
LSXMK 62,557 *
BATRA — —
BATRB — —
BATRK — —
FWONA — —
FWONB — —
FWONK 10,225,807(12) 5.0
UBS Group AG LSXMA 265,361(13) * *
Bahnhofstrasse 45 LSXMB — —
Zurich, Switzerland (13)
LSXMK 529,626 *
(13)
BATRA 1,241,525 12.1
BATRB — —
(13)
BATRK 20,775 *
(13)
FWONA 156 *
FWONB — —
(13)
FWONK 516,696 *
(3) Based on (i) Schedule 13G, filed February 11, 2019, by BlackRock, Inc. (BlackRock), a parent holding company, with respect to its
ownership of shares of LSXMK, (ii) three separate filings, each an Amendment No. 2 to Schedule 13G filed February 6, 2019 by
BlackRock, with respect to its ownership of shares of LSXMA, BATRA and BATRK, respectively, and (iii) Form 13F, filed
February 8, 2019, by BlackRock with respect to its ownership of shares of FWONA and FWONK, Blackrock has sole voting power,
shared voting power, sole dispositive power/investment discretion, and shared dispositive power/investment discretion over these
shares as provided in the following table. All shares covered by such filings are held by BlackRock and/or its subsidiaries.
Sole Shared
Dispositive Dispositive
Shared Power/ Power/
Title of Sole Voting Voting Investment Investment
Series Power Power Discretion Discretion
LSXMA 5,767,555 — 6,484,270 —
LSXMK 10,561,150 — 12,170,640 —
BATRA 635,065 — 661,499 —
BATRK 2,312,691 — 2,388,512 —
FWONA 972,695 — 1,057,067 —
FWONK 8,310,031 — 9,515,547 —
(4) Based on Amendment No. 1 to Form 13F, filed March 4, 2019, by Norges Bank (Norges), which states that Norges has: sole
investment discretion and sole voting power over 2,260,630 LSXMA shares; sole investment discretion and sole voting power over
1,494,577 LSXMK shares; sole investment discretion and sole voting power over 569,036 BATRA shares; sole investment
discretion and sole voting power over 224,015 BATRK shares; sole investment discretion and sole voting power over 710,649
FWONA shares; and sole investment discretion and sole voting power over 3,380,383 FWONK shares.
(5) Based on four separate filings, each an Amendment No. 2 to Schedule 13G filed February 12, 2019 by The Vanguard Group
(Vanguard), which state that Vanguard, with respect to its ownership of shares of each of LSXMA, LSXMK, FWONA and FWONK,
has sole voting power, shared voting power, sole dispositive power, and shared dispositive power over these shares as follows:
(11) Based on Amendment No. 1 to Schedule 13G, filed February 11, 2019, jointly by Ancient Art, L.P., Trango II, L.L.C., and Quincy J.
Lee, which states that, with respect to FWONA shares, each has shared voting power and shared dispositive power over 2,593,428
shares.
(12) Based on (i) Schedule 13G, filed February 12, 2019, by Janus Henderson Group plc (Janus Henderson), a parent holding
company, which states that, with respect to FWONK shares, Janus Henderson has shared voting power and shared dispositive
power over 10,255,807 shares, and (ii) Form 13F, filed February 6, 2019, by Janus Henderson, with respect to itself and certain
related institutional investment managers, including Intech Investment Management LLC (Intech), which Form 13F reports sole
voting power, shared voting power, sole investment discretion, and shared investment discretion as follows:
(13) Based on (i) Amendment No. 1 to Schedule 13G, filed April 2, 2019, by UBS Group AG (UBS Group), a parent holding company,
on behalf of UBS Asset Management Americas Inc. (UBS Americas) which states that, with respect to BATRA shares held by
UBS Americas and/or its subsidiaries, UBS Americas has sole voting power over 1,184,890 shares and shared dispositive power
over 1,241,525 shares, and (ii) Form 13F, filed February 13, 2019, by UBS Americas, with respect to itself and certain related
institutional investment managers, including UBS Group, UBS Asset Management Trust Company (UBS AM Trust), UBS AG/UBS
Asset Management (UBS AG), UBS Asset Management (UK) Ltd (UBS UK), and UBS Asset Management Life Ltd (UBS Life),
which Form 13F reports sole voting power, shared voting power, sole investment discretion, and shared investment discretion as
follows:
(14) Based on (i) Schedule 13G, filed February 14, 2019, jointly by Southeastern Asset Management, Inc. (Southeastern), Longleaf
Partners Small-Cap Fund (Longleaf), and O. Mason Hawkins, which states that, with respect to FWONA shares, each of
Southeastern and Longleaf has shared voting power and shared dispositive power over 2,322,149 shares and Southeastern has
sole dispositive power over 20,866 shares, and (ii) Form 13F, filed February 14, 2019, by Southeastern, with respect to itself and
certain related institutional investment managers, including Longleaf, which Form 13F reports, with respect to FWONK shares,
Southeastern’s sole dispositive power over 37,598 shares, and Southeastern and Longleaf’s joint shared dispositive power and
sole voting power over 4,582,116 shares.
(15) Based on (i) Schedule 13G, filed February 14, 2019, by Barclays PLC (Barclays), Barclays Capital Inc. (Barclays Capital), and
Barclays Bank PLC (Barclays Bank), which states that, with respect to BATRA shares, Barclays has sole voting power and sole
dispositive power over 603,187 shares, Barclays Capital has sole voting power and sole dispositive power over 33,973 shares, and
Barclays Bank has sole voting power and sole dispositive power over 569,214 shares, and (ii) Form 13F, filed February 14, 2019, by
Barclays, with respect to itself and certain related institutional investment managers, including Barclays Bank, Barclays Capital,
and Barclays Capital Securities LTD (Barclays Securities), which Form 13F reports sole voting power, shared voting power, sole
investment discretion, and shared investment discretion as follows:
The table also includes performance-based restricted stock units that had been certified as earned by our
compensation committee on or before February 28, 2019 that will be settled in shares of our common stock within
60 days of such date. Shares of common stock issuable upon exercise or conversion of options, warrants and
convertible securities that were exercisable or convertible on or within 60 days after February 28, 2019 are deemed
to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities
for the purpose of computing the percentage ownership of that person and for the aggregate percentage owned by
the directors and named executive officers as a group, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other individual person. For purposes of the following presentation,
beneficial ownership of shares of LSXMB, BATRB or FWONB, though convertible on a one-for-one basis into
shares of LSXMA, BATRA or FWONA, respectively, are reported as beneficial ownership of LSXMB, BATRB or
FWONB only, and not as beneficial ownership of LSXMA, BATRA or FWONA, respectively. So far as is known to
us, the persons indicated below have sole voting and dispositive power with respect to the shares indicated as
owned by them, except as otherwise stated in the notes to the table.
The number of shares indicated as owned by the persons in the table includes interests in shares held by the
Liberty Media 401(k) Savings Plan as of February 28, 2019. The shares held by the trustee of the Liberty Media
401(k) Savings Plan for the benefit of these persons are voted as directed by such persons.
(7) Includes beneficial ownership of shares that may be acquired upon exercise of, or which relate to, stock options exercisable within
60 days after February 28, 2019.
(8) Includes 305,768 LSXMA shares, 595,757 LSXMK shares, 30,576 BATRA shares, 45,677 BATRK shares, 14,758 FWONA shares
and 72,313 FWONK shares held by The Maffei Foundation, as to which shares Mr. Maffei has disclaimed beneficial ownership.
(9) Includes 680,989 LSXMA shares, 1,489,367 LSXMK shares, 119,007 BATRA shares, 492,012 BATRK shares, 170,247 FWONA
shares and 671,937 FWONK shares pledged to Morgan Stanley Private Bank, National Association in connection with a loan
facility.
(10) Includes 824,069 LSXMA shares and 285,232 LSXMK shares held by a grantor retained annuity trust.
(11) Includes beneficial ownership of shares that may be acquired upon exercise of, or which relate to, stock options exercisable within
60 days after February 28, 2019.
SIRI
Gregory B. Maffei 726,643
Evan D. Malone 219,718
Mark D. Carleton 145,559
Total 1,091,920
(12) Includes 21,585 LSXMA shares, 43,170 LSXMK shares, 2,158 BATRA shares, 7,568 BATRK shares, 5,396 FWONA shares and
10,792 FWONK shares owned by Hilltop Investments, LLC, which is jointly owned by Mr. Bennett and his wife, Mrs. Deborah
Bennett.
(13) Includes 247 LSXMA shares, 494 LSXMK shares, 24 BATRA shares, 87 BATRK shares, 61 FWONA shares and 123 FWONK
shares held by the WJD Foundation, over which Mr. Deevy has sole voting power.
(14) Includes performance-based restricted stock units that had been certified as earned by our compensation committee that will be
settled in shares of our common stock within 60 days of February 28, 2019, as follows:
CHANGES IN CONTROL
We know of no arrangements, including any pledge by any person of our securities, the operation of which may at
a subsequent date result in a change in control of our company.
since March 2018. Previously, he served as (i) a director of Lions Gate Entertainment Corp. from March 2015
to September 2018, (ii) a director of Charter Communications, Inc. (Charter) from May 2013 to July 2018,
(iii) a director of Expedia, Inc. from December 2012 to December 2017, having previously served as a director
from August 2005 to November 2012, (iv) the Chairman of the Board of Liberty TripAdvisor Holdings, Inc.
(Liberty TripAdvisor) from August 2014 to June 2015, (v) a director of Sirius XM from April 2009 to May
2013, (vi) a director of Ascent Capital Group, Inc. (Ascent) from January 2010 to September 2012, (vii) a
director of Live Nation Entertainment, Inc. (Live Nation) from January 2010 to February 2011, (viii) Chairman
of the Board of DIRECTV and its predecessors from February 2008 to June 2010 and (ix) a director of
IAC/InterActiveCorp from May 2006 to June 2010.
• Board Membership Qualifications: Mr. Malone, as President of TCI, co-founded Qurate Retail’s former parent
company and is considered one of the preeminent figures in the media and telecommunications industry. He is
well known for his sophisticated problem solving and risk assessment skills.
Robert R. Bennett
• Age: 61
• A director of our company.
• Professional Background: Mr. Bennett has served as a director of our company (including our predecessor)
since September 2011. Mr. Bennett serves as Managing Director of Hilltop Investments LLC, a private
investment company. Mr. Bennett served as the Chief Executive Officer of Qurate Retail from April 1997 to
August 2005 and its President from April 1997 to February 2006 and held various executive positions with
Qurate Retail from 1994 to 1997.
• Other Public Company Directorships: Mr. Bennett served as a director of Qurate Retail from September 1994
to December 2011. He has served as a director of Discovery since September 2008 and served as a director
of DHC from May 2005 to September 2008. Mr. Bennett has served as a director of HP, Inc. (formerly Hewlett-
Packard Company) since July 2013. He served as a director of Demand Media, Inc. from January 2011 to
February 2014 and Sprint Corporation (and its predecessor) from October 2006 to November 2016.
• Board Membership Qualifications: Mr. Bennett brings to our board in-depth knowledge of the media and
telecommunications industry generally and our corporate history specifically. He has experience in significant
leadership positions with Qurate Retail, especially as a past Chief Executive Officer and President, and
provides our company with strategic insights. Mr. Bennett also has an in-depth understanding of finance, and
has held various financial management positions during the course of his career.
M. Ian G. Gilchrist
• Age: 69
• A director of our company.
• Professional Background: Mr. Gilchrist has served as a director of our company (including our predecessor)
since September 2011 and as a director and the President of Trine Acquisition Corp. since March 2019.
Mr. Gilchrist held various officer positions including Managing Director at Citigroup/Salomon Brothers from
1995 to 2008, CS First Boston Corporation from 1988 to 1995, and Blyth Eastman Paine Webber from 1982 to
1988 and served as a Vice President of Warburg Paribas Becker Incorporated from 1976 to 1982. Previously,
he worked in the venture capital field and as an investment analyst.
• Other Public Company Directorships: Mr. Gilchrist has served as a director of Qurate Retail since July 2009
and as a director of Trine Acquisition Corp. since March 2019.
• Board Membership Qualifications: Mr. Gilchrist’s field of expertise is in the media and telecommunications
sector, having been involved with companies in this industry during much of his 32 years as an investment
banker. Mr. Gilchrist brings to our board significant financial expertise and a unique perspective on the
company and the media and telecommunications sector. He is also an important resource with respect to the
financial services firms that our company engages from time to time.
director of Liberty TripAdvisor since August 2014. He has served as a director of LGP since June 2013, having
previously served as a director of LGI, LGP’s predecessor, from June 2005 to June 2013 and as a director of
LMI, LGI’s predecessor, from May 2004 to June 2005.
• Board Membership Qualifications: Mr. Romrell brings extensive experience, including venture capital
experience, in the telecommunications industry to our board and is an important resource with respect to the
management and operations of companies in the media and telecommunications sector.
Andrea L. Wong
• Age: 52
• A director of our company.
• Professional Background: Ms. Wong has served as a director of our company (including our predecessor)
since September 2011. Ms. Wong served as President, International Production for Sony Pictures Television
and President, International for Sony Pictures Entertainment from September 2011 to March 2017. She
previously served as President and Chief Executive Officer of Lifetime Entertainment Services from 2007 to
April 2010. Ms. Wong also served as an Executive Vice President with ABC, Inc., a subsidiary of The Walt
Disney Company, from 2003 to 2007.
• Other Public Company Directorships: Ms. Wong has served as a director of Qurate Retail since April 2010, as
a director of Hudson’s Bay Company since September 2014, as a director of Hudson Pacific Properties, Inc.
since August 2017 and as a director of Social Capital Hedosophia Holdings Corp. since September 2017.
• Board Membership Qualifications: Ms. Wong brings to our board significant experience in the media and
entertainment industry, having an extensive background in media programming across a variety of platforms,
as well as executive leadership experience with the management and operation of companies in the
entertainment sector. Her experience with programming development and production, brand enhancement and
marketing brings a pragmatic and unique perspective to our board. Her professional expertise, combined with
her continued involvement in the media and entertainment industry, makes her a valuable member of our
board.
2018(1) 2017(1)
Audit fees $3,107,000 3,221,000
Audit related fees(2) 72,000 —
Audit and audit related fees 3,179,000 3,221,000
Tax fees(3) 441,000 1,612,000
All other fees 5,000 5,000
Total fees $3,625,000 4,838,000
(1) Such fees with respect to 2018 and 2017 exclude audit fees, audit related fees and tax fees billed by KPMG LLP to Sirius XM for
services rendered. Sirius XM is a separate public company and its audit fees, audit related fees, tax fees and all other fees (which
aggregated $2,567,500 in 2018 and $2,622,800 in 2017) are reviewed and approved by the audit committee of the board of
directors of Sirius XM.
(2) Consists of audit related fees with respect to due diligence related to potential business combinations.
(3) Tax fees consist of tax compliance and consultations regarding the tax implications of certain transactions.
Our audit committee has considered whether the provision of services by KPMG LLP to our company other than
auditing is compatible with KPMG LLP maintaining its independence and believes that the provision of such other
services is compatible with KPMG LLP maintaining its independence.
Notwithstanding the foregoing general pre-approval, if, in the reasonable judgment of Liberty Media’s Chief
Financial Officer or Senior Vice President and Controller, an individual project involving the provision of
pre-approved services is likely to result in fees in excess of $100,000, or if individual projects under $100,000 are
likely to equal or exceed $500,000 during the period between the regularly scheduled meetings of the audit
committee, then such projects will require the specific pre-approval of our audit committee. Our audit committee
has delegated the authority for the foregoing approvals to the chairman of the audit committee, subject to his
subsequent disclosure to the entire audit committee of the granting of any such approval. Brian M. Deevy currently
serves as the chairman of our audit committee. In addition, the independent auditor is required to provide a report
at each regularly scheduled audit committee meeting on all pre-approved services incurred during the preceding
quarter. Any engagement of our independent auditors for services other than the pre-approved services requires
the specific approval of our audit committee.
Under our policy, any fees incurred by Sirius XM in connection with the provision of services by Sirius XM’s
independent auditor, are expected to be reviewed and approved by Sirius XM’s audit committee pursuant to Sirius
XM’s policy regarding the pre-approval of all audit and permissible non-audit services provided by its independent
auditor in effect at the time of such approval. Such approval by Sirius XM’s audit committee pursuant to its policy is
deemed to be pre-approval of the services by our audit committee.
Our pre-approval policy prohibits the engagement of our independent auditor to provide any services that are
subject to the prohibition imposed by Section 201 of the Sarbanes-Oxley Act.
All services provided by our independent auditor during 2018 were approved in accordance with the terms of the
policy in place.
Name Positions
Richard N. Baer Mr. Baer has served as Chief Legal Officer of our company, Qurate Retail, Liberty TripAdvisor
Age: 62 and Liberty Broadband since January 2016, Liberty Expedia since March 2016 and GCI Liberty
since March 2018. He previously served as a Senior Vice President and General Counsel of our
company and Qurate Retail from January 2013 to December 2015, Liberty TripAdvisor from
July 2013 to December 2015 and Liberty Broadband from June 2014 to December 2015.
Previously, Mr. Baer served as Executive Vice President and Chief Legal Officer of
UnitedHealth Group Incorporated from May 2011 to December 2012. He served as Executive
Vice President and General Counsel of Qwest Communications International Inc. from
December 2002 to April 2011 and Chief Administrative Officer from August 2008 to
April 2011.
Albert E. Rosenthaler Mr. Rosenthaler has served as Chief Corporate Development Officer of our company, Qurate
Age: 59 Retail, Liberty TripAdvisor, Liberty Broadband and Liberty Expedia since October 2016 and GCI
Liberty since March 2018. He previously served as Chief Tax Officer of our company, Qurate
Retail, Liberty TripAdvisor and Liberty Broadband from January 2016 to September 2016 and
Liberty Expedia from March 2016 to September 2016. Prior to that, he served as a Senior Vice
President of our company (including our predecessor) from May 2007 to December 2015,
Qurate Retail (including its predecessor) from April 2002 to December 2015, Liberty
TripAdvisor from July 2013 to December 2015 and Liberty Broadband from June 2014 to
December 2015.
Mark D. Carleton Mr. Carleton has served as Chief Financial Officer of our company, Qurate Retail and Liberty
Age: 58 Broadband since October 2016. He has also served as Chief Financial Officer of GCI Liberty
since March 2018 and served as Treasurer from March 2018 to May 2018. He previously
served as Chief Development Officer of our company, Qurate Retail, Liberty Broadband and
Liberty TripAdvisor from January 2016 to September 2016, as a Senior Vice President of our
company from January 2013 to December 2015, Liberty Broadband from October 2014 to
December 2015, and Qurate Retail from November 2014 to December 2015, and as a Senior
Vice President of predecessors of Liberty Media from December 2003 to January 2013. Prior
to that time, Mr. Carleton served as a partner at KPMG LLP, where he had overall
responsibility for the communications sector and served on KPMG’s board of directors.
Our executive officers will serve in such capacities until their respective successors have been duly elected and
have been qualified, or until their earlier death, resignation, disqualification or removal from office. There is no
family relationship between any of our executive officers or directors, by blood, marriage or adoption, other than
Evan D. Malone, who is the son of John C. Malone.
During the past ten years, none of our directors and executive officers has had any involvement in such legal
proceedings as would be material to an evaluation of his or her ability or integrity.
CODE OF ETHICS
We have adopted a code of business conduct and ethics that applies to our directors, officers, and employees of
Liberty Media, which constitutes our “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act.
Our code of business conduct and ethics is available on our website at www.libertymedia.com.
DIRECTOR INDEPENDENCE
It is our policy that a majority of the members of our board of directors be independent of our management. For a
director to be deemed independent, our board of directors must affirmatively determine that the director has no
direct or indirect material relationship with us. To assist our board of directors in determining which of our directors
qualify as independent for purposes of Nasdaq rules as well as applicable rules and regulations adopted by the
SEC, the nominating and corporate governance committee of our board of directors follows Nasdaq’s corporate
governance rules on the criteria for director independence.
Our board of directors has determined that each of Robert R. Bennett, Brian M. Deevy, M. Ian G. Gilchrist, David E.
Rapley, Larry E. Romrell and Andrea L. Wong qualifies as an independent director of our company.
BOARD COMPOSITION
As described above under “Proposals of Our Board—Proposal 1—The Election of Directors Proposal,” our board is
comprised of directors with a broad range of backgrounds and skill sets, including in media and
telecommunications, science and technology, venture capital, investment banking, auditing and financial
engineering. Our board is also chronologically diverse with our members’ ages spanning four decades. For more
information on our policies with respect to board candidates, see “—Committees of the Board of Directors—
Nominating and Corporate Governance Committee” below.
Our board of directors has established an executive committee, whose members are John C. Malone, Gregory B.
Maffei and Robert R. Bennett. Except as specifically prohibited by the General Corporation Law of the State of
Delaware, the executive committee may exercise all the powers and authority of our board of directors in the
management of our business and affairs, including the power and authority to authorize the issuance of shares of
our capital stock.
Compensation Committee
Our board of directors has established a compensation committee, whose chairman is M. Ian G. Gilchrist and
whose other members are David E. Rapley and Andrea L. Wong. See “—Director Independence” above.
The compensation committee reviews and approves corporate goals and objectives relevant to the compensation
of our Chief Executive Officer and our other executive officers. The compensation committee also reviews and
approves the compensation of our Chief Executive Officer, Chief Legal Officer, Chief Financial Officer and Chief
Corporate Development Officer, and oversees the compensation of the chief executive officers of our non-public
operating subsidiaries. For a description of our processes and policies for consideration and determination of
executive compensation, including the role of our Chief Executive Officer and outside consultants in determining or
recommending amounts and/or forms of compensation, see “Executive Compensation—Compensation Discussion
and Analysis.”
Our board of directors has adopted a written charter for the compensation committee, which is available on our
website at www.libertymedia.com.
M. Ian G. Gilchrist
David E. Rapley
Andrea L. Wong
Our board of directors has established a nominating and corporate governance committee, whose chairman is
David E. Rapley and whose other members are M. Ian G. Gilchrist, Larry E. Romrell and Andrea L. Wong. See
“—Director Independence” above.
The nominating and corporate governance committee identifies individuals qualified to become board members
consistent with criteria established or approved by our board of directors from time to time, identifies director
nominees for upcoming annual meetings, develops corporate governance guidelines applicable to our company
and oversees the evaluation of our board and management.
The nominating and corporate governance committee will consider candidates for director recommended by any
stockholder provided that such recommendations are properly submitted. Eligible stockholders wishing to
recommend a candidate for nomination as a director should send the recommendation in writing to the Corporate
Secretary, Liberty Media Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112. Stockholder
recommendations must be made in accordance with our bylaws, as discussed under “Stockholder Proposals”
below, and contain the following information:
• the name and address of the proposing stockholder and the beneficial owner, if any, on whose behalf the
nomination is being made, and documentation indicating the number of shares of our common stock owned
beneficially and of record by such person and the holder or holders of record of those shares, together with a
statement that the proposing stockholder is recommending a candidate for nomination as a director;
• the candidate’s name, age, business and residence addresses, principal occupation or employment, business
experience, educational background and any other information relevant in light of the factors considered by the
nominating and corporate governance committee in making a determination of a candidate’s qualifications, as
described below;
• a statement detailing any relationship, arrangement or understanding between the proposing stockholder
and/or beneficial owner(s), if different, and any other person(s) (including their names) under which the
proposing stockholder is making the nomination and any affiliates or associates (as defined in Rule 12b-2 of
the Exchange Act) of such proposing stockholder(s) or beneficial owner (each a Proposing Person);
• a statement detailing any relationship, arrangement or understanding that might affect the independence of
the candidate as a member of our board of directors;
• any other information that would be required under SEC rules in a proxy statement soliciting proxies for the
election of such candidate as a director;
• a representation as to whether the Proposing Person intends (or is part of a group that intends) to deliver any
proxy materials or otherwise solicit proxies in support of the director nominee;
• a representation by each Proposing Person who is a holder of record of our common stock as to whether the
notice is being given on behalf of the holder of record and/or one or more beneficial owners, the number of
shares held by any beneficial owner along with evidence of such beneficial ownership and that such holder of
record is entitled to vote at the annual stockholders meeting and intends to appear in person or by proxy at the
annual stockholders meeting at which the person named in such notice is to stand for election;
• a written consent of the candidate to be named in the proxy statement and to serve as a director, if nominated
and elected;
• a representation as to whether the Proposing Person has received any financial assistance, funding or other
consideration from any other person regarding the nomination (a Stockholder Associated Person) (including
the details of such assistance, funding or consideration); and
• a representation as to whether and the extent to which any hedging, derivative or other transaction has been
entered into with respect to our company within the last six months by, or is in effect with respect to, the
Proposing Person, any person to be nominated by the proposing stockholder or any Stockholder Associated
Person, the effect or intent of which transaction is to mitigate loss to or manage risk or benefit of share price
changes for, or increase or decrease the voting power of, the Proposing Person, its nominee, or any such
Stockholder Associated Person.
In connection with its evaluation, the nominating and corporate governance committee may request additional
information from the proposing stockholder and the candidate. The nominating and corporate governance
committee has sole discretion to decide which individuals to recommend for nomination as directors.
To be nominated to serve as a director, a nominee need not meet any specific minimum criteria. However, the
nominating and corporate governance committee believes that nominees for director should possess the highest
personal and professional ethics, integrity, values and judgment and should be committed to the long-term interests
of our stockholders. When evaluating a potential director nominee, including one recommended by a stockholder,
the nominating and corporate governance committee will take into account a number of factors, including, but not
limited to, the following:
• independence from management;
• his or her unique background, including education, professional experience and relevant skill sets;
• judgment, skill, integrity and reputation;
• existing commitments to other businesses as a director, executive or owner;
• personal conflicts of interest, if any; and
• the size and composition of the existing board of directors, including whether the potential director nominee
would positively impact the composition of the board by bringing a new perspective or viewpoint to the board of
directors.
The nominating and corporate governance committee does not assign specific weights to particular criteria and no
particular criterion is necessarily applicable to all prospective nominees. The nominating and corporate governance
committee does not have a formal policy with respect to diversity; however, our board and the nominating and
corporate governance committee believe that it is important that our board members represent diverse viewpoints.
When seeking candidates for director, the nominating and corporate governance committee may solicit suggestions
from incumbent directors, management, stockholders and others. After conducting an initial evaluation of a
prospective nominee, the nominating and corporate governance committee will interview that candidate if it
believes the candidate might be suitable to be a director. The nominating and corporate governance committee may
also ask the candidate to meet with management. If the nominating and corporate governance committee believes
a candidate would be a valuable addition to our board of directors, it may recommend to the full board that
candidate’s nomination and election.
Prior to nominating an incumbent director for re-election at an annual meeting of stockholders, the nominating and
corporate governance committee will consider the director’s past attendance at, and participation in, meetings of
the board of directors and its committees and the director’s formal and informal contributions to the various
activities conducted by the board and the board committees of which such individual is a member.
The members of our nominating and corporate governance committee have determined that Messrs. Malone,
Bennett and Gilchrist, who are nominated for election at the annual meeting, continue to be qualified to serve as
directors of our company and such nominations were approved by the entire board of directors.
Our board of directors has adopted a written charter for the nominating and corporate governance committee. Our
board of directors has also adopted corporate governance guidelines, which were developed by the nominating and
corporate governance committee. The charter and the corporate governance guidelines are available on our
website at www.libertymedia.com.
Audit Committee
Our board of directors has established an audit committee, whose chairman is Brian M. Deevy and whose other
members are M. Ian G. Gilchrist and Larry E. Romrell. See “—Director Independence” above.
Brian M. Deevy
M. Ian G. Gilchrist
Larry E. Romrell
Other
Our board of directors, by resolution, may from time to time establish other committees of our board of directors,
consisting of one or more of our directors. Any committee so established will have the powers delegated to it by
resolution of our board of directors, subject to applicable law.
BOARD MEETINGS
During 2018, there were six meetings of our full board of directors, no meetings of our executive committee, four
meetings of our compensation committee, one meeting of our nominating and corporate governance committee
and six meetings of our audit committee.
EXECUTIVE SESSIONS
In 2018, the independent directors of our company, then serving, met at three executive sessions without
management participation.
Any interested party who has a concern regarding any matter that it wishes to have addressed by our independent
directors, as a group, at an upcoming executive session may send its concern in writing addressed to Independent
Directors of Liberty Media Corporation, c/o Liberty Media Corporation, 12300 Liberty Boulevard, Englewood,
Colorado 80112. The current independent directors of our company are Robert R. Bennett, Brian M. Deevy,
M. Ian G. Gilchrist, David E. Rapley, Larry E. Romrell and Andrea L. Wong.
Services Agreements
In connection with prior spin-off or split-off transactions involving our company or Qurate Retail, we entered into
transitional services arrangements with each of Qurate Retail, Liberty Broadband, Liberty TripAdvisor, Liberty
Expedia and GCI Liberty. Pursuant to these arrangements, our employees provide or provided services to these
companies and our company is reimbursed for the time spent serving these companies.
Qurate Retail
We assumed a services agreement with Qurate Retail (the Qurate Retail Services Agreement) in connection with
the spin-off of our company from our predecessor parent company. Pursuant to the Qurate Retail Services
Agreement, in 2018, Qurate Retail reimbursed us for the portion of the base salary and certain other compensation
we paid to our employees that was allocable to Qurate Retail for estimated time spent by each such employee
related to that company. Qurate Retail does not reimburse us for time spent by Mr. Maffei on Qurate Retail matters.
Rather, Qurate Retail pays Mr. Maffei directly pursuant to his employment agreement with Qurate Retail. The 2018
performance-based bonuses earned by the named executive officers for services provided to our company were
paid directly by our company and the performance-based bonuses earned by the named executive officers for
services provided to Qurate Retail were paid directly by Qurate Retail. During 2018, the estimate of the allocable
percentages of time spent performing services for Qurate Retail, on the one hand, and our company, on the other
hand, were reviewed quarterly by our audit committee for appropriateness. The salaries and certain perquisite
information included in the “Summary Compensation Table” below reflect the portion of the compensation paid by
and allocable to Liberty Media and do not reflect the portion of the compensation allocable to Qurate Retail and for
which Qurate Retail reimbursed Liberty Media under the Qurate Retail Services Agreement. During the year ended
December 31, 2018, the weighted average percentage of each such named executive officer’s time that was
allocated to our company was: Mr. Malone—75%; Mr. Baer—70%; Mr. Carleton—75%; and Mr. Rosenthaler—73%.
In connection with each of the August 2014 spin-off of Liberty TripAdvisor from Qurate Retail, our November 2014
spin-off of Liberty Broadband, the November 2016 split-off of Liberty Expedia from Qurate Retail and the March
2018 acquisition and subsequent separation of GCI Liberty from Qurate Retail, we entered into a services
agreement with Liberty TripAdvisor, Liberty Broadband, Liberty Expedia and GCI Liberty, respectively, pursuant to
which we provide each of them certain administrative and management services, and each of them pays us a
monthly management fee, the amount of which is subject to semi-annual review. For the year ended December 31,
2018, Liberty TripAdvisor, Liberty Broadband, Liberty Expedia and GCI Liberty accrued aggregate management
fees of $3.2 million, $3.5 million, $4.0 million and $8.3 million, respectively, payable to our company under the
relevant services agreement.
In addition, when setting compensation, our compensation committee considers the recommendations obtained
from our Chief Executive Officer as to all elements of the compensation packages of Messrs. Baer, Carleton and
Rosenthaler. To make these recommendations, our Chief Executive Officer evaluates the performance and
contributions of each such named executive officer. He also considers whether the pay packages afforded to such
named executive officers are competitive and are aligned internally. He also evaluates the named executive officer’s
performance against individual, department and corporate goals.
In December 2014, our compensation committee approved a five-year employment agreement with Mr. Maffei (the
Maffei Employment Agreement), which establishes his compensation for the term of the agreement. See
“—Executive Compensation Arrangements—Gregory B. Maffei” below. Prior to entering into the Maffei Employment
Agreement, our compensation committee reviewed information from Mercer with respect to chief executive officer
compensation packages at media, telecommunications, e-commerce and entertainment companies and discussed
with Mercer alternative equity award structures.
In May 2016, our compensation committee approved a new four-year employment agreement with Mr. Baer (the
2016 Baer Employment Agreement), which establishes his compensation for the term of the agreement. See
“—Executive Compensation Arrangements—Richard N. Baer” below. Prior to entering into the 2016 Baer
Employment Agreement, our compensation committee reviewed compensation data with respect to chief legal
officer compensation packages at media, telecommunications and entertainment companies and considered the
recommendations of Mr. Maffei with respect to the proposed compensation package.
Mr. Malone’s compensation is governed by the terms of his employment agreement with our company. See
“—Executive Compensation Arrangements—John C. Malone.”
Base Salary
Our compensation committee believes base salary should be a relatively smaller portion of each named executive
officer’s overall compensation package, thereby aligning the interests of our executives more closely with those of
our stockholders. The base salaries of the named executive officers are reviewed on an annual basis (other than
Messrs. Malone and Maffei, whose salaries are set by their respective employment agreements), as well as at the
time of any change in responsibilities. Typically, after establishing a named executive officer’s base salary, salary
increases are limited to cost-of-living adjustments, adjustments based on changes in the scope of the named
executive officer’s responsibilities, and adjustments to align the named executive officer’s salary level with those of
our other named executive officers. Similarly, in accordance with the terms of his employment agreement,
Mr. Malone’s fixed cash compensation is limited.
After completion of the annual review in December 2017, the 2018 base salaries of Messrs. Baer, Carleton and
Rosenthaler were increased by 2%, reflecting a cost-of-living adjustment. For 2018, Mr. Maffei received the 5%
base salary increase prescribed by the Maffei Employment Agreement. Mr. Malone received no increase under the
terms of his employment agreement.
To determine the LMC Funding Pool Maximum Performance Bonus for each of Messrs. Baer, Carleton and
Rosenthaler, our compensation committee divided the base salary paid by our company in half, recognizing that the
other half would be subject to Qurate Retail’s bonus program. Our compensation committee then set the LMC
Funding Pool Maximum Performance Bonus at three times the quotient above for Mr. Baer, Mr. Carleton and
Mr. Rosenthaler. Mr. Maffei’s LMC Funding Pool Maximum Performance Bonus was set at seven and one half times
the base salary paid by our company, which exceeded the terms of the Maffei Employment Agreement. Mr. Baer’s
LMC Funding Pool Maximum Performance Bonus was set at three times the base salary paid by our company,
which exceeded the terms of the 2016 Baer Employment Agreement. Our compensation committee increased
Mr. Maffei’s LMC Funding Pool Maximum Performance Bonus and Mr. Baer’s LMC Funding Pool Maximum
Performance Bonus to account for the fact that their respective time allocated to Liberty TripAdvisor, Liberty
Broadband, Liberty Expedia, and GCI Liberty under the services agreements is charged to our company in the
determination of their LMC individual bonuses by our compensation committee. In addition, the LMC Funding Pool
Maximum Performance Bonuses of Mr. Carleton and Mr. Rosenthaler were similarly increased in 2018.
Our compensation committee then determined that if the Cash Bonus Pool were fully funded, it would make its
determinations as to the percentage to pay Mr. Maffei and Mr. Baer based on the above-described contractual limits
(five times base pay for Mr. Maffei and two times attributable base pay for Mr. Baer). Similarly, our compensation
committee determined to make its determinations as to the percentage to pay Mr. Carleton and Mr. Rosenthaler
based on a limit of two times their respective attributable base pay. These limits will be referred to as the LMC
Maximum Performance Bonus.
Assuming the Bonus Threshold was met (and after taking into account any reductions associated with a shortfall in
the Cash Bonus Pool), each participant was entitled to receive from our company an amount (the LMC Maximum
Individual Bonus) equal to 60% of the LMC Maximum Performance Bonus for that participant. The LMC Maximum
Individual Bonus was subject to reduction based on a determination of the participant’s achievement of qualitative
criteria established with respect to the services to be performed by the participant on behalf of our company. Under
Qurate Retail’s corollary program, each participant was entitled to receive from Qurate Retail a maximum individual
bonus equal to 60% of his Qurate Retail maximum performance bonus, subject to reduction based on a
determination of the participant’s achievement of qualitative criteria established with respect to the services to be
performed by the participant on behalf of Qurate Retail. Our compensation committee believes this construct was
appropriate in light of the Qurate Retail Services Agreement and the fact that each participant splits his
professional time and duties.
Also, assuming the Bonus Threshold was met (and after taking into account any reductions associated with a
shortfall in the Cash Bonus Pool), each participant was entitled to receive from our company an amount (the LMC
Maximum Corporate Bonus) equal to 40% of his LMC Maximum Performance Bonus, subject to reduction based
on a determination of the corporate performance of our company. Qurate Retail has a corollary program pursuant
to which each participant was entitled to receive from Qurate Retail a bonus that is 40% of the Qurate Retail
maximum bonus, which was subject to reduction based on a determination of the corporate performance of Qurate
Retail.
In December 2018, our compensation committee and the Qurate Retail compensation committee reviewed
contemporaneously our respective named executive officers’ performance under each company’s program.
Notwithstanding this joint effort, our compensation committee retained sole and exclusive discretion with respect to
the approval of award terms and amounts payable under our bonus program.
Also, in December 2018, our compensation committee determined that the combined Adjusted OIBDA (or
equivalent measure) for Sirius XM, Braves Holdings, Formula 1 and a proportionate share of the equivalent
measure of Adjusted OIBDA of Live Nation, was approximately $2,959.7 million using the formula described above,
exceeding the Bonus Threshold by approximately $2,459.7 million, thereby creating a notional Cash Bonus Pool of
approximately $14.02 million, which exceeded the amount necessary to cover the aggregate LMC Funding Pool
Maximum Performance Bonuses of all the participants and enabling each participant to receive a bonus under the
performance-based program up to his LMC Funding Pool Maximum Performance Bonus.
Individual Performance Bonus. Our compensation committee then reviewed the individual performance of each
participant to determine the reductions that would apply to each participant’s LMC Maximum Individual Bonus. Our
compensation committee took into account a variety of factors, without assigning a numerical weight to any single
performance measure. This determination was based on reports of our board, the observations of committee
members throughout the year, executive self-evaluations and, with respect to the participants other than Mr. Maffei,
the observations and input of Mr. Maffei. In evaluating the performance of each of the participants for determining
Corporate Performance Bonus. Our compensation committee then made a determination as to the reductions, if
any, that would apply to each participant’s LMC Maximum Corporate Bonus. In making this determination, our
compensation committee reviewed forecasts of 2018 Adjusted OIBDA, revenue and free cash flow (as defined
below) for Sirius XM, Braves Holdings and Formula 1, and a proportionate share of Live Nation, all of which
forecasts were prepared in December 2018 and are set forth in the table below. Also set forth in the table below are
the corresponding actual financial measures achieved for 2018, which deviated from our forecasts as indicated
below. Although forecasted free cash flow deviated from the actual result, neither that deviation nor the Revenue or
Adjusted OIBDA deviations would have materially affected the amounts paid under the corporate performance
bonus portion of the program.
LMC Maximum
Corporate Percentage Aggregate
Name Bonus Payable Dollar Amount
Gregory B. Maffei $3,011,928 92.5% $2,786,033
Richard N. Baer $ 507,998 92.5% $ 469,899
Mark D. Carleton $ 493,347 92.5% $ 456,346
Albert E. Rosenthaler $ 493,347 92.5% $ 456,346
Aggregate Results. The following table presents information concerning the aggregate 2018 performance-based
bonus amounts payable to each named executive officer by our company (other than Mr. Malone), after giving effect
to the determinations described above.
Individual Corporate
Performance Performance
Name Bonus Bonus Total Bonus
Gregory B. Maffei $3,586,808 $2,786,033 $6,372,841
Richard N. Baer $ 689,372 $ 469,899 $1,159,270
Mark D. Carleton $ 614,837 $ 456,346 $1,071,183
Albert E. Rosenthaler $ 648,312 $ 456,346 $1,104,658
Our compensation committee then noted that, when combined with the total 2018 performance-based bonus
amounts paid by Qurate Retail to the overlapping named executive officers, each of our named executive officers
received the following payments:
Our compensation committee adopted an annual, performance-based program for payment of the 2018 Maffei
RSUs. None of the 2018 Maffei RSUs would vest unless a minimum corporate performance was achieved: the
combined Adjusted OIBDA (or equivalent measure) of Sirius XM, Braves Holdings, Formula 1 and a proportionate
share of the equivalent measure of Adjusted OIBDA of Live Nation, for the year ended December 31, 2018 was
required to exceed $500 million (the Maffei RSU Threshold). If the Maffei RSU Threshold were met, the notional
pool for payment of the 2018 Maffei RSUs would be funded with 0.43% of the amount by which such combined
Adjusted OIBDA exceeded $500 million (the Maffei RSU pool). A maximum payout equal to 1.5 times the target
number of 2018 Maffei RSUs or $9.234 million of grant value was established.
For purposes of the Maffei RSU pool, Adjusted OIBDA was defined in the same manner as the cash performance
bonus program. See “—Elements of 2018 Executive Compensation—2018 Performance-based Bonuses” above.
Assuming the Maffei RSU Threshold of $500 million was met and the Maffei RSU pool was funded, the amount
earned would be subject to reduction from the maximum amount payable by our compensation committee based on
performance criteria. After review of our company’s 2018 Adjusted OIBDA results, our compensation committee
determined and certified that the maximum 2018 Maffei RSUs could be paid to Mr. Maffei. Our compensation
committee then determined to review Mr. Maffei’s performance to determine what portion of the maximum award
would be paid. Our compensation committee reviewed Mr. Maffei’s 2018 performance and noted his efforts in
successfully overseeing the acquisition of Pandora by Sirius XM. After considering Mr. Maffei’s performance in
these areas, our compensation committee determined to vest 100% of the previously issued 2018 Maffei RSUs.
In addition, for the same reasons, our compensation committee awarded Mr. Maffei above-target awards for his
performance in 2018. Our compensation committee also recommended to the Qurate Retail compensation
committee and the GCI Liberty compensation committee that those committees consider making similar
above-target awards related to Mr. Maffei’s performance. As a result of these discussions, the three compensation
committees awarded Mr. Maffei above-target awards with a grant value aggregating $2.7 million. The compensation
committees split the grant value by each granting an additional 15% of the target number of restricted stock units
and stock options granted to Mr. Maffei in March 2018. In the case of GCI Liberty, such grant related to awards of
Qurate Retail’s former Series B Liberty Ventures common stock on an as-converted basis as a result of the March
2018 transactions between Qurate Retail and GCI Liberty. Accordingly, our compensation committee granted 6,908
BATRK options, 94,913 LSXMK options, 20,798 FWONK options, 1,842 BATRK restricted stock units, and 12,839
FWONK restricted stock units. For more information regarding the target equity and above-target equity awards,
see the “Grants of Plan-Based Awards” table below and “—Executive Compensation—Compensation Discussion
and Analysis—Elements of 2018 Executive Compensation—Equity Incentive Compensation—Maffei
Performance-based Equity Awards” in Qurate Retail’s Definitive Proxy Statement on Schedule 14A filed April 24,
2019.
Our compensation committee adopted an annual, performance-based program for payment of the 2018 Chief
RSUs. None of the 2018 Chief RSUs would vest unless a minimum corporate performance was achieved: the
combined Adjusted OIBDA (or equivalent measure) of Sirius XM, Braves Holdings, Formula 1 and a proportionate
share of the equivalent measure of Adjusted OIBDA of Live Nation, for the year ended December 31, 2018 was
required to exceed $500 million (the Chief Threshold). If the Chief Threshold were met, the notional pool for
payment of the 2018 Chief RSUs would be funded with 0.24% of the amount by which such combined Adjusted
OIBDA exceeded $500 million (the Chief RSU pool). If the Chief RSU pool was not funded so that the maximum
awards could be paid to all participants, each participant’s maximum award would be reduced pro rata. The
maximum payout set for each of Messrs. Baer, Carleton and Rosenthaler was $1.875 million, $1.4 million and
$1.4 million, respectively.
For purposes of the Chief RSU pool, Adjusted OIBDA was defined in the same manner as the performance cash
bonus program. See “—Elements of 2018 Executive Compensation—2018 Performance-based Bonuses”.
Assuming the Chief Threshold of $500 million was met and the Chief RSU pool was fully funded, the amount
earned would be subject to reduction from the maximum amount payable by our compensation committee based on
performance criteria. After review of our company’s 2018 Adjusted OIBDA results, our compensation committee
determined and certified that the maximum Chief RSU awards could be paid to Messrs. Baer, Carleton and
Rosenthaler. Our compensation committee then determined to review each named executive officer’s performance
to determine what portion of the maximum award would be paid. Our compensation committee reviewed
Messrs. Baer, Carleton and Rosenthaler’s performance and also considered the recommendations from Mr. Maffei.
Mr. Maffei recommended that our committee vest 100% of the 2018 Chief RSUs previously granted to each
of Messrs. Baer, Carleton and Rosenthaler based on his assessment of their individual performance against the
goals established in connection with the performance cash bonus program and his general observation of their
leadership and executive performance. Accordingly, our compensation committee determined to reduce the payouts
down to the target award levels and then approved vesting of all of the 2018 Chief RSUs previously granted to
Messrs. Baer, Carleton and Rosenthaler.
Mr. Malone did not participate in the annual performance RSU program.
The perquisites and other personal benefits available to our executives (that are not otherwise available to all of our
salaried employees, such as matching contributions to the Liberty Media 401(k) Savings Plan and the payment of
life insurance premiums) consist of:
• limited personal use of corporate aircraft;
• in the case of Mr. Maffei, reimbursement of legal expenses;
• occasional, personal use of an apartment in New York City owned by a subsidiary of our company, which is
primarily used for business purposes, and occasional, personal use of a company car and driver;
• in the case of Mr. Carleton, reimbursement for use of private housing while on New York City business trips;
• a deferred compensation plan that provides above-market preferential returns; and
• in the case of Mr. Malone, an annual allowance of $1 million for personal expenses provided pursuant to the
terms of his employment agreement (see “—Executive Compensation Arrangements—John C. Malone”).
Taxable income may be incurred by our executives in connection with their receipt of perquisites and personal
benefits. Other than as contemplated by Mr. Malone’s employment agreement, we have not provided gross-up
payments to our executives in connection with any such taxable income incurred during the past three years.
Aircraft Usage. On occasion, and with the approval of our Chairman or Chief Executive Officer, executives may
have family members and other guests accompany them on our corporate aircraft when traveling on business.
Under the terms of the employment arrangements with our Chairman and our Chief Executive Officer, our
Chairman and our Chief Executive Officer and their guests may use the corporate aircraft for non-business
purposes subject to specified limitations.
Pursuant to a February 5, 2013 letter agreement between us and Mr. Maffei, Mr. Maffei was entitled to 120 hours
per year of personal flight time through the first to occur of (i) the termination of his employment, subject to any
continued right to use the corporate aircraft as described below or pursuant to the terms of his employment
arrangement in effect at the time of the termination or (ii) the cessation of ownership or lease of corporate aircraft.
Effective November 11, 2015, pursuant to a letter agreement between us and Mr. Maffei of the same date,
Mr. Maffei is entitled to 30 additional hours per year of personal flight time if he reimburses us for such usage
through the first to occur of (i) the termination of his employment or (ii) the cessation of ownership or lease of
corporate aircraft. Under the Maffei Employment Agreement, if Mr. Maffei’s employment had been terminated due
to disability, for good reason or without cause, Mr. Maffei would have been entitled to continued use of the
company’s aircraft under the terms of the February 5, 2013 letter agreement for 12 months after termination of his
employment. Mr. Maffei incurs taxable income, calculated in accordance with the Standard Industry Fare Level
(SIFL) rates, for all personal use of our corporate aircraft under the February 5, 2013 letter agreement. Mr. Maffei
incurs taxable income at the SIFL rates minus amounts paid under time sharing agreements with our company for
travel pursuant to the November 11, 2015 letter agreement. Flights where there are no passengers on
company-owned aircraft were not charged against the 120 hours of personal flight time per year allotted to
Mr. Maffei if the flight department determines that the use of a NetJets, Inc. supplied aircraft for a proposed
personal flight would be disadvantageous to our company due to (i) use of budgeted hours under the then current
Liberty Media fractional ownership contract with NetJets, Inc. or (ii) higher flight cost as compared to the cost of
using company owned aircraft.
The cost of Mr. Malone’s personal use of our corporate aircraft, calculated in accordance with SIFL, counts toward
his $1 million personal expense allowance (described above).
For disclosure purposes, we determine incremental cost using a method that takes into account:
• landing and parking expenses;
• crew travel expenses;
• supplies and catering;
• aircraft fuel and oil expenses per hour of flight;
• any customs, foreign permit and similar fees; and
• passenger ground transportation.
Because the company’s aircraft is used primarily for business travel, this methodology excludes fixed costs that do
not change based on usage, such as salaries of pilots and crew, purchase or lease costs of aircraft and costs of
maintenance and upkeep.
Pursuant to our aircraft time sharing agreements with Qurate Retail, Liberty TripAdvisor, Liberty Broadband, Liberty
Expedia, and GCI Liberty, each of these companies pays us for any costs, calculated in accordance with Part 91 of
the Federal Aviation Regulations, associated with Mr. Malone or Mr. Maffei using our corporate aircraft that are
allocable to such company, except that allocations made to Liberty TripAdvisor, Liberty Broadband, Liberty Expedia
or GCI Liberty may only be made for corporate aircraft use relating to such company’s business matters, while
allocations made to Qurate Retail relate to such company’s business matters along with approved personal use of
our aircraft. Pursuant to our aircraft time sharing agreements with Mr. Maffei, Mr. Maffei reimburses us for costs
associated with his personal use of our corporate aircraft under the November 11, 2015 letter agreement, and such
costs include the expenses listed above, insurance obtained for the specific flight and an additional charge equal to
100% of the aircraft fuel and oil expenses for the specific flight.
For purposes of determining an executive’s taxable income, personal use of our aircraft is valued using a method
based on SIFL rates, as published by the Treasury Department. The amount determined using the SIFL rates is
typically lower than the amount determined using the incremental cost method. Under the American Jobs Creation
Act of 2004, the amount we may deduct for a purely personal flight is limited to the amount included in the taxable
income of the executives who took the flight. Also, the deductibility of any non-business use will be limited by
Section 162(m) of the Code to the extent that the named executive officer’s compensation that is subject to that
limitation exceeds $1 million. See “—Deductibility of Executive Compensation” below.
Policy on Restatements
In those instances where we grant cash or equity-based incentive compensation, we include in the related
agreement with the executive a right, in favor of our company, to require the executive to repay or return to the
company any cash, stock or other incentive compensation (including proceeds from the disposition of shares
received upon exercise of options or stock appreciation rights). That right will arise if (1) a material restatement of
any of our financial statements is required and (2) in the reasonable judgment of our compensation committee,
(A) such restatement is due to material noncompliance with any financial reporting requirement under applicable
securities laws and (B) such noncompliance is a result of misconduct on the part of the executive. In determining
the amount of such repayment or return, our compensation committee may take into account, among other factors
it deems relevant, the extent to which the market value of the applicable series of our common stock was affected
by the errors giving rise to the restatement. The cash, stock or other compensation that we may require the
executive to repay or return must have been received by the executive during the 12-month period beginning on the
date of the first public issuance or the filing with the SEC, whichever occurs earlier, of the financial statement
requiring restatement. The compensation required to be repaid or returned will include (1) cash or company stock
received by the executive (A) upon the exercise during that 12-month period of any stock appreciation right held by
the executive or (B) upon the payment during that 12-month period of any incentive compensation, the value of
which is determined by reference to the value of company stock, and (2) any proceeds received by the executive
from the disposition during that 12-month period of company stock received by the executive upon the exercise,
vesting or payment during that 12-month period of any award of equity-based incentive compensation.
Gregory B. Maffei 2018 1,112,188 — 3,024,616 8,830,019 6,372,841 397,703 416,179(9)(10) 20,153,546
President and Chief
Executive Officer 2017 1,059,227 — 1,711,501 10,247,980 6,066,373 401,887 325,295(9)(10) 19,812,263
2016 1,045,739 928,872 2,296,392 6,907,448 5,043,938 335,068 332,008(9)(10) 16,889,465
(1) Represents only that portion of each named executive officer’s salary that was allocated to our company with respect to the years
ended December 31, 2018, 2017 and 2016 under the services agreements. For a description of the allocation of compensation
between our company and Qurate Retail, Liberty TripAdvisor, Liberty Broadband, Liberty Expedia and GCI Liberty, see
“—Compensation Discussion and Analysis—Services Agreements.”
(2) Reflects the grant date fair value of the restricted stock granted in 2016 and RSUs granted to our named executive officers during
2018, 2017 and 2016. The table reflects the grant date fair value of the 2016 performance-based RSUs granted to each of
Messrs. Maffei, Carleton and Rosenthaler, restricted stock granted to Messrs. Maffei, Baer, Carleton and Rosenthaler in 2016, the
2017 performance-based RSUs granted to each of Messrs. Maffei, Baer, Carleton and Rosenthaler and the 2018 Maffei RSUs and
the 2018 Chief RSUs. A maximum payout equal to 1.5 times the target number of 2018 Maffei RSUs or $9.234 million of grant
value was established. The maximum payout set for Mr. Baer was $1.875 million of grant value, and the maximum payout set for
each of Messrs. Carleton and Rosenthaler was $1.4 million of grant value of 2018 Chief RSUs. The grant date fair value of these
awards has been computed in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for
estimated forfeitures. For a description of the assumptions applied in these calculations, see Note 14 to our consolidated financial
statements for the year ended December 31, 2018 (which are included in our 2018 Form 10-K).
(3) The grant date fair value of Mr. Maffei’s 2018, 2017 and 2016 stock option awards, Mr. Baer’s 2016 Term Options (as defined
below) and Mr. Rosenthaler’s 2017 stock option award have been computed in accordance with FASB ASC Topic 718, but
(pursuant to SEC regulations) without reduction for estimated forfeitures. For a description of the assumptions applied in these
calculations, see Note 14 to our consolidated financial statements for the year ended December 31, 2018 (which are included in
the 2018 Form 10-K).
(4) Reflects the above-market earnings credited during 2018, 2017 and 2016 to the deferred compensation accounts of each
applicable named executive officer. See “—Compensation Discussion and Analysis—Elements of 2018 Executive Compensation—
Deferred Compensation,” “—Executive Compensation Arrangements—John C. Malone,” and “—Nonqualified Deferred
Compensation Plans” below.
(5) Included in this column are the following life insurance premiums paid on behalf of each of the named executive officers and
allocated to our company under the services agreement:
Amounts ($)
Name 2018 2017 2016
John C. Malone 4,635 2,657 2,348
Gregory B. Maffei 4,217 3,432 3,462
Richard N. Baer 5,267 3,988 3,309
Mark D. Carleton 3,677 3,677 4,378
Albert E. Rosenthaler 3,579 3,040 3,207
Vesting
Years of Service Percentage
Less than 1 0%
1–2 33%
2–3 66%
3 or more 100%
Included in this column, with respect to each named executive officer are the following matching contributions made by and
allocated to our company to the Liberty Media 401(k) Savings Plan in 2018, 2017 and 2016:
Amounts ($)
Name 2018 2017 2016
John C. Malone 20,625 11,610 10,070
Gregory B. Maffei 23,650 18,900 18,020
Richard N. Baer 19,250 14,310 17,225
Mark D. Carleton 20,625 20,250 22,790
Albert E. Rosenthaler 20,075 16,633 16,695
With respect to these matching contributions, all of our named executive officers are fully vested.
(8) Includes the following amounts which were allocated to our company under the Qurate Retail Services Agreement:
Amounts ($)
2018 2017 2016
Reimbursement for personal legal, accounting and tax services 45,000 64,064 26,852
(a)
Compensation related to personal use of corporate aircraft 204,974 165,655 188,122
Tax payments made on behalf of Mr. Malone 642,598 324,073 281,515
(a) Calculated based on aggregate incremental cost of such usage to our company.
Also includes miscellaneous personal expenses, such as courier charges.
(9) Includes the following amounts which were allocated to our company under the Qurate Retail Services Agreement:
Amounts ($)
2018 2017 2016
Reimbursement for legal services — — 3,454
(a)
Compensation related to personal use of corporate aircraft 373,028 298,535 304,454
(a) Calculated based on aggregate incremental cost of such usage to our company.
(10) We own an apartment in New York City which is primarily used for business purposes. Messrs. Maffei, Carleton and Rosenthaler
occasionally used this apartment for personal reasons. From time to time, we reimburse Mr. Carleton for his use of private housing
while on New York City business trips, and we also pay the cost of miscellaneous shipping and catering expenses for Mr. Maffei.
(11) Includes $5,000 in charitable contributions in 2018 and 2016 made on behalf of Mr. Rosenthaler pursuant to our political action
committee matching contribution program.
Gregory B. Maffei
December 2014 Employment Arrangement
On December 24, 2014, our compensation committee approved a new compensation arrangement with Mr. Maffei.
The arrangement provides for a five year employment term beginning January 1, 2015 and ending December 31,
2019, with an annual base salary of $960,750, increasing annually by 5% of the prior year’s base salary, and an
annual target cash bonus equal to 250% of the applicable year’s base salary. The arrangement also provides Mr.
Maffei with the opportunity to earn annual performance-based equity incentive awards during the employment term,
as described in more detail below. In connection with the approval of his compensation arrangement, Mr. Maffei
was granted the Term Options defined below. Mr. Maffei’s compensation arrangement was memorialized in the
Maffei Employment Agreement executed on December 29, 2014.
The arrangement provides that, in the event Mr. Maffei is terminated for cause (as defined in the Maffei
Employment Agreement) he will be entitled to only his accrued base salary and any amounts due under applicable
law. If Mr. Maffei is terminated by Liberty Media without cause or if Mr. Maffei terminates his employment for good
Term Options
Also on December 24, 2014, in connection with the approval of his compensation arrangement, Mr. Maffei received
a one-time grant of 3,298,724 options to purchase shares of our then-existing Series C common stock (the Term
Options), which had an exercise price of $34.04 per share. Mr. Maffei’s Term Options have been adjusted in
connection with the April 2016 reclassification and exchange of our common stock into the Liberty SiriusXM
common stock, the Liberty Braves common stock and the Liberty Formula One common stock (the
reclassification) and the June 2016 rights offering with respect to BATRK shares, and as a result, the Term
Options now relate to shares of LSXMK, BATRK and FWONK. One-half of the Term Options vested on the fourth
anniversary of the grant date with the remaining Term Options vesting on the fifth anniversary of the grant date,
subject to Mr. Maffei being employed on such date. The Term Options have a term of seven years.
Upon a change in control (as defined in the Maffei Employment Agreement) prior to Mr. Maffei’s termination or in
the event of Mr. Maffei’s termination for death or disability, all of his unvested Term Options will become
exercisable. If Mr. Maffei is terminated for cause, all of his unvested Term Options will terminate immediately. If
Mr. Maffei is terminated by our company without cause or if he terminates his employment for good reason (as
defined in the Maffei Employment Agreement), then each unvested tranche of each type of Term Options will vest
pro rata based on the number of days elapsed in the vesting period for such tranche since the grant date plus 548
calendar days; however, in the event (i) all members of the Malone Group (as defined in the Maffei Employment
Agreement) cease to beneficially own our company’s securities representing at least 20% of our company’s voting
power, (ii) within 90 to 210 days of clause (i) Mr. Maffei’s employment is terminated by our company without cause
or by Mr. Maffei for good reason and (iii) at the time of clause (i) Mr. Maffei does not beneficially own our company’s
securities representing at least 20% of our company’s voting power, then all unvested Term Options will vest in full
as of the date of Mr. Maffei’s termination. If Mr. Maffei terminates his employment without good reason, then a
portion of each unvested tranche of each type of Term Options will vest pro rata based on the number of days
elapsed in the vesting period for such tranche since the grant date. In the event of a change in control prior to
Mr. Maffei’s termination, all of the Term Options will remain exercisable until the end of the term. If Mr. Maffei is
terminated for cause prior to December 31, 2019 (without a prior change in control occurring), then all vested Term
Options will expire on the 90th day following such termination. In all other events of termination or if Mr. Maffei has
not been terminated prior to December 31, 2019, all vested Term Options will expire at the end of the term.
Annual Awards
Mr. Maffei will receive annual grants of options to purchase shares of LSXMK, BATRK and FWONK with a term of
seven years (the Annual Options) and RSUs with respect to LSXMK, BATRK and FWONK (the Annual RSUs and
together with the Annual Options, the Annual Awards), and Mr. Maffei may elect the portions of his Annual Award
that he desires to be issued in the form of Annual RSUs and Annual Options. For a description of Mr. Maffei’s
target Annual Awards, see “—Compensation Discussion and Analysis—Elements of 2018 Executive
Compensation—Equity Incentive Compensation—Maffei Performance-based Equity Awards.” Pursuant to the
Maffei Employment Agreement, Mr. Maffei receives upfront grants of the Annual Awards and awards from Qurate
Retail in the following combined target amounts: $16 million for calendar year 2015, $17 million for calendar year
Aircraft Usage
We are party to a February 5, 2013 letter agreement with Mr. Maffei, pursuant to which he was entitled to personal
use of corporate aircraft not to exceed 120 hours of flight time per year through the first to occur of (i) the
termination of his employment, subject to any continued right to use the corporate aircraft as described below or
pursuant to the terms of his employment arrangement in effect at the time of the termination or (ii) the cessation of
ownership or lease of corporate aircraft. Effective November 11, 2015, pursuant to a letter agreement between us
and Mr. Maffei of the same date, Mr. Maffei is entitled to 30 additional hours per year of personal flight time if he
reimburses us for such usage through the first to occur of (i) the termination of his employment or (ii) the cessation
of ownership or lease of corporate aircraft. Mr. Maffei will continue to incur taxable income, calculated in
accordance with SIFL, for all personal use of our corporate aircraft under the February 5, 2013 letter agreement.
Mr. Maffei incurs taxable income at the SIFL rates minus amounts paid under time sharing agreements with our
company for travel pursuant to the November 11, 2015 letter agreement. Pursuant to our aircraft time sharing
agreements with Qurate Retail, Liberty TripAdvisor, Liberty Broadband and Liberty Expedia, such entities pay us for
any costs, calculated in accordance with Part 91 of the Federal Aviation Regulations, associated with Mr. Maffei
using our corporate aircraft that are allocable to these entities. Qurate Retail, Liberty TripAdvisor, Liberty Broadband
and Liberty Expedia reimburse us for Mr. Maffei’s use of our corporate aircraft for such entity’s business, as the
case may be, while Qurate Retail also reimburses us for Mr. Maffei’s personal use of our corporate aircraft.
Pursuant to our aircraft time sharing agreements with Mr. Maffei, Mr. Maffei reimburses us for costs associated with
his up to 30 hours of personal use of our corporate aircraft under the November 11, 2015 letter agreement. Flights
where there are no passengers on company-owned aircraft are not charged against the 120 hours of personal flight
time per year allotted to Mr. Maffei if the flight department determines that the use of a NetJets, Inc. supplied
aircraft for a proposed personal flight would be disadvantageous to our company due to (i) use of budgeted hours
under the then current Liberty Media fractional ownership contract with NetJets, Inc. or (ii) higher flight cost as
compared to the cost of using company owned aircraft.
Richard N. Baer
2016 Baer Employment Agreement
On May 24, 2016, the compensation committee of our company approved a new compensation arrangement with
Mr. Baer, which was memorialized in a definitive employment agreement, dated effective as of August 18, 2016 (the
2016 Baer Employment Agreement), between our company and Mr. Baer. The arrangement provides for a four
year employment term beginning January 1, 2017 and ending December 31, 2020 (the employment period)
during which Mr. Baer will continue to serve as Chief Legal Officer of our company, Qurate Retail, GCI Liberty,
Liberty Broadband, Liberty Expedia and Liberty TripAdvisor. The 2016 Baer Employment Agreement memorialized
Mr. Baer’s 2016 annual base salary of $901,500 and provides for its adjustment from time to time. Mr. Baer’s
The 2016 Baer Employment Agreement governs any termination of Mr. Baer’s employment that occurs on or after
January 1, 2017 during the term of such agreement. The 2016 Baer Employment Agreement provides that, in the
event Mr. Baer is terminated for cause (as defined in the 2016 Baer Employment Agreement), he will be entitled to
his accrued but unpaid base salary through the date of termination, any unpaid expenses and other amounts
required to be paid by law. In addition, all unexercised 2016 Term Options, whether vested or unvested, will be
forfeited.
If, however, Mr. Baer terminates his employment for good reason (as defined in the 2016 Baer Employment
Agreement) or if his employment is terminated without cause (as defined in the 2016 Baer Employment
Agreement), then he is entitled to receive his (i) accrued but unpaid base salary, (ii) any unpaid expenses and other
amounts required to be paid by law, (iii) a lump sum payment of any declared but unpaid bonus from the prior year
and (iv) if such termination occurs (x) between January 1, 2017 and March 31, 2018, a lump sum cash payment of
$5.3 million, (y) between April 1, 2018 and March 31, 2019, a lump sum cash payment of $3.5 million or
(z) between April 1, 2019 and the close of business on December 31, 2020, a lump sum cash payment of $1.9
million. In addition, if his employment is terminated by us without cause or by Mr. Baer for good reason (a
protected termination), (a) between January 1, 2017 and December 31, 2019, he will vest in 75% of the original
number of 2016 Term Options (less any options that have previously vested) or (b) during 2020, the unvested
portion of his 2016 Term Options will vest in full, in each case on the date of his termination, and such options will
remain exercisable for the period specified in the applicable award agreement. The award agreements for
Mr. Baer’s annual grants of Performance RSUs (as defined below) will provide that if a protected termination
occurs during the employment period, any Performance RSUs that are outstanding and unvested on the
termination date will remain outstanding until the date that our compensation committee determines whether the
performance criteria applicable to such Performance RSUs were met and will vest to the extent determined by the
committee on the date of such determination.
If Mr. Baer terminates his employment without good reason (as defined in the 2016 Baer Employment Agreement),
he is entitled to receive any accrued but unpaid base salary, any declared but unpaid bonus from the prior year and
any unpaid expenses and other amounts required to be paid by law. In addition, Mr. Baer will forfeit any 2016 Term
Options and Performance RSUs that are unvested on the date of such termination. Any vested 2016 Term Options
will remain exercisable for 90 days after Mr. Baer’s termination without good reason, or, if such termination occurs
after December 31, 2020, for the remainder of the term of such options.
In the case of Mr. Baer’s death or disability (as defined in the 2016 Baer Employment Agreement), such
employment agreement provides for the right for his estate or him, as applicable, to receive any accrued but unpaid
base salary, any unpaid expenses and other amounts required to be paid by law, any declared but unpaid bonus
from the prior year and a lump sum cash payment of $1.9 million. In addition, the 2016 Term Options will vest in full
and remain exercisable for a one year period following his death or disability or, if such termination occurs after
December 31, 2020, for the remainder of the term of such options. Any outstanding but unvested Performance
RSUs will vest immediately in the event of Mr. Baer’s death or disability to the extent not already vested as of the
date of his termination due to death or disability.
As a condition to Mr. Baer’s receipt of any severance payments as a result of his termination, as well as any
acceleration of vesting or extension of exercise periods described in the grant agreements for the equity grants,
Mr. Baer must execute a severance agreement and release in favor of Liberty Media in accordance with the
procedures set forth in the 2016 Baer Employment Agreement.
Although not a party to the 2016 Baer Employment Agreement, Qurate Retail is obligated to reimburse us for its
allocable portion of the above payments (other than payments relating to performance bonuses and payments
relating to equity awards which are directly settled with the applicable issuer) pursuant to the Qurate Retail
Services Agreement.
Compensation deferred under the 2006 deferred compensation plan that otherwise would have been received prior
to 2015 would earn interest income at the rate of 9% per annum, compounded quarterly, for the period of the
deferral. Compensation deferred under the 2006 deferred compensation plan that otherwise would have been
received on or after January 1, 2015 will earn interest income at a rate that is intended to approximate our
company’s general cost of 10-year debt. For amounts deferred on or after January 1, 2015, the compensation
committee may not change the applicable interest rate in effect after a change of control has occurred. For 2018
the rate was 6.25%.
Our board of directors reserves the right to terminate the 2006 deferred compensation plan at any time. An optional
termination by our board of directors will not result in any distribution acceleration.
To identify our median employee, we first determined our employee population as of December 31, 2018, which
consisted of employees located in the U.S., the Dominican Republic, Venezuela and the United Kingdom,
representing all full-time, part-time, seasonal and temporary employees employed by our company and our
consolidated subsidiaries, Sirius XM, Formula 1 and Braves Holdings, on that date. Using information from our
payroll records and Form W-2s (or its equivalent for non-U.S. employees), we then measured each employee’s
gross wages for calendar year 2018, consisting of base salary, commissions, actual bonus payments, long-term
incentive cash payments, if any, realized equity award value and taxable fringe benefits. We did not annualize the
compensation of employees who were new hires or took a leave of absence in 2018. Also, we did not annualize the
compensation of our temporary or seasonal employees. In addition, we did not make any cost-of-living adjustments
to the gross wages information.
We determined that the median employee’s total compensation for calendar year 2018, including any perquisites
and other benefits, in the same manner that we determined the total compensation of our named executive officers
for purposes of the Summary Compensation Table above. The ratio of our chief executive officer’s total annual
compensation to that of the median employee was as follows:
Gregory B.
Maffei
3/14/2018(5) — — 8,758,485 — — — — — — —
LSXMK 3/5/2018 — — — — — — — 632,752(6) 42.50 7,313,816
BATRK 3/5/2018 — — — — — — — 46,052(6) 23.34 296,457
(7)
BATRK 3/5/2018 — — — — 12,279 — — — — 286,592
FWONK 3/5/2018 — — — — — — — 138,655(6) 31.99 1,219,745
FWONK 3/5/2018(7) — — — — 85,590 — — — — 2,738,024
Richard N.
Baer
3/14/2018(5) — — 1,435,019 — — — — — — —
LSXMK 3/5/2018(7) — — — — 16,391 — — — — 696,618
BATRK 3/5/2018(7) — — — — 2,424 — — — — 56,576
(7)
FWONK 3/5/2018 — — — — 12,066 — — — — 385,991
Mark D.
Carleton
3/14/2018(5) — — 1,393,631 — — — — — —
LSXMK 3/5/2018(7) — — — — 12,239 — — — — 520,158
BATRK 3/5/2018(7) — — — — 1,810 — — — — 42,245
FWONK 3/5/2018(7) — — — — 9,010 — — — — 288,230
Albert E.
Rosenthaler
3/14/2018(5) — — 1,393,631 — — — — — —
LSXMK 3/5/2018(7) — — — — 12,239 — — — — 520,158
BATRK 3/5/2018(7) — — — — 1,810 — — — — 42,245
FWONK 3/5/2018(7) — — — — 9,010 — — — — 288,230
(1) Our 2018 performance-based bonus program does not provide for a threshold bonus amount. The program also does not provide
for a target payout amount for any named executive officer that would be payable upon satisfaction of the performance criteria
under the 2018 performance-based bonus program. For the actual bonuses paid by our company see the amounts included for
2018 in the column entitled Non-Equity Incentive Plan Compensation in the “Summary Compensation Table” above.
(2) Represents the maximum amount that would have been payable to each named executive officer assuming the Bonus Threshold
was met in order to permit the maximum bonus amounts to have been payable. For more information on this performance bonus
program, see “—Compensation Discussion and Analysis—Elements of 2018 Executive Compensation—2018 Performance-based
Bonuses.”
(3) The terms of the 2018 Maffei RSUs and the 2018 Chief RSUs do not provide for a threshold amount that would be payable upon
satisfaction of the performance criteria established by the compensation committee. The amounts in the Target column represent
the target amount that would have been payable to the named executive officer assuming (x) maximum achievement of the Maffei
RSU Threshold and the Chief Threshold was attained and (y) our compensation committee determined not to reduce such payout
after considering a combination of the criteria established by our compensation committee in March 2018. For the actual 2018
Annual Options, 2018 Maffei RSUs and 2018 Chief RSUs that vested see “—Compensation Discussion and Analysis—Elements
of 2018 Executive Compensation—Equity Incentive Compensation—Maffei Performance-based Equity Awards” and
“—Compensation Discussion and Analysis—Elements of 2018 Executive Compensation—Equity Incentive Compensation—Annual
Performance Awards” above.
Amount
Name ($)
John C. Malone 215,628
Gregory B. Maffei 397,703
Richard N. Baer —
Mark D. Carleton 331,289
Albert E. Rosenthaler —
(2) In our prior year proxy statements, we reported the following above-market earnings that were credited as interest to the applicable
officer’s deferred compensation accounts during the years reported:
Amount ($)
Name 2017 2016 2015
John C. Malone 224,672 232,747 239,961
Gregory B. Maffei 401,887 335,068 99,232
Richard N. Baer — — —
Mark D. Carleton 304,384 199,301 n/a
Albert E. Rosenthaler — — —
The amounts provided in the tables are based on the closing market prices on December 31, 2018 for our LSXMA
common stock, which was $36.80, our LSXMK common stock, which was $36.98, our BATRA common stock,
which was $24.94, our BATRK common stock, which was $24.89, our FWONA common stock, which was $29.72,
and our FWONK common stock, which was $30.70. The value of the options shown in the table is based on the
spread between the exercise price of the award and the applicable closing market price. Because the exercise
prices of certain stock options held by Messrs. Maffei and Rosenthaler were more than the applicable closing
market price of LSXMK and FWONK shares on December 31, 2018, these options have been excluded from the
table below. The value of the RSUs shown in the table is based on the applicable closing market price and the
number of RSUs unvested.
No immediate distributions under the 2006 deferred compensation plan are permitted as a result of a termination
for cause or a termination without cause or for good reason (other than pursuant to the compensation committee’s
right to distribute certain de minimus amounts from an officer’s deferred compensation account). In addition, we do
not have an acceleration right to pay out account balances to the named executive officers upon a voluntary
termination or a termination due to death or disability. However, the named executive officer may file an election at
the time of the deferral to receive distributions under the 2006 deferred compensation plan upon his separation
from service, including any of the types of termination above. For purposes of the tabular presentation below, we
have assumed that the named executive officer has elected to receive payout of all deferred compensation upon
his separation from service, including interest. The 2006 deferred compensation plan also provides our
compensation committee with the option of terminating the plan 30 days preceding or within 12 months after a
change of control and distributing the account balances (which option is assumed to have been exercised for
purposes of the tabular presentation below).
The circumstances giving rise to these potential payments and a brief summary of the provisions governing their
payout are described below and in the footnotes to the table (other than those described under “—Executive
Compensation Arrangements,” which are incorporated by reference herein):
Voluntary Termination
Each of the named executive officers (other than Mr. Malone) holds equity awards that were issued under our
existing incentive plans. Under these plans and the related award agreements, in the event of a voluntary
termination of his employment with our company for any reason, each named executive officer (other than Mr.
Malone) would only have a right to the equity grants that vested prior to his termination date, except that in 2018 Mr.
Maffei had certain acceleration rights with respect to one or more of his equity awards upon a voluntary
termination. Also, if Mr. Maffei voluntarily terminated his employment as of December 31, 2018, his 2018 Annual
RSUs would remain outstanding until any performance criteria had been determined to have been met or not and
would vest to the extent determined by the compensation committee. Mr. Baer would have forfeited his 2016 Term
Options and his 2018 Chief RSUs if he had voluntarily terminated his employment as of December 31, 2018. See
“—Executive Compensation Arrangements—Gregory B. Maffei” and “—Executive Compensation Arrangements—
Richard N. Baer” above. Mr. Carleton and Mr. Rosenthaler are not entitled to any severance payments or other
benefits upon a voluntary termination of his employment. The foregoing discussion assumes that the named
executive officers voluntarily terminated his respective employment without good reason. See “—Termination
Without Cause or for Good Reason” below for a discussion of potential payments and benefits upon a named
executive officer’s voluntary termination of his employment for good reason.
All outstanding equity grants constituting options, whether unvested or vested but not yet exercised, and all equity
grants constituting unvested RSUs under the existing incentive plans would be forfeited by any named executive
officer (other than Mr. Maffei in the case of equity grants constituting vested options or similar rights) who is
terminated for “cause.” However, if Mr. Maffei’s employment was terminated for cause as of December 31, 2018,
his 2018 Annual RSUs would remain outstanding until any performance criteria had been determined to have been
met or not and would vest to the extent determined by the compensation committee. The existing incentive plans,
which govern the awards unless there is a different definition in the applicable award agreement, define “cause” as
insubordination, dishonesty, incompetence, moral turpitude, other misconduct of any kind and the refusal to perform
his duties and responsibilities for any reason other than illness or incapacity; provided that, if such termination is
within 12 months after a change in control (as described below), “cause” means a felony conviction for fraud,
misappropriation or embezzlement. Mr. Maffei has certain continuing rights to exercise vested options or similar
rights following a termination for cause under his employment agreement, and the employment agreement of Mr.
Maffei has a definition of cause that is different from the definition under the incentive plans. See “—Executive
Compensation Arrangements” above.
Death
In the event of death of any of the named executive officers, the existing incentive plans and applicable award
agreements provide for vesting in full of any outstanding options and the lapse of restrictions on any RSU awards,
except that if Mr. Maffei’s employment was terminated due to death on December 31, 2018, his 2018 Annual RSUs
would remain outstanding until any performance criteria had been determined to have been met or not and would
vest to the extent determined by the compensation committee. Each of Mr. Malone, Mr. Maffei and Mr. Baer is also
entitled to certain payments and other benefits if he dies while employed by our company. See “—Executive
Compensation Arrangements” above.
No amounts are shown for payments pursuant to life insurance policies, which we make available to all our
employees.
Disability
If the employment of any of the named executive officers is terminated due to disability, which is defined in the
existing incentive plans or applicable award agreements, such plans or agreements provide for vesting in full of any
outstanding options and the lapse of restrictions on any RSU awards, except that if Mr. Maffei’s employment was
terminated due to disability on December 31, 2018, his 2018 Annual RSUs would remain outstanding until any
performance criteria had been determined to have been met or not and become vested to the extent determined by
the compensation committee. Each of Mr. Malone, Mr. Maffei and Mr. Baer is also entitled to certain payments and
other benefits upon a termination of his employment due to disability. See “Executive Compensation Arrangements”
above.
No amounts are shown for payments pursuant to short-term and long-term disability policies, which we make
available to all our employees.
In case of a change in control, the incentive plans provide for vesting in full of any outstanding options and the
lapse of restrictions on any RSU awards held by the named executive officers. A change in control is generally
defined as:
• The acquisition by a non-exempt person (as defined in the incentive plans) of beneficial ownership of at least
20% of the combined voting power of the then outstanding shares of our company ordinarily having the right
to vote in the election of directors, other than pursuant to a transaction approved by our board of directors.
• The individuals constituting our board of directors over any two consecutive years cease to constitute at least a
majority of the board, subject to certain exceptions that permit the board to approve new members by approval
of at least two-thirds of the remaining directors.
• Any merger, consolidation or binding share exchange that causes the persons who were common stockholders
of our company immediately prior thereto to lose their proportionate interest in the common stock or voting
power of the successor or to have less than a majority of the combined voting power of the then outstanding
shares ordinarily having the right to vote in the election of directors, the sale of substantially all of the assets of
the company or the dissolution of the company.
In the case of a change in control described in the last bullet point, our compensation committee may determine not
to accelerate the existing equity awards of the named executive officers if equivalent awards will be substituted for
the existing awards, except that Mr. Maffei’s Term Options may also be subject to acceleration upon a change in
control, including of the type described in the last bullet point, pursuant to the terms of his employment agreement.
See “—Executive Compensation Arrangements—Gregory B. Maffei” above. For purposes of the tabular
presentation below, we have assumed that our named executive officers’ existing unvested equity awards would
vest in full in the case of a change in control described in the last bullet.
(1) Under Mr. Malone’s employment agreement, which was assigned to our company in 2013, if his employment had been terminated,
as of December 31, 2018, at our election (other than for death or cause) (whether before or after a change in control) or upon
Mr. Malone’s prior written notice, he would have been entitled to a lump sum severance payment of $19,500 payable upon
termination, which is equal to five years of his current annual salary of $3,900. See “—Executive Compensation Arrangements—
John C. Malone” above. Pursuant to the services agreement, 25% of such lump sum severance payment would have been
allocable to Qurate Retail.
(2) As described above, Mr. Malone began receiving 240 consecutive monthly installment severance payments in February 2009
pursuant to the terms of his amended employment agreement. The number included in the table represents the aggregate amount
of the payments remaining as of December 31, 2018. With respect to periods following the termination of his employment, the
foregoing payments are conditioned on Mr. Malone’s compliance with the confidentiality, non-competition, non-solicitation and
non-interference covenants contained in his employment agreement. See “—Executive Compensation Arrangements—John C.
Malone” above.
Fees for service on our audit committee, compensation committee and nominating and corporate governance
committee are the same for 2018 and 2019, with each member thereof receiving an additional annual fee of
$30,000, $10,000 and $10,000, respectively, for his or her participation on each such committee, except that the
chairman of each such committee instead receives an additional annual fee of $40,000, $20,000 and $20,000,
respectively, for his participation on that committee. With respect to our executive committee, each member thereof
who is not an employee of our company receives an additional annual fee of $10,000 for his participation on that
committee. The cash portion of the director fees and the fees for participation on committees are payable quarterly
in arrears.
Charitable Contributions
If a director makes a donation to our political action committee, we will make a matching donation to a charity of his
or her choice in an amount not to exceed $10,000.
Awards granted to our nonemployee directors under the 2017 incentive plan are administered by our board of
directors or our compensation committee. Our board of directors has full power and authority to grant nonemployee
directors the awards described below and to determine the terms and conditions under which any awards are
made. The 2017 incentive plan is designed to provide our nonemployee directors with additional remuneration for
services rendered, to encourage their investment in our common stock and to aid in attracting persons of
exceptional ability to become nonemployee directors of our company. Our board of directors may grant
non-qualified stock options, SARs, restricted shares, restricted stock units and cash awards or any combination of
the foregoing under the 2017 incentive plan.
The maximum number of shares of our common stock with respect to which awards may be granted under the
2017 incentive plan is 50 million shares, subject to anti-dilution and other adjustment provisions of the 2017
incentive plan. No nonemployee director may be granted during any calendar year awards having a value (as
determined on the grant date of such award) that would be in excess of $2 million. Shares of our common stock
issuable pursuant to awards made under the 2017 incentive plan will be made available from either authorized but
unissued shares of our common stock or shares of our common stock that we have issued but reacquired,
including shares purchased in the open market.
As described above, in 2013, our company’s board of directors adopted the TSAP, which governs the terms and
conditions of awards with respect to our common stock issued in connection with adjustments made to awards
relating to our predecessor’s common stock that were granted prior to 2013.
In 2018, each of our nonemployee directors was given a choice of receiving his or her annual equity grant in the
form of RSUs or options.
Pursuant to our director compensation policy described above and the 2017 incentive plan, we granted the
following RSU awards in December 2018:
These RSUs will vest on the first anniversary of the grant date, or on such earlier date that the grantee ceases to
be a director because of death or disability, and, unless our board of directors determines otherwise, will be
forfeited if the grantee resigns or is removed from the board before the vesting date.
Pursuant to our director compensation policy described above and the 2017 incentive plan, we granted the
following stock option awards in December 2018:
These options will become exercisable on the first anniversary of the grant date, or on such earlier date that the
grantee ceases to be a director because of death or disability, and, unless our board determines otherwise, will be
terminated without becoming exercisable if the grantee resigns or is removed from the board before the vesting
date. Once vested, the options will remain exercisable until the seventh anniversary of the grant date or, if earlier,
until the first business day following the first anniversary of the date the grantee ceases to be a director.
In March 2016, our board of directors adopted stock ownership guidelines that require each nonemployee director
to own shares of our company’s stock equal to at least three times the value of their annual cash retainer fees.
Nonemployee directors will have five years from the later of (i) the effective date of the guidelines and (ii) the
director’s initial appointment to our board to comply with these guidelines.
Effective beginning in the fourth quarter of 2013, directors of our company are eligible to participate in the Liberty
Media Corporation Nonemployee Director Deferred Compensation Plan (the director deferred compensation
plan), pursuant to which eligible directors of our company can elect to defer all or any portion of their annual cash
fees that they would otherwise be entitled to receive. The deferral of such annual cash fees shall be effected by a
reduction in the quarterly payment of such annual cash fees by the percentage specified in the director’s election.
Elections are required to be made in advance of certain deadlines, which generally must be on or before the close
of business on December 31 of the year prior to the year to which the director’s election will apply, and elections
must include the form of distribution, such as a lump-sum payment or substantially equal installments over a period
not to exceed ten years. Compensation deferred under the director deferred compensation plan that otherwise
would have been received prior to 2015 would earn interest income at the rate of 9% per annum, compounded
quarterly, for the period of the deferral. Compensation deferred under the director deferred compensation plan that
otherwise would have been received on or after January 1, 2015 will earn interest income at a rate that is intended
to approximate our company’s general cost of 10-year debt. For 2016, 2017 and 2018, the rate was 6.25%, 6.5%
and 6.25%, respectively.
(1) John C. Malone and Gregory B. Maffei, each of whom is a director of our company and a named executive officer, received no
compensation for serving as directors of our company during 2018.
(2) As of December 31, 2018, our directors (other than Messrs. Malone and Maffei, whose equity awards are listed in “Outstanding
Equity Awards at Fiscal Year-End” above) held the following equity awards with respect to shares of our common stock:
(3) The aggregate grant date fair value of the stock options and RSU awards has been computed in accordance with FASB
ASC Topic 718, but (pursuant to SEC regulations) without reduction for estimated forfeitures. For a description of the assumptions
applied in these calculations, see Note 14 to our consolidated financial statements for the year ended December 31, 2018 (which
are included in the 2018 Form 10-K).
(4) Includes the following amounts earned and deferred under the director deferred compensation plan:
(5) We make available to our directors tickets to various sporting events with no aggregate incremental cost attributable to any single
person.
(6) Includes the following amounts of health insurance premiums paid by our company for the benefit of the following directors:
Amount
Name ($)
Robert R. Bennett 20,368
Brian M. Deevy 20,368
M. Ian G. Gilchrist 20,368
David E. Rapley 20,368
Larry E. Romrell 20,368
Andrea L. Wong 16,645
(7) Includes charitable contributions made on behalf of each of Mr. Gilchrist and Ms. Wong pursuant to our political action committee
matching contribution program.
Amount
Name ($)
M. Ian G. Gilchrist 2,500
Andrea L. Wong 1,000
(1) Upon adoption of the Liberty Media Corporation 2017 Omnibus Incentive Plan, the board of directors ceased making any further
grants under the prior plans, including the Liberty Media Corporation 2013 Incentive Plan and the Liberty Media Corporation 2013
Nonemployee Director Incentive Plan.
(2) The Liberty Media Corporation 2017 Omnibus Incentive Plan permits grants of, or with respect to, shares of any series of our
common stock, subject to a single aggregate limit.
(3) The Liberty Media Corporation Transitional Stock Adjustment Plan governs the terms and conditions of awards with respect to our
company’s common stock that were granted in connection with adjustments made to awards relating to our predecessor’s common
stock that were granted prior to 2013. As a result, no further grants are permitted under this plan.
STOCKHOLDER PROPOSALS
This proxy statement relates to our annual meeting of stockholders for the calendar year 2019 which will take place
on May 30, 2019. Based solely on the date of our 2019 annual meeting and the date of this proxy statement, (i) a
stockholder proposal must be submitted in writing to our Corporate Secretary and received at our executive offices
at 12300 Liberty Boulevard, Englewood, Colorado 80112, by the close of business on December 31, 2019 in order
to be eligible for inclusion in our proxy materials for the annual meeting of stockholders for the calendar year 2020
(the 2020 annual meeting), and (ii) a stockholder proposal, or any nomination by stockholders of a person or
persons for election to the board of directors, must be received at our executive offices at the foregoing address not
earlier than February 28, 2020 and not later than March 31, 2020 to be considered for presentation at the 2020
annual meeting. We currently anticipate that the 2020 annual meeting will be held during the second quarter of
2020. If the 2020 annual meeting takes place more than 30 days before or 30 days after May 30, 2020 (the
anniversary of the 2019 annual meeting), a stockholder proposal, or any nomination by stockholders of a person or
persons for election to the board of directors, will instead be required to be received at our executive offices at the
foregoing address not later than the close of business on the tenth day following the first day on which notice of the
date of the 2020 annual meeting is communicated to stockholders or public disclosure of the date of the 2020
annual meeting is made, whichever occurs first, in order to be considered for presentation at the 2020 annual
meeting.
All stockholder proposals for inclusion in our proxy materials will be subject to the requirements of the proxy rules
adopted under the Exchange Act, our charter and bylaws and Delaware law.
ADDITIONAL INFORMATION
We file periodic reports, proxy materials and other information with the SEC. You may read and copy any document
that we file at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. You may
also inspect such filings on the Internet website maintained by the SEC at www.sec.gov. Additional information can
also be found on our website at www.libertymedia.com. (Information contained on any website referenced in this
proxy statement is not incorporated by reference in this proxy statement.) If you would like to receive a copy of
the 2018 Form 10-K, or any of the exhibits listed therein, please call or submit a request in writing to
Investor Relations, Liberty Media Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112,
Tel. No. (877) 772-1518, and we will provide you with the 2018 Form 10-K without charge, or any of the
exhibits listed therein upon the payment of a nominal fee (which fee will be limited to the expenses we
incur in providing you with the requested exhibits).
Market Information
Liberty Media Corporation (“Liberty,” the “Company,” “we,” “us,” and “our”) has three classes of stock. Series A,
Series B and Series C Liberty SiriusXM common stock trade under the symbols LSXMA/B/K, respectively; Series A,
Series B and Series C Liberty Braves common stock trade or are quoted under the symbols BATRA/B/K respectively; and
Series A, Series B and Series C Liberty Media common stock traded or were quoted under the symbols LMCA/B/K,
respectively. Shortly following the closing of the acquisition of Formula 1 on January 23, 2017 (the “Second Closing”),
the Liberty Media Group and Liberty Media common stock were renamed the Liberty Formula One Group (the “Formula
One Group”) and the Liberty Formula One common stock, respectively, and the corresponding ticker symbols for the
Series A, Series B and Series C Liberty Media common stock were changed to FWONA/B/K, respectively. Each series
(Series A, Series B and Series C) of the Liberty SiriusXM common stock trades on the Nasdaq Global Select Market.
Series A and Series C Liberty Braves common stock trade on the Nasdaq Global Select Stock Market, and Series B Liberty
Braves common stock is quoted on the OTC Markets. Series A and Series C Liberty Formula One common stock continue
to trade on the Nasdaq Global Select Market and the Series B Liberty Formula One common stock continues to be quoted
on the OTC Markets. Although the Second Closing, and the corresponding tracking stock name and the ticker symbol
change, were not completed until January 23 and January 24, 2017, respectively, historical information of the Liberty
Media Group and Liberty Media common stock is referred to herein as the Formula One Group and Liberty Formula One
common stock, respectively. Stock price information for securities traded on the Nasdaq Global Select Market can be
found on the Nasdaq’s website at www.nasdaq.com.
The following tables set forth the range of high and low sales prices of our Series B Liberty SiriusXM common
stock, Series B Liberty Braves common stock and Series B Liberty Formula One common stock for the years ended
December 31, 2018 and 2017. Although our Series B Liberty SiriusXM common stock is traded on the Nasdaq Global
Select Market, an established public trading market does not exist for the stock, as it is not actively traded. Additionally,
there is no established public trading market for our Series B Liberty Braves common stock and our Series B Liberty
Formula One common stock, which are quoted on OTC Markets. The over-the-counter market quotations for our series B
Liberty Braves common stock and our Series B Liberty Formula One common stock reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
2018
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47.61 38.62
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47.80 40.78
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49.94 45.61
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 43.24 35.46
F-1
Braves Group
Series B (BATRB)
High Low
2017
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 21.00 21.00
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25.80 23.92
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27.64 25.10
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27.54 22.40
2018
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24.50 24.50
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26.00 22.95
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27.00 25.75
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27.00 24.09
2018
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36.81 30.10
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32.62 28.00
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36.50 32.50
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31.75 28.55
Holders
The foregoing numbers of record holders do not include the number of stockholders whose shares are held
nominally by banks, brokerage houses or other institutions, but include each such institution as one shareholder.
Dividends
We have not paid any cash dividends on our common stock, and we have no present intention of so doing. Payment
of cash dividends, if any, in the future will be determined by our board of directors in light of our earnings, financial
condition and other relevant considerations.
F-2
Securities Authorized for Issuance Under Equity Compensation Plans
Information required by this item is incorporated by reference to our definitive proxy statement for our 2019
Annual Meeting of Stockholders.
On January 11, 2013 (ratified February 26, 2013) Liberty announced that its board of directors authorized
$450 million of repurchases of Liberty Media Corporation common stock from that day forward. Additionally, in
connection with the Broadband Spin-Off, an additional authorization of $300 million in Liberty share repurchases was
approved by the Liberty board of directors on October 9, 2014. In August 2015, our board of directors authorized an
additional $1 billion of Liberty Media Corporation common stock repurchases. The amount previously authorized for share
repurchases may be used to repurchase Series A and Series C of each of Liberty SiriusXM common stock, Liberty Braves
common stock and Liberty Formula One common stock.
A summary of the repurchase activity for the three months ended December 31, 2018 is as follows:
There were no repurchases of Series A Liberty SiriusXM common stock, Liberty Formula One common stock or
Liberty Braves common stock during the three months ended December 31, 2018.
During the three months ended December 31, 2018, no shares of Series A and 68 shares of Series C Liberty
Formula One common stock, no shares of Series A and 272 shares of Series C Liberty SiriusXM common stock, and no
shares of Series A and 27 shares of Series C Liberty Braves common stock were surrendered by certain of our officers and
employees to pay withholding taxes and other deductions in connection with the vesting of their restricted stock and
restricted stock units.
F-3
Selected Financial Data.
The following tables present selected historical financial statement information relating to our financial condition
and results of operations for the past five years. Certain prior period amounts have been reclassified for comparability with
the current year presentation. The following data should be read in conjunction with the accompanying consolidated
financial statements.
December 31,
2018 2017 2016 2015 2014
amounts in millions
Summary Balance Sheet Data:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 358 1,029 562 201 681
Investments in debt and equity securities . . . . . . . . . . . . . . . . . . . . $ 1,278 1,114 1,309 533 816
Investment in affiliates, accounted for using the equity method . . $ 1,641 1,750 1,117 1,115 851
Intangible assets not subject to amortization (1) . . . . . . . . . . . . . . . $ 28,060 28,057 24,018 24,018 24,018
Intangible assets subject to amortization, net (1) . . . . . . . . . . . . . . $ 5,715 6,192 1,072 1,097 1,166
Total assets (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,828 41,996 31,377 29,798 30,269
Current portion of deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,079 1,941 1,877 1,797 1,641
Long-term debt, including current portion (1). . . . . . . . . . . . . . . . . $ 13,388 13,954 8,018 6,881 5,845
Deferred tax liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,651 1,478 2,025 1,667 1,507
Stockholders' equity (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,595 16,943 11,756 10,933 11,398
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,103 5,631 5,960 7,198 8,778
F-4
(1) On September 7, 2016 Liberty, through its indirect wholly owned subsidiary Liberty GR Cayman Acquisition
Company, entered into two definitive stock purchase agreements relating to the acquisition of Delta Topco Limited
(“Delta Topco”), the parent company of Formula 1, a global motorsports business, from a consortium of sellers led by
CVC Capital Partners (“CVC”). The transactions contemplated by the first purchase agreement were completed on
September 7, 2016 and provided for Liberty’s acquisition of slightly less than a 20% minority stake in Formula 1 on
an undiluted basis for $746 million, funded entirely in cash (which is equal to $821 million in consideration less a
$75 million holdback to be repaid by Liberty to selling stockholders upon completion of the acquisition). On
October 27, 2016, under the terms of the first purchase agreement, Liberty acquired an additional incremental equity
interest in Delta Topco, maintaining Liberty’s investment in Delta Topco on an undiluted basis and increasing slightly
to 19.1% on a fully diluted basis. Prior to the Second Closing, CVC continued to be the controlling shareholder of
Formula 1, and Liberty did not have any voting interests or board representation in Formula 1. As a result, we
concluded that we did not have significant influence over Formula 1, and therefore accounted for our investment in
Formula 1 as a cost investment until the completion of the Second Closing. The Second Closing was completed on
January 23, 2017, at which time we began consolidating Formula 1. See note 5 to the accompanying consolidated
financial statements for additional information related to the acquisition of Formula 1.
(2) During November 2015, Liberty’s board of directors authorized management to pursue a recapitalization of the
Company’s common stock into three new tracking stock groups, one to be designated as the Liberty Braves common
stock, one to be designated as the Liberty Media common stock and one to be designated as the Liberty SiriusXM
common stock, and to cause to be distributed subscription rights related to the Liberty Braves common stock following
the creation of the new tracking stocks. The Recapitalization was completed on April 15, 2016 and the newly issued
shares commenced trading or quotation in the regular way on the Nasdaq Global Select Market or the OTC Markets,
as applicable, on Monday, April 18, 2016. In the Recapitalization, each issued and outstanding share of Liberty’s
existing common stock was reclassified and exchanged for (a) 1 share of the corresponding series of Liberty SiriusXM
common stock, (b) 0.1 of a share of the corresponding series of Liberty Braves common stock and (c) 0.25 of a share
of the corresponding series of Liberty Media common stock on April 15, 2016. Cash was paid in lieu of the issuance
of any fractional shares.
Following the creation of the tracking stocks, Series A, Series B and Series C Liberty SiriusXM common stock trade
under the symbols LSXMA/B/K, respectively; Series A, Series B and Series C Liberty Braves common stock trade or
are quoted under the symbols BATRA/B/K respectively; and Series A, Series B and Series C Liberty Media common
stock traded or were quoted under the symbols LMCA/B/K, respectively. Shortly following the Second Closing, the
Liberty Media Group and Liberty Media common stock were renamed the Liberty Formula One Group (the “Formula
One Group”) and the Liberty Formula One common stock, respectively, and the corresponding ticker symbols for the
Series A, Series B and Series C Liberty Media common stock were changed to FWONA/B/K, respectively. Each series
(Series A, Series B and Series C) of the Liberty SiriusXM common stock trades on the Nasdaq Global Select Market.
Series A and Series C Liberty Braves common stock trade on the Nasdaq Global Select Stock Market, and Series B
Liberty Braves common stock is quoted on the OTC Markets. Series A and Series C Liberty Formula One common
stock continue to trade on the Nasdaq Global Select Market, and the Series B Liberty Formula One common stock
continues to be quoted on the OTC Markets.
(3) On July 23, 2014, holders of Series A and Series B Liberty Media Corporation common stock as of 5:00 p.m., New
York City, time on July 7, 2014, the record date for the dividend, received a dividend of two shares of Series C Liberty
Media Corporation common stock for each share of Series A or Series B Liberty Media Corporation common stock
held by them as of the record date. The impact on basic and diluted earnings per share of the Series C Liberty Media
Corporation common stock issuance has been reflected retroactively in all periods presented due to the treatment of
the dividend as a stock split for accounting purposes.
F-5
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information concerning our results of operations and financial
condition. This discussion should be read in conjunction with our accompanying consolidated financial statements and the
notes thereto. See note 3 in the accompanying consolidated financial statements for an overview of accounting standards
that we have adopted or that we plan to adopt that have had or may have an impact on our financial statements.
Overview
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 Inc. (“SIRIUS XM”).
SIRIUS XM provides a subscription based satellite radio service. SIRIUS XM also transmits a larger set of music and
other channels through SIRIUS XM’s streaming service. SIRIUS XM’s streaming services is available online and through
applications for mobile devices, home devices and other consumer electronic equipment. SIRIUS XM also provides
connected vehicle services which are designed to enhance the safety, security and driving experience for vehicle operators
while providing marketing and operational benefits to automakers and their dealers.
On September 7, 2016, Liberty, through its indirect wholly owned subsidiary Liberty GR Cayman Acquisition
Company, entered into two definitive stock purchase agreements relating to the acquisition of Delta Topco, the parent
company of Formula 1. The transactions contemplated by the first purchase agreement were completed on September 7,
2016, resulting in the acquisition of slightly less than a 20% minority stake in Formula 1 on an undiluted basis. On
October 27, 2016 under the terms of the first purchase agreement, Liberty acquired an additional incremental equity interest
of Delta Topco, maintaining Liberty’s investment in Delta Topco on an undiluted basis and increasing slightly to 19.1%
on a fully diluted basis. Liberty acquired 100% of the fully diluted equity interests of Delta Topco, other than a nominal
number of shares held by certain Formula 1 teams, in a closing under the second purchase agreement (and following the
unwind of the first purchase agreement) on January 23, 2017. See note 5 to the accompanying consolidated financial
statements for additional information related to the acquisition. Liberty’s acquired interest in Delta Topco and by extension
Formula 1, along with existing Formula 1 cash and debt (which is non-recourse to Liberty), was attributed to the Formula
One Group upon completion of the Second Closing. Formula 1 is a reportable segment.
Our “Corporate and Other” category includes a consolidated subsidiary, Braves Holdings, LLC (“Braves
Holdings”) and corporate expenses. In addition, we hold an ownership interest in Live Nation Entertainment, Inc. (“Live
Nation”), which is accounted for as an equity method investment at December 31, 2018 and is included in corporate and
other. We also maintain minority positions in other public companies.
As discussed in note 2 of the accompanying consolidated financial statements, on April 15, 2016, Liberty
completed the Recapitalization. Upon completion of the Second Closing, as discussed below, the Liberty Media Group
was renamed the Formula One Group. Although the Recapitalization was not effective for all periods presented herein,
information has been presented among the tracking stock groups for all periods presented as if the Recapitalization had
been completed for all periods presented. This attribution of historical financial information does not purport to be what
actual results and balances would have been if the Recapitalization had actually occurred and been in place during the
periods prior to April 15, 2016. Operating results prior to the Recapitalization are attributed to Liberty stockholders in the
aggregate.
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, Formula 1 or 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
F-6
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 term “Liberty SiriusXM Group” does not represent a separate legal entity, rather it represents those
businesses, assets and liabilities that have been attributed to that group. The Liberty SiriusXM Group is primarily
comprised of Liberty’s subsidiary, SIRIUS XM, corporate cash, investments in debt securities, Liberty’s 2.125%
Exchangeable Senior Debentures due 2048 and a margin loan obligation incurred by a wholly-owned special purpose
subsidiary of Liberty. As of December 31, 2018, the Liberty SiriusXM Group has cash and cash equivalents of
approximately $91 million, which includes $54 million of subsidiary cash.
SIRIUS XM is the only operating subsidiary attributed to the Liberty SiriusXM Group. In the event SIRIUS XM
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. On
February 1, 2019, SIRIUS XM acquired Pandora Media, Inc. (“Pandora”). See note 7 to the accompanying consolidated
financial statements for more information regarding the acquisition of Pandora.
The term “Braves Group” does not represent a separate legal entity, rather it represents those businesses, assets
and liabilities that have been attributed to that group. The Braves Group is primarily comprised of Braves Holdings, which
indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC,” the “Braves,” or the “Atlanta Braves”) and
certain assets and liabilities associated with ANLBC’s stadium and mixed use development project (the “Development
Project”) and corporate cash. As of December 31, 2018, the Braves Group has cash and cash equivalents of approximately
$107 million, which includes $40 million of subsidiary cash. Additionally, as discussed below, the Formula One Group
retains an intergroup interest in the Braves Group. See note 2 to the accompanying consolidated financial statements for
information regarding the Series C Liberty Braves common stock rights offering.
The term “Formula One Group” does not represent a separate legal entity, rather it represents those businesses,
assets and liabilities that have been attributed to that group. As of December 31, 2018, the Formula One Group (formerly
the Liberty Media Group) is primarily 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, Liberty’s 1.375% Cash Convertible Notes due 2023 and related financial instruments, Liberty’s 1% Cash
Convertible Notes due 2023, Liberty’s 2.25% Exchangeable Senior Debentures due 2046 and Liberty’s 2.25%
Exchangeable Senior Debentures due 2048. Following the creation of the tracking stocks and the closing of the Series C
Liberty Braves common stock rights offering, the Formula One Group retains an intergroup interest in the Braves Group
of approximately 15.1%, valued at $226 million, as of December 31, 2018. As of December 31, 2018, the Formula One
Group had cash and cash equivalents of approximately $160 million, which includes $30 million of subsidiary cash.
SIRIUS XM. SIRIUS XM is focused on several initiatives to increase its revenue. SIRIUS XM regularly
evaluates its business plans and strategy. Currently, its strategies include:
F-7
SIRIUS XM faces certain key challenges in its attempt to meet these goals, including:
• its ability to convince owners and lessees of new and previously owned vehicles that include satellite radios
to purchase subscriptions to its service;
• potential loss of subscribers due to economic conditions and competition from other entertainment providers;
• competition for both listeners and advertisers, including providers of radio and other audio services;
• the operational performance of its satellites;
• the effectiveness of integration of acquired businesses and assets into its operations;
• the performance of its manufacturers, programming providers, vendors, and retailers; and
• unfavorable changes in legislation.
Formula 1. Formula 1’s goal is to further broaden and increase the global scale and appeal of the FIA Formula
One World Championship (the “World Championship”) in order to improve the overall value of Formula 1 as a sport and
its financial performance. Key factors of this strategy include:
• continuing to seek and identify opportunities to expand and develop the Event calendar and bring Events to
attractive and/or strategically important new markets outside of Europe, which typically have higher race
promotion fees, while continuing to build on the foundation of the sport in Europe;
• developing advertising and sponsorship revenue, including increasing sales of Event-based packages and
under the Global Partner program, and exploring opportunities in underexploited product categories;
• capturing opportunities created by media’s evolution, including the growth of social media and the
development of Formula 1’s digital media assets;
• building up the entertainment experience for fans and engaging with new fans on a global basis to further
drive race attendance and television viewership; and
• working with stakeholders within the sport to improve the sustainability and on-track competitive balance of
the World Championship and the long term financial stability of the participating Teams.
F-8
Results of Operations—Consolidated
General. We provide in the tables below information regarding our Consolidated Operating Results and Other
Income and Expense, as well as information regarding the contribution to those items from our reportable segments. The
“corporate and other” category consists of those assets or businesses which do not qualify as a separate reportable segment.
For a more detailed discussion and analysis of the financial results of our principal reportable segment, see “Results of
Operations—Businesses” below.
Adjusted OIBDA
Liberty SiriusXM Group
SIRIUS XM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,230 2,109 1,853
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16) (15) (15)
Total Liberty SiriusXM Group . . . . . . . . . . . . . . . . . . . . . . . . 2,214 2,094 1,838
Braves Group
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 2 (20)
Total Braves Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 2 (20)
Formula One Group
Formula 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400 438 —
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) (41) (45)
Total Formula One Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 397 (45)
Consolidated Liberty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,677 2,493 1,773
F-9
Revenue. Our consolidated revenue increased $446 million and $2,318 million for the years ended
December 31, 2018 and 2017, respectively, as compared to the corresponding prior year periods. The 2018 increase was
driven by revenue growth at SIRIUS XM, Braves Holdings and Formula 1 of $346 million, $56 million and $44 million,
respectively. The 2017 increase was primarily driven by $1,783 million of Formula 1 revenue, as a result of the Company’s
acquisition of Formula 1 on January 23, 2017, and revenue growth at SIRIUS XM of $411 million. Additionally, Braves
Holdings revenue increased $124 million during the year ended December 31, 2017, as compared to the prior year. See
“Results of Operations—Businesses” below for a more complete discussion of the results of operations of SIRIUS XM,
Formula 1 and Braves Holdings.
Operating income. Our consolidated operating income increased $117 million and decreased $340 million for
the years ended December 31, 2018 and 2017, respectively, as compared to the corresponding prior years. Operating losses
decreased $114 million and operating income increased $73 million for Braves Group and Liberty SiriusXM Group,
respectively, and operating losses increased $70 million for Formula One Group during 2018 as compared to the prior year.
The decrease in corporate and other operating losses for Formula One Group for the year ended December 31, 2018 was
driven by costs related to the acquisition of Formula 1 recognized during the year ended December 31, 2017. Formula One
Group operating income decreased $483 million during 2017 as compared to the prior year, largely due to the favorable
one-time net $511 million Vivendi lawsuit settlement during the first quarter of 2016, as discussed in note 17 of the
accompanying consolidated financial statements. Liberty SiriusXM Group operating income increased $195 million and
Braves Group operating loss increased $52 million during 2017 as compared to the prior year. See “Results of Operations—
Businesses” below for a more complete discussion of the results of operations of SIRIUS XM, Formula 1 and Braves
Holdings.
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) phantom
stock appreciation rights granted to officers and employees of certain of our subsidiaries pursuant to private equity plans
and (3) amortization of restricted stock grants.
We recorded $192 million, $230 million and $150 million of stock compensation expense for the years ended
December 31, 2018, 2017 and 2016, respectively. The decrease in stock compensation expense in 2018 as compared to the
prior year is primarily due to decreases of $36 million and $8 million at Braves Holdings and Formula 1, respectively,
partially offset by increases of $9 million at SIRIUS XM. The increase in stock compensation expense in 2017 as compared
to the prior year is primarily due to increases of $37 million at Braves Holdings, $23 million at Formula 1 and $15 million
at SIRIUS XM.
As of December 31, 2018, the total unrecognized compensation cost related to unvested Liberty equity awards
was approximately $22 million. Such amount will be recognized in our consolidated statements of operations over a
weighted average period of approximately 1.3 years. As of December 31, 2018, the total unrecognized compensation cost
related to unvested SIRIUS XM stock options and restricted stock units was $254 million. The SIRIUS XM unrecognized
compensation cost will be recognized in the Company’s consolidated statements of operations over a weighted average
period of approximately 1.8 years.
See “Results of Operations—Businesses” below for a more complete discussion of the results of operations of
SIRIUS XM, Formula 1 and Braves Holdings.
Adjusted OIBDA. We define Adjusted OIBDA as revenue less operating expenses and selling, general and
administrative (“SG&A”) expenses (excluding stock compensation), separately reported litigation settlements and
restructuring 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, including each business’s ability to service debt and fund capital expenditures. In addition, this measure allows
us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies
to improve performance. This measure of performance excludes such costs as depreciation and amortization, stock-based
compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the
measurement of operating income pursuant to generally accepted accounting principles (“GAAP”). Accordingly, Adjusted
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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 GAAP. See note 18 to the
accompanying consolidated financial statements for a reconciliation of Adjusted OIBDA to Operating income (loss) and
Earnings (loss) from continuing operations before income taxes.
During the second quarter of 2018 and during the fourth quarters of 2017 and 2016, SIRIUS XM recorded $69
million, $45 million and $46 million, respectively, related to music royalty legal settlements and reserves. As separately
reported in note 17 of the accompanying consolidated financial statements, the $69 million, $45 million and $46 million
of expenses are included in the Revenue share and royalties expense line item in the accompanying consolidated financial
statements for the years ended December 31, 2018, 2017 and 2016, respectively, but have been excluded from Adjusted
OIBDA for the corresponding periods as these expenses were not incurred as a part of SIRIUS XM’s normal operations
for the periods, and these lump sum amounts do not relate to the on-going performance of the business.
SIRIUS XM recognized approximately $43 million and $40 million of Revenue share and royalties within the
consolidated statement of operations during the years ended December 31, 2017 and 2016, respectively, related to the
SIRIUS XM legal settlement associated with SIRIUS XM’s use of certain pre-1972 sound recordings. As separately
reported in note 17 of the accompanying consolidated financial statements, $108 million of the settlement amount
recognized during the year ended December 31, 2015 was excluded from Adjusted OIBDA for the corresponding period,
as this expense was not incurred as a part of SIRIUS XM’s normal operations for the period, and this lump sum amount
did not relate to the on-going performance of the business. Subsequent to the settlement during June 2015, SIRIUS XM
recognized $43 million and $40 million in 2017 and 2016, respectively, that is included as a component of Adjusted
OIBDA.
Consolidated Adjusted OIBDA increased $184 million and $720 million for the years ended December 31, 2018
and 2017, respectively, as compared to the corresponding prior year periods. The increase in Adjusted OIBDA in 2018 as
compared to the prior year was due to increases of $120 million and $86 million in Liberty SiriusXM Group and Braves
Group Adjusted OIBDA, respectively, partially offset by a $22 million decrease in Formula One Group Adjusted OIBDA.
The increase in Adjusted OIBDA in 2017 as compared to the prior year was due to increases of $442 million in Formula
One Group Adjusted OIBDA, Liberty SiriusXM Group Adjusted OIBDA of $256 million and Braves Group Adjusted
OIBDA of $22 million. See “Results of Operations—Businesses” below for a more complete discussion of the results of
operations of SIRIUS XM, Formula 1 and Braves Holdings.
F-11
Other Income and Expense
Other, net
Liberty SiriusXM Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25 (11) (25)
Braves Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 3 —
Formula One Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 16 21
Consolidated Liberty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 78 8 (4)
Interest expense. Consolidated interest expense increased $15 million and $229 million for the years ended
December 31, 2018 and 2017, respectively, as compared to the corresponding prior year periods. The increase for 2018 as
compared to the prior year was primarily due to an increase in the average amount of corporate and subsidiary debt
outstanding during the current period for Liberty SiriusXM Group and the capitalization of interest related to construction
of the stadium and mixed-use facilities during the prior period for Braves Group, partially offset by decreases in interest
expense for the Formula One Group due to decreases in the average amount of corporate and subsidiary debt outstanding.
The increase in 2017 as compared to the prior year was primarily due to approximately $167 million of interest expense
attributable to debt held at Formula 1, which we began consolidating on January 23, 2017 when we acquired Formula 1.
The remaining increase in 2017 was due to an increase in the average amount of corporate, SIRIUS XM and other
subsidiary debt outstanding.
F-12
Share of earnings (losses) of affiliates. The following table presents our share of earnings (losses) of affiliates:
Braves Group
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 78 9
Total Braves Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 78 9
During the year ended December 31, 2017, an equity method affiliate of Braves Holdings sold a controlling
interest in a subsidiary, resulting in Braves Holdings recording its portion of the gain of $69 million.
Realized and unrealized gains (losses) on financial instruments. Realized and unrealized gains (losses) on
financial instruments are comprised of changes in the fair value of the following:
The changes in unrealized gains (losses) on debt and equity securities (as defined in note 3 of our accompanying
consolidated financial statements) 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 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.
Liberty issued $1 billion of cash convertible notes in October 2013 which are accounted for at fair value, as
elected by Liberty at the time of issuance of the notes. At the same time, Liberty entered into a bond hedge transaction on
the same amount of underlying shares. These derivatives are marked to fair value on a recurring basis. The primary driver
of the change in the fair value of bond hedges is the change in the fair value of the underlying stock.
Other, net. The increase in 2018 was primarily due to a $48 million decrease in losses on early extinguishment
of debt and a $17 million increase in gains on transactions, primarily driven by the sale of the residential portion of Braves
Holdings’ mixed-use complex. The increase in 2017 was primarily due to a $19 million increase in interest and dividend
income and a $12 million increase in gains on transactions, partially offset by a $24 million increase in losses on early
extinguishment of debt, primarily related to the redemption of certain debt at SIRIUS XM. The loss in 2016 was primarily
due to a $24 million loss on extinguishment of SIRIUS XM’s redemption of its 5.875% Senior Notes due 2020 during the
F-13
year, partially offset by approximately $18 million in dividend and interest income, primarily due to dividends on Time
Warner, Inc. shares.
Income taxes. Our effective tax rate for the years ended December 31, 2018, 2017 and 2016 was an expense of
17%, benefit of 129% and expense of 35%, respectively. Our effective tax rate for all three years was impacted for the
following reasons:
• During 2018, our effective tax rate was lower than the federal tax rate of 21% U.S. due to deductible stock-
based compensation, benefits related to federal tax credits and the resolution of historical matters with various
tax authorities, partially offset by changes in the valuation allowance and taxable dividends not recognized
for book purposes.
• During 2017, in connection with the initial analysis of the impact of the Tax Cuts and Jobs Act (the “Tax
Act”), as discussed in note 11 of the accompanying consolidated financial statements, the Company recorded
a discrete net tax benefit, primarily driven by the corporate tax rate reduction.
• During 2016, our effective tax rate was equal to the federal tax rate of 35% due to the offsetting impact of
state income taxes and federal tax credits claimed by SIRIUS XM.
Net earnings. We had net earnings of $865 million, $1,890 million and $924 million for the years ended
December 31, 2018, 2017 and 2016, respectively. The change in net earnings was the result of the above-described
fluctuations in our revenue, expenses and other gains and losses.
As of December 31, 2018, substantially all of our cash and cash equivalents are invested in U.S. Treasury
securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly
rated financial and corporate debt instruments.
The following are potential sources of liquidity: available cash balances, cash generated by the operating activities
of our privately-owned subsidiaries (to the extent such cash exceeds the working capital needs of the subsidiaries and is
not otherwise restricted), proceeds from net asset sales, monetization of our public investment portfolio, debt and equity
issuances, available borrowing capacity under margin loans, and dividend and interest receipts.
As of December 31, 2018, Liberty’s cash and cash equivalents and unencumbered marketable equity securities
were as follows:
Unencumbered
Cash and Cash Marketable
Equivalents Equity Securities
amounts in millions
Liberty SiriusXM Group
SIRIUS XM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54 —
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 —
Total Liberty SiriusXM Group . . . . . . . . . . . . . . . . . . . . . . . . . . 91 —
Braves Group
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 —
Total Braves Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 —
Formula One Group
Formula 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 —
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 228
Total Formula One Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 228
F-14
To the extent the Company recognizes any taxable gains from the sale of assets we may incur tax expense and be
required to make tax payments, thereby reducing any cash proceeds. Additionally, the Company has a controlling interest
in SIRIUS XM which has significant cash flows provided by operating activities, although due to SIRIUS XM being a
separate public company and the significant noncontrolling interest, we do not have ready access to its cash. Cash held by
Formula 1 is accessible by Liberty, except when certain restricted payment tests imposed by the Senior Loan Facility at
Formula 1 are not met. As of December 31, 2018, Liberty had $750 million available under a $1.35 billion margin loan
due 2020 and $600 million available under the Live Nation Margin Loan. Certain tax consequences may reduce the net
amount of cash that Liberty is able to utilize for corporate purposes. 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.
The cash provided (used) by our continuing operations for the prior three years is as follows:
Liberty’s primary uses of cash during the year ended December 31, 2018 (excluding cash used by SIRIUS XM,
Formula 1 and Braves Holdings) were $466 million of Series C Liberty SiriusXM common stock repurchases and $414
million of investments in equity method affiliates and debt and equity securities. These uses were funded by borrowings
of debt and cash on hand.
SIRIUS XM’s primary uses of cash were the repurchase of outstanding SIRIUS XM common stock, dividends
paid to stockholders and additions to property and equipment resulting from new satellite construction. The SIRIUS XM
uses of cash were funded by cash provided by operating activities, cash on hand and borrowings of debt. During the year
ended December 31, 2018, SIRIUS XM declared a cash dividend each quarter, and paid in cash an aggregate amount of
$201 million, of which Liberty received $143 million. SIRIUS XM’s board of directors expects to declare regular quarterly
dividends, in an aggregate annual amount of $0.0484 per share of common stock. On January 29, 2019, SIRIUS XM’s
board of directors declared a quarterly dividend on its common stock in the amount of $0.0121 per share of common stock,
payable on February 28, 2019 to stockholders of record at the close of business on February 11, 2019.
Formula 1’s primary use of cash was the net repayment of debt.
The projected uses of Liberty cash (excluding SIRIUS XM’s, Formula 1’s and Braves Holdings’ uses of cash) are
primarily the investment in new or existing businesses, debt service, including potential repayment of the outstanding
margin loan 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 and borrowing capacity under margin loans and outstanding credit
facilities. We may be required to make net payments of income tax liabilities to settle items under discussion with tax
authorities.
SIRIUS XM’s uses of cash are expected to be operating expenses, capital expenditures, including the construction
of replacement satellites, working capital requirements, interest payments, taxes and scheduled maturities of outstanding
F-15
debt. Liberty expects SIRIUS XM to fund its projected uses of cash with cash on hand, cash provided by operations and
borrowings under the existing credit facility.
Formula 1’s uses of cash are expected to be debt service payments, as well as continued investment in its business.
Liberty expects Formula 1 to fund its projected uses of cash with cash on hand and cash provided by operations.
Braves Holdings’ uses of cash are expected to be expenditures related to the mixed-use development and new
spring training facility. Liberty expects Braves Holdings to fund its projected uses of cash with borrowings under its
existing debt instruments, cash provided by operations and through the issuance of new construction loans for Phase II.
We believe that the available sources of liquidity are sufficient to cover our projected future uses of cash.
SIRIUS XM has entered into various programming agreements. Under the terms of these agreements,
SIRIUS XM’s obligations include fixed payments, advertising commitments and revenue sharing arrangements.
SIRIUS XM’s future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they
are not included in the schedule of contractual obligations below.
The Atlanta Braves have entered into long-term employment contracts with certain of their players and coaches
whereby such individuals’ compensation is guaranteed. Amounts due under guaranteed contracts as of December 31, 2018
aggregated $165 million. See the table below for more detail. In addition to the foregoing amounts, certain players and
coaches may earn incentive compensation under the terms of their employment contracts.
Information concerning the amount and timing of required payments, both accrued and off-balance sheet, under
our contractual obligations, excluding uncertain tax positions as it is indeterminable when payments will be made, is
summarized below.
(1) Amounts are stated at the face amount at maturity of our debt instruments and may differ from the amounts stated in
our consolidated balance sheet to the extent debt instruments (i) were issued at a discount or premium or (ii) have
elements which are reported at fair value in our consolidated balance sheet. Amounts include capital lease obligations.
Amounts do not assume additional borrowings or refinancings of existing debt.
(2) Amounts (i) are based on our outstanding debt at December 31, 2018, (ii) assume the interest rates on our variable
rate debt remain constant at the December 31, 2018 rates and (iii) assume that our existing debt is repaid at maturity.
(3) SIRIUS XM has entered into various programming agreements under which SIRIUS XM’s obligations include fixed
payments, advertising commitments and revenue sharing arrangements. Future revenue sharing costs are dependent
upon many factors and are difficult to estimate; therefore, they are not included in the table above. In addition, SIRIUS
XM has entered into certain music royalty arrangements that include fixed payments.
(4) Includes amounts due related to the Braves Holdings baseball stadium and mixed-use development and SIRIUS XM
satellite and transmission, marketing and distribution, satellite incentive payments, and other contractual
commitments. SIRIUS XM satellite and transmission commitments are attributable to agreements with third parties
F-16
to operate and maintain the off-site satellite telemetry, tracking and control facilities and certain components of its
terrestrial repeater networks. During the year ended December 31, 2016, SIRIUS XM entered into an agreement with
Space Systems/Loral to design and build two satellites, SXM-7 and SXM-8, for SIRIUS XM’s service. SIRIUS XM
marketing and distribution commitments primarily relate to payments to sponsors, retailers, automakers and radio
manufacturers pursuant to marketing, sponsorship and distribution agreements to promote the SIRIUS XM brand.
Boeing Satellite Systems International, Inc. and Space Systems/Loral, the manufacturers of SIRIUS XM’s in-orbit
satellites, may be entitled to future in-orbit satellite incentive performance payments based on the expected operating
performance of the satellites meeting their fifteen-year design life. Boeing may also be entitled to an additional
$10 million if the XM-4 satellite continues to operate above baseline specifications during the five years beyond the
satellite’s fifteen-year design life. Additionally, SIRIUS XM has entered into various agreements with third parties for
general operating purposes.
The preparation of our financial statements in conformity with GAAP requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Listed below are the accounting estimates that we believe
are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved
and the magnitude of the asset, liability, revenue or expense being reported. All of these accounting estimates and
assumptions, as well as the resulting impact to our financial statements, have been discussed with our audit committee.
Non-Financial Instruments. Our non-financial instrument valuations are primarily comprised of our
determination of the estimated fair value allocation of net tangible and identifiable intangible assets acquired in business
combinations, our annual assessment of the recoverability of our goodwill and other nonamortizable intangibles, such as
trademarks, and our evaluation of the recoverability of our other long-lived assets upon certain triggering events. If the
carrying value of our long-lived assets exceeds their estimated fair value, we are required to write the carrying value down
to fair value. Any such writedown is included in impairment of long-lived assets in our consolidated statement of
operations. A high degree of judgment is required to estimate the fair value of our long-lived assets. We may use quoted
market prices, prices for similar assets, present value techniques and other valuation techniques to prepare these estimates.
We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to implement
these valuation techniques. Due to the high degree of judgment involved in our estimation techniques, any value ultimately
derived from our long-lived assets may differ from our estimate of fair value. As each of our operating segments has long-
lived assets, this critical accounting policy affects the financial position and results of operations of each segment.
As of December 31, 2018, the intangible assets not subject to amortization for each of our significant reporting
units were as follows (amounts in millions):
We perform our annual assessment of the recoverability of our goodwill and other nonamortizable intangible
assets in the fourth quarter each year. The accounting guidance permits entities to first assess qualitative factors to
determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis
for determining whether it is necessary to perform the quantitative goodwill impairment test. The accounting guidance also
allows entities the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to
the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period.
In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit and
evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely
than not that an indicated impairment exists for any of our reporting units. The Company considers whether there are any
negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs
F-17
in doing business, management challenges, the legal environments and how these factors might impact company specific
performance in future periods. As part of the analysis, the Company also considers fair value determinations for certain
reporting units that have been made at various points throughout the current and prior year for other purposes. If based on
the qualitative analysis it is more likely than not that an impairment exists, the Company performs the quantitative
impairment test.
Useful Life of Broadcast/Transmission System. SIRIUS XM’s satellite system includes the costs of satellite
construction, launch vehicles, launch insurance, capitalized interest, spare satellites, terrestrial repeater network and
satellite uplink facilities. SIRIUS XM monitors its satellites for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset is not recoverable.
SIRIUS XM operates two in-orbit Sirius satellites, FM-5 and FM-6. SIRIUS XM estimates that its FM-5 and
FM-6 satellites, launched in 2009 and 2013, respectively, will operate effectively through the end of their depreciable lives
in 2024 and 2028, respectively.
SIRIUS XM operates three in-orbit XM satellites, XM-3, XM-4 and XM-5. SIRIUS XM estimates that its XM-3
and XM-4 satellites launched in 2005 and 2006, respectively, will reach the end of their depreciable lives in 2020 and
2021, respectively. The XM-5 satellite that was launched in 2010, is used as an in-orbit spare for the Sirius and XM systems
and is expected to reach the end of its depreciable life in 2025.
SIRIUS XM’s satellites have been designed to last fifteen-years. SIRIUS XM’s in-orbit satellites may experience
component failures which could adversely affect their useful lives. SIRIUS XM monitors the operating condition of its in-
orbit satellites. If events or circumstances indicate that the depreciable lives of its in-orbit satellites have changed, the
depreciable life will be modified accordingly. If SIRIUS XM were to revise its estimates, depreciation expense would
change.
Income Taxes. We are required to estimate the amount of tax payable or refundable for the current year and the
deferred income tax liabilities and assets for the future tax consequences of events that have been reflected in our financial
statements or tax returns for each taxing jurisdiction in which we operate. This process requires our management to make
judgments regarding the timing and probability of the ultimate tax impact of the various agreements and transactions that
we enter into. Based on these judgments we may record tax reserves or adjustments to valuation allowances on deferred
tax assets to reflect the expected realizability of future tax benefits. Actual income taxes could vary from these estimates
due to future changes in income tax law, significant changes in the jurisdictions in which we operate, our inability to
generate sufficient future taxable income or unpredicted results from the final determination of each year’s liability by
taxing authorities. These changes could have a significant impact on our financial position.
Results of Operations—Businesses
SIRIUS XM SIRIUS XM transmits its music, sports, entertainment, comedy, talk, news, traffic and weather
channels, as well as infotainment services, in the United States on a subscription fee basis through its two proprietary
satellite radio systems. SIRIUS XM also transmits a larger set of music and other channels through SIRIUS XM’s
streaming service. SIRIUS XM’s streaming services is available online and through applications for mobile devices, home
devices and other consumer electronic equipment. SIRIUS XM also provides connected vehicle services which are
designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and
operational benefits to automakers and their dealers.
SIRIUS XM has agreements with every major automaker (“OEMs”) to offer satellite radio in their vehicles,
through which it acquires the majority of its subscribers. SIRIUS XM also acquires subscribers through marketing to
owners and lessees of previously owned vehicles that include factory-installed satellite radios that are not currently
subscribing to SIRIUS XM’s services. SIRIUS XM distributes its radios primarily through automakers, retailers and its
website. Satellite radio services are also offered to customers of certain rental car companies.
F-18
As of December 31, 2018, SIRIUS XM had approximately 34.0 million subscribers of which approximately
28.9 million were self-pay subscribers and approximately 5.1 million were paid promotional subscribers. These subscriber
totals include subscribers under regular pricing plans; discounted pricing plans; subscribers that have prepaid, including
payments either made or due from automakers for subscriptions included in the sale or lease price of a vehicle; subscribers
to SIRIUS XM’s streaming services who do not also have satellite radio subscriptions; and certain subscribers to
SIRIUS XM’s weather, traffic and data services who do not also have satellite radio subscriptions. Subscribers and
subscription related revenue and expenses associated with the SIRIUS XM Canada service, which had approximately
2.6 million subscribers as of December 31, 2018, and SIRIUS XM’s connected vehicle services are not included in
SIRIUS XM’s subscriber count or subscriber-based operating metrics.
SIRIUS XM’s primary source of revenue is subscription fees, with most of its customers subscribing to monthly,
quarterly, semi-annual or annual plans. SIRIUS XM offers discounts for prepaid subscription plans, as well as a multiple
subscription discount. SIRIUS XM also derives revenue from certain fees, the sale of advertising on select non-music
channels, the direct sale of satellite radios and accessories and other ancillary services, such as weather, data and traffic
services. SIRIUS XM provides traffic services to approximately 8.6 million vehicles.
We acquired a controlling interest in SIRIUS XM on January 18, 2013 and applied purchase accounting and
consolidated the results of SIRIUS XM from that date. The results presented for SIRIUS XM below include the impacts
of acquisition accounting adjustments in all periods presented. Additionally, as of December 31, 2018, there is an
approximate 27% noncontrolling interest in SIRIUS XM, and the net earnings of SIRIUS XM attributable to such
noncontrolling interest is eliminated through the noncontrolling interest line item in the consolidated statement of
operations. SIRIUS XM is a separate publicly traded company and additional information about SIRIUS XM can be
obtained through its website and its public filings, which are not incorporated by reference herein.
Subscriber revenue includes subscription, activation and other fees. Subscriber revenue increased 3% and 7% for
the years ended December 31, 2018 and 2017, respectively, as compared to the corresponding prior year periods. The
increase for the year ended December 31, 2018 was primarily attributable to a 5% increase in the daily weighted average
number of subscribers, partially offset by the impact of the adoption of Accounting Standards Update (“ASU”) 2014-09,
Revenue from Contracts with Customers, and all related amendments, which established Accounting Standards
Codification Topic 606 (“ASC 606”), effective as of January 1, 2018. The increase for the year ended December 31, 2017
F-19
was primarily attributable to a 4% increase in the daily weighted average number of subscribers as well as a 3% increase
in SIRIUS XM’s average monthly revenue per subscriber resulting from certain rate increases.
Other revenue includes advertising revenue, equipment revenue, royalty revenue and other ancillary revenue. For
the years ended December 31, 2018 and 2017, other revenue increased 24% and 16%, respectively, as compared to the
corresponding prior year periods. The increase for the year ended December 31, 2018 was primarily driven by higher U.S.
music royalty fee revenue due to a higher rate and an increase in the number of subscribers and higher revenue generated
from SIRIUS XM’s connected vehicle services and SIRIUS XM Canada. In addition, equipment revenue increased due to
additional royalty revenue due to SIRIUS XM’s transition to a new generation of chipsets. The prior year increase was
driven by higher revenue from Sirius XM Canada due to the new Services Agreement and Advisory Services Agreement
entered into in the second quarter of 2017, additional revenue from the U.S. Music Royalty Fee due to an increase in the
number of subscribers and subscribers paying at a higher rate and higher revenue generated from SIRIUS XM’s connected
vehicle services. Equipment revenue increased during the prior year driven by royalty revenue on certain satellite radio
components starting in the second quarter of 2016 due to SIRIUS XM’s transition to a new generation of chipsets and
revenue from the sales of connected vehicle devices since the acquisition of Automatic, partially offset by lower revenue
generated through satellite radio sales to distributors and consumers and lower OEM production. Advertising revenue
increased during both periods due to a greater number of advertising spots sold and transmitted along with increased rates
charged per spot.
Cost of subscriber 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.
• Revenue Share and Royalties (excluding legal settlements) includes distribution and content provider revenue
share, royalties for transmitting content and web streaming, and advertising revenue share. Revenue share
and royalties increased 14% and 10% during 2018 and 2017, respectively, as compared to the prior year
periods. The increases during both years were primarily due to greater revenue subject to royalty and revenue
sharing agreements and increases in the statutory royalty rate for the performance of sound recordings.
During the second quarter of 2018, SIRIUS XM recorded a $69 million charge related to the legal settlement
that resolved all outstanding claims, including ongoing audits, under SIRIUS XM’s statutory license for
sound recordings for the period January 1, 2007 through December 31, 2017. During the fourth quarters of
2017 and 2016, SIRIUS XM recorded $45 and $46 million, respectively, related to music royalty legal
settlements and reserves. These expenses are included in the Revenue share and royalties line item in the
accompanying consolidated financial statements for the years ended December 31, 2018, 2017 and 2016,
respectively, but have been excluded from Adjusted OIBDA for the corresponding periods as these expenses
were not incurred as a part of SIRIUS XM’s normal operations for the periods, and these lump sum amounts
do not relate to the on-going performance of the business.
• Programming and Content includes costs to acquire, create, promote and produce content. Programming and
content costs increased 5% and 8% during 2018 and 2017, respectively, as compared to the corresponding
prior years. The increase for the year ended December 31, 2018 was driven primarily by increased personnel-
related costs and higher music licensing costs. The prior year increase was due to the addition of video content
rights, the payment for which started during the third quarter of 2016, as well as increased talent and personnel
related costs.
• Customer Service and Billing includes costs associated with the operation and management of SIRIUS XM’s
internal and third party customer service centers and SIRIUS XM’s subscriber management systems as well
as billing and collection costs, transaction fees and bad debt expense. Customer service and billing expense
decreased 1% and 1% during 2018 and 2017, respectively, as compared to the corresponding prior years. The
current year decrease was primarily driven by lower call center costs due to lower agent rates, increased
customer self-service resulting in lower contact rates and improved non-pay process driving lower bad debt
expense, partially offset by increased transaction fees from a larger subscriber base and personnel-related
costs. The prior year decrease was primarily due to a decline in call center agent rates and contact rates,
partially offset by increased transaction fees based on a higher subscriber base.
F-20
• Other includes costs associated with the operation and maintenance of SIRIUS XM’s terrestrial repeater
networks; satellites; satellite telemetry, tracking and control systems; satellite uplink facilities; studios; and
delivery of SIRIUS XM’s streaming service and connected vehicle services as well as costs from the sale of
satellite radios, components and accessories and provisions for inventory allowance attributable to products
purchased for resale in SIRIUS XM’s direct to consumer distribution channels. Other costs of subscriber
services increased 8% and decreased 19% during the years ended December 31, 2018 and 2017, respectively,
as compared to the corresponding prior years. The current year increase was primarily driven by higher
wireless costs associated with SIRIUS XM’s connected vehicle services and higher streaming costs, partially
offset by lower direct satellite radio sales to consumers. The prior year decrease was driven by lower wireless
costs associated with SIRIUS XM’s connected vehicle services, a reduction in terrestrial repeater costs as a
result of the elimination of duplicative repeater sites, and lower sales to distributors and consumers, partially
offset by increased streaming costs and the incremental costs associated with the sale of connected vehicle
devices since the acquisition of Automatic.
Subscriber acquisition costs include hardware subsidies paid to radio manufacturers, distributors and automakers,
including 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, or concurrent with, acquiring a subscriber. For the years ended December 31, 2018
and 2017, subscriber acquisition costs decreased 6% and 3%, respectively, as compared to the corresponding periods in
the prior year. The decreases for both years were driven by reductions to OEM hardware subsidy rates, lower subsidized
costs related to the transition of chipsets and decreases in satellite radio installations.
Other operating expense includes engineering, design and development costs consisting primarily of
compensation and related costs to develop chipsets and new products and services. For the years ended December 31, 2018
and 2017, other operating expense increased 9% and 41%, respectively, as compared to the corresponding periods in the
prior year. The current year increase was driven by the continued development of SIRIUS XM’s streaming product and
connected vehicle services. The prior year increase was driven by the development of SIRIUS XM’s connected vehicle
services and additional costs associated with the development of SIRIUS XM’s audio and video streaming products.
Selling, general and administrative expense includes costs of marketing, advertising, media and production,
including promotional events and sponsorships; cooperative marketing; compensation and related personnel costs;
facilities costs, finance, legal, human resources and information technology costs. Selling, general and administrative
expense increased 9% and 6% for the years ended December 31, 2018 and 2017, respectively, as compared to the
corresponding prior year periods. The increases for both years were due to additional subscriber communications, retention
programs and acquisition campaigns as well as higher personnel-related costs. Additional increases during the year ended
December 31, 2018 were driven by higher information technology costs, a one-time charge for sales and use taxes and
expenses associated with the Pandora acquisition. The increases during the year ended December 31, 2017 were partially
offset by the timing of certain OEM marketing campaigns, lower legal costs, litigation reserves and consulting costs.
Stock-based compensation increased 7% and 14% during the years ended December 31, 2018 and 2017,
respectively, as compared to the corresponding periods in the prior year. During the year ended December 31, 2018,
SIRIUS XM recorded a one-time benefit to stock-based compensation expense as a result of the adoption of ASU 2018-07,
Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This
benefit was more than offset by an increase in stock-based compensation expense due to an increase in the number of
awards granted. The increase in the prior year is primarily due to an increase in the number of awards granted.
Depreciation and amortization increased 5% and 13% during the years ended December 31, 2018 and 2017,
respectively, as compared to the corresponding periods in the prior year. The increase in the current year is driven by an
increase in amortization expenses related to capitalized software additions and an increase in depreciation expense due to
additional assets placed in-service. The increase in the prior year was driven by the acceleration of amortization related to
a shorter useful life of certain software as well as additional assets placed in-service.
F-21
Formula One Group
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 with various Events. Formula 1 is responsible for the commercial
exploitation and development of the World Championship. Formula 1 derives its primary revenue from the commercial
exploitation and development of the World Championship through a combination of entering into race promotion,
broadcasting and advertising and sponsorship arrangements. A significant majority of the race promotion, broadcasting
and advertising and sponsorship contracts specify payments in advance and annual increases in the fees payable over the
course of the contracts.
Liberty acquired a controlling interest in Formula 1 on January 23, 2017 and applied acquisition accounting and
consolidated the results of Formula 1 from that date. Prior to the acquisition of our controlling interest, we maintained an
investment in Formula 1 since September 7, 2016, which was accounted for as a cost method investment. Although
Formula 1’s results are only included in Liberty’s results since January 23, 2017, we believe a discussion of Formula 1’s
results for all periods presented promotes a better understanding of the overall results of its business. For comparison and
discussion purposes, we are presenting the pro forma results of Formula 1 for the full years ended December 31, 2017 and
2016, inclusive of acquisition accounting adjustments. The pro forma financial information was prepared based on the
historical financial information of Formula 1 and assuming the acquisition of Formula 1 took place on January 1, 2016.
The pro forma adjustments have been made solely for the purpose of providing comparative pro forma financial
information. The financial information below is presented for illustrative purposes only and does not purport to represent
the actual results of operations of Formula 1 had the business combination occurred on January 1, 2016, or to project the
results of operations of Liberty for any future periods. The pro forma adjustments are based on available information and
certain assumptions that Liberty management believes are reasonable. The pro forma adjustments are directly attributable
to the business combination and are expected to have a continuing impact on the results of operations of Liberty.
Primary Formula 1 revenue is 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), broadcasting fees (earned from licensing the right to broadcast Events
on television and other platforms, including the internet) and advertising and sponsorship fees (earned from the sale of
World Championship and Event-related advertising and sponsorship rights).
The World Championship calendar consisted of 21 Events, 20 Events and 21 Events during the years ended
December 31, 2018, 2017 and 2016, respectively.
F-22
Primary Formula 1 revenue increased $4 million and decreased $19 million during the years ended December 31,
2018 and 2017, respectively, as compared to the corresponding periods in the prior year.
The increase for the year ended December 31, 2018 was driven by an increase in race promotion fees due to
contractual increases in fees for certain Events and increased economics from contractual arrangements at one Event
(which was fully offset by a decrease in advertising and sponsorship revenue, as discussed below). In addition, broadcasting
revenue increased during the current period as compared to the corresponding period in the prior year due to the favorable
impact of foreign currency exchange rates used to translate Great Britain Pound and Euro-denominated contracts into U.S.
Dollars and the impact of certain contractual rate increases, partially offset by the early termination of one contract with a
failing broadcast rights holder. Advertising and sponsorship revenue decreased during the current period as compared to
the corresponding period in the prior year due to revised contractual arrangements at one Event and non-renewal of another
small sponsorship arrangement, partially offset by revenue from new contracts and increases in existing contracts.
The prior year decrease was due to one less Event during 2017 compared to 2016 and legacy contractual terms of
one Event, which provided a one time significant decrease in race promotion fees after the 2016 season through the
remaining term of that contract. These decreases in race promotion revenue were partially offset by the impact of other
contractual increases. Broadcasting revenue increased during the year ended December 31, 2017 as compared to the same
period in the prior year due to the impact of certain contractual rate increases, partially offset by the net adverse impact of
weaker prevailing foreign currency exchange rates used to translate a small number of fees that were not denominated in
U.S. Dollars. Advertising and sponsorship revenue increased during the year ended December 31, 2017 as compared to
the corresponding period in the prior year due to increased fees and growth in certain arrangements, partially offset by the
non-renewal of two arrangements.
Other Formula 1 revenue is generated from miscellaneous and ancillary sources primarily related to administering
the shipment of cars and equipment to and from events outside of Europe, revenue from the sale of tickets to the Formula
One Paddock Club at most Events, support races at Events (either from the direct operation of the F2 and GP3 series (the
latter of which will be replaced in 2019 by the F3 series) or from the licensing of other third party series or individual race
events), various television production and post-production activities, digital and social media services and other ancillary
operations.
Other Formula 1 revenue increased $39 million and $7 million during the years ended December 31, 2018 and
2017, respectively, as compared to pro forma Other Formula 1 revenue in the corresponding periods in the prior year. The
increase in the current year was primarily attributable increases in revenue from the sale of the new F2 chassis, engine and
other components to the series’ competing teams due to 2018 being the first year of the F2 vehicle cycle, higher logistical
and travel services revenue, higher digital media and television production related revenue and increased revenue from
hospitality and various fan engagement and other event based activities.
The increase during the year ended December 31, 2017 as compared to the corresponding period in the prior year
was primarily attributable to higher logistics and digital media revenue, contributions from broadcasting in Ultra High
Definition and higher hospitality revenue, partially offset by lower spend by GP3 series’ competing teams during 2017 due
to it being the second year of the GP3 vehicle cycle.
Cost of Formula 1 revenue increased approximately $52 million and decreased $35 million during the years ended
December 31, 2018 and 2017, respectively, as compared to the corresponding periods in the prior year. Cost of Formula 1
revenue consists primarily of team payments.
F-23
Team payments decreased by $6 million and $47 million during the years ended December 31, 2018 and 2017,
respectively, as compared to the corresponding periods in the prior year. The decreases were attributable to reductions in
the variable elements of the Prize Fund which are calculated based on Formula 1’s revenue and costs.
Other costs of Formula 1 revenue include hospitality costs, which are principally related to catering and other
aspects of the production and delivery of the Paddock Club, and 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. Other costs include annual Federation Internationale de l’Automobile regulatory fees, advertising and
sponsorship commissions and those incurred in the provision and sale of freight, travel and logistical services, F2 and GP3
cars, parts and maintenance services, television production and post-production services, advertising production services
and digital and social media activities. These costs are largely variable in nature and relate directly to revenue opportunities.
Other costs of Formula 1 revenue increased $58 million and $12 million during the years ended December 31, 2018 and
2017, respectively, as compared to the corresponding periods in the prior year. The current year increase is primarily due
to increased technical, logistics and travel, hospitality and Formula 2 and GP3 costs associated with the changes in the
World Championship calendar, increased costs associated with sale of the new Formula 2 chassis and components to the
competing Formula 2 teams during the first season of the latest three year Formula 2 cycle, costs associated with increased
fan engagement activities, technical and digital media development and delivery and higher freight and hospitality costs.
The prior year increase is due to increasing fan engagement activities, filming in Ultra High definition and higher freight,
digital media and hospitality costs, partially offset by a lower circuit rights’ fee under the contractual arrangements of one
Event and the impact of one less Event in the year.
Selling, general and administrative expenses include personnel costs, legal, professional and other advisory fees,
bad debt expense, rental expense, information technology costs, non-Event-related travel costs, insurance premiums,
maintenance and utility costs and other general office administration costs. Selling, general and administrative expenses
increased $29 million and $35 million during the years ended December 31, 2018 and 2017, respectively, as compared to
the corresponding periods in the prior year. The current year increase was primarily driven by higher marketing and
research costs and an increase in bad debt expense. The increases in pro forma selling, general and administrative expense
during 2017 were primarily driven by higher personnel, property, marketing and research costs and advisory fees, all due
to the acquisition by Liberty of Formula 1, partially offset by an improvement in foreign exchange related gains and lower
bad debt expense during the year ended December 31, 2017 as compared to the corresponding prior year period.
Stock-based compensation expense relates to costs arising from grants of Series C Liberty Formula One common
stock options and restricted stock units to members of Formula 1 management, subsequent to the acquisition of Formula 1
by Liberty.
Depreciation and amortization includes depreciation of fixed assets and amortization of intangible assets.
Depreciation and amortization was relatively flat during the year ended December 31, 2018 as compared to pro forma
depreciation and amortization in the corresponding period in the prior year. Pro forma depreciation and amortization
increased $48 million during the year ended December 31, 2017, as compared to the corresponding period in the prior
year. The increase was driven by an increase in amortization expense related to intangible assets acquired in the acquisition
of Formula 1 by Liberty.
Braves Group
Braves Holdings. Braves Holdings is our wholly owned subsidiary that indirectly owns and operates the Atlanta
Braves Major League Baseball club and six minor league baseball clubs (the Gwinnett Stripers, the Mississippi Braves,
the Rome Braves, the Danville Braves, the GCL Braves and the Dominican Summer League). Braves Holdings had
exclusive operating rights to Turner Field, the home stadium of the Atlanta Braves, until December 31, 2016 pursuant to
an Operating Agreement with the Atlanta Fulton County Recreation Authority. Effective for the 2017 season, the Braves
relocated to a new ballpark in Cobb County, a suburb of Atlanta. The facility is leased from Cobb County and Cobb-
Marietta Coliseum and Exhibit Hall Authority and offers a range of activities and eateries for fans. Braves Holdings and
its affiliates participated in the construction of the new stadium and are participating in the construction of an adjacent
mixed-use development project, which we refer to as the Development Project.
F-24
Operating results attributable to the Braves Holdings were as follows.
F-25
Quantitative and Qualitative Disclosures about Market Risk.
We are exposed to market risk in the normal course of business due to our ongoing investing and financial
activities and the conduct of operations. Market risk refers to the risk of loss arising from adverse changes in stock prices
and interest rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and
future earnings. We have established policies, procedures and internal processes governing our management of market
risks and the use of financial instruments to manage our exposure to such risks.
We are exposed to changes in interest rates primarily as a result of our borrowing and investment activities, which
include investments in fixed and floating rate debt instruments and borrowings used to maintain liquidity and to fund
business operations. The nature and amount of our long-term and short-term debt are expected to vary as a result of future
requirements, market conditions and other factors. We manage our exposure to interest rates by maintaining what we
believe is an appropriate mix of fixed and variable rate debt. We believe this best protects us from interest rate risk. We
have achieved this mix by (i) issuing fixed rate debt that we believe has a low stated interest rate and significant term to
maturity, (ii) issuing variable rate debt with appropriate maturities and interest rates and (iii) entering into interest rate
swap arrangements when we deem appropriate.
The Company is exposed to changes in stock prices primarily as a result of our significant holdings in publicly
traded securities. We continually monitor changes in stock markets, in general, and changes in the stock prices of our
holdings, specifically. We believe that changes in stock prices can be expected to vary as a result of general market
conditions, technological changes, specific industry changes and other factors. We periodically use equity collars and other
financial instruments to manage market risk associated with certain investment positions. These instruments are recorded
at fair value based on option pricing models.
At December 31, 2018, the fair value of our marketable debt and equity securities was $1,195 million. Had the
market price of such securities been 10% lower at December 31, 2018, the aggregate value of such securities would have
been $120 million lower. Additionally, our stock in Live Nation (an equity method affiliate) is a publicly traded security
which is not reflected at fair value in our balance sheet. This security is also subject to market risk that is not directly
reflected in our financial statements.
The consolidated financial statements of Liberty Media Corporation are included herein, beginning on Page F-31.
None.
In accordance with Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Company carried out an evaluation, under the supervision and with the participation of management, including
its chief executive officer and principal accounting and financial officer (the “Executives”), of the effectiveness of its
disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the
F-26
Executives concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2018 to
provide reasonable assurance that information required to be disclosed in its reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange
Commission’s rules and forms.
See page F-28 for Management’s Report on Internal Control Over Financial Reporting.
See page F-29 for Report of Independent Registered Public Accounting Firm for their attestation regarding our
internal control over financial reporting.
There has been no change in the Company’s internal control over financial reporting that occurred during the
three months ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, its internal
control over financial reporting.
Other Information.
None.
F-27
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Liberty Media Corporation’s (the “Company”) management is responsible for establishing and maintaining
adequate internal control over the Company’s financial reporting, as such term is defined in Rule 13a-15(f) of the Securities
Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the United States of America. Because of inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
The Company’s management assessed the effectiveness of internal control over financial reporting as of
December 31, 2018, using the criteria in Internal Control-Integrated Framework (2013), issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this evaluation the Company’s management believes
that, as of December 31, 2018, its internal control over financial reporting is effective.
The Company’s independent registered public accounting firm audited the consolidated financial statements and
related disclosures in the Annual Report and have issued an audit report on the effectiveness of the Company’s internal
control over financial reporting. This report appears on page F -29 of this Annual Report.
F-28
Report of Independent Registered Public Accounting Firm
We have audited Liberty Media Corporation and subsidiaries’ (the Company) internal control over financial reporting
as of December 31, 2018, based on criteria established in Internal Control—Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal
Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2018 and 2017, and the related
consolidated statements of operations, comprehensive earnings (loss), cash flows and equity for each of the years in the three-
year period ended December 31, 2018, and related notes (collectively, the consolidated financial statements), and our report dated
February 28, 2019 expressed an unqualified opinion on those consolidated financial statements.
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures
as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
F-29
Report of Independent Registered Public Accounting Firm
We have audited the accompanying consolidated balance sheets of Liberty Media Corporation and subsidiaries (the
Company) as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive earnings (loss),
cash flows and equity for each of the years in the three year period ended December 31, 2018, and the related notes (collectively,
the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for
each of the years in the three year period ended December 31, 2018, in conformity with U.S. generally accepted accounting
principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established
in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated February 28, 2019, expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.
As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for
revenue recognition in 2018 due to the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with
Customers.
Also as discussed in Note 3 to the consolidated financial statements, the Company changed its method of accounting
for share-based payments in 2016 due to the adoption of ASU 2016-09, Compensation – Stock Compensation (Topic 718):
Improvements to Employee Share-Based Payment Accounting.
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our
audits provide a reasonable basis for our opinion.
Denver, Colorado
February 28, 2019
F-30
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2018 and 2017
2018 2017
amounts in millions
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 358 1,029
Trade and other receivables, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 358
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360 356
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,082 1,743
Investments in debt and equity securities (note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,278 1,114
Investments in affiliates, accounted for using the equity method (note 8) . . . . . . . . . . . . . . . . . . . 1,641 1,750
(continued)
F-31
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
December 31, 2018 and 2017
2018 2017
amounts in millions
Stockholders' equity (notes 12,14 and 16):
Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued . . . . . . . . . . . . . . $ — —
Series A Liberty SiriusXM common stock, $.01 par value. Authorized 2,000,000,000 shares
at December 31, 2018; issued and outstanding 102,809,736 shares at December 31, 2018 and
102,701,972 shares at December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1
Series A Liberty Braves common stock, $.01 par value. Authorized 200,000,000 shares at
December 31, 2018; issued and outstanding 10,244,591 shares at December 31, 2018 and
10,243,259 shares at December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Series A Liberty Formula One common stock, $.01 par value. Authorized 500,000,000 shares
at December 31, 2018; issued and outstanding 25,675,346 shares at December 31, 2018 and
25,649,611 shares at December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Series B Liberty SiriusXM common stock, $.01 par value. Authorized 75,000,000 shares at
December 31, 2018; issued and outstanding 9,821,531 shares at December 31, 2018 and
December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Series B Liberty Braves common stock, $.01 par value. Authorized 7,500,000 shares at
December 31, 2018; issued and outstanding 981,860 shares at December 31, 2018 and
December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Series B Liberty Formula One common stock, $.01 par value. Authorized 18,750,000 shares
at December 31, 2018; issued and outstanding 2,453,485 shares at December 31, 2018 and
2,454,448 shares at December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Series C Liberty SiriusXM common stock, $.01 par value. Authorized 2,000,000,000 shares
at December 31, 2018; issued and outstanding 213,130,922 shares at December 31, 2018 and
223,588,953 shares at December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2
Series C Liberty Braves common stock, $.01 par value. Authorized 200,000,000 shares at
December 31, 2018; issued and outstanding 39,740,215 shares at December 31, 2018 and
39,723,440 shares at December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Series C Liberty Formula One common stock, $.01 par value. Authorized 500,000,000 shares
at December 31, 2018; issued and outstanding 202,887,872 shares at December 31, 2018 and
202,720,588 shares at December 31, 2017 (note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,984 3,892
Accumulated other comprehensive earnings (loss), net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38) (35)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,644 13,081
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,595 16,943
Noncontrolling interests in equity of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,103 5,631
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,698 22,574
Commitments and contingencies (note 17)
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,828 41,996
F-32
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Operations
Years ended December 31, 2018, 2017 and 2016
(continued)
F-33
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Operations (Continued)
Years ended December 31, 2018, 2017 and 2016
F-34
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Comprehensive Earnings (Loss)
Years ended December 31, 2018, 2017 and 2016
F-35
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Consolidated Statements Of Cash Flows
Years ended December 31, 2018, 2017 and 2016
F-36
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Consolidated Statement Of Equity
Years ended December 31, 2018, 2017 and 2016
Stockholders' equity
Accumulated Noncontrolling
Common Stock Additional other interest in
Preferred Liberty Media Corporation Liberty Sirius XM Liberty Braves Liberty Formula One paid-in comprehensive Retained equity of Total
Stock Series A Series B Series C Series A Series B Series C Series A Series B Series C Series A Series B Series C capital earnings earnings subsidiaries equity
amounts in millions
Balance at January 1, 2016 . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 1 $ — $ 2 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ (51) $ 10,981 $ 7,198 $ 18,131
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — 680 244 924
Other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — (11) — 1 (10)
Recapitalization of tracking stock groups . . . . . . . . . . . . . — (1) — (2) 1 — 2 — — — — — 1 — — — — 1
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — 96 — — 35 131
Withholding taxes on net share settlements of stock-based
compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — (58) — — — (58)
Issuance of common stock upon exercise of
stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — 7 — — — 7
Common stock issued pursuant to the Series C
Liberty Braves common stock rights offering . . . . . . . . . . . — — — — — — — — — — — — — 203 — — — 203
Shares repurchased by subsidiary . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (130) — — (1,544) (1,674)
Shares issued by subsidiary . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (28) — — 28 —
Dividends paid by subsidiary . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — — (16) (16)
Contribution by noncontrolling interest . . . . . . . . . . . . . . — — — — — — — — — — — — — — — — 15 15
Cumulative adjustment for change in accounting principle
(note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — 66 (1) 65
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (3) — — — (3)
Balance at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . — — — — 1 — 2 — — — — — 1 87 (62) 11,727 5,960 17,716
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — 1,354 536 1,890
Other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — 27 — 8 35
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — 129 — — 35 164
Withholding taxes on net share settlements of stock-based
compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — (135) — — — (135)
F-37
Issuance of common stock upon exercise of
stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — 13 — — — 13
Shares issued in private placement transaction . . . . . . . . .. — — — — — — — — — — — — — 1,938 — — — 1,938
Shares issued as consideration in acquisition of
Formula 1 (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — 1 1,616 — — — 1,617
Initial recognition of conversion option on
Delta Topco Exchangeable Notes (note 5) . . . . . . . . . . . .. — — — — — — — — — — — — — 173 — — — 173
Shares issued in exchange for Delta Topco Exchangeable
Notes (note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — 352 — — — 352
Shares repurchased by subsidiary . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (369) — — (1,034) (1,403)
Shares issued by subsidiary . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (7) — — 186 179
Dividends paid by subsidiary . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — — (60) (60)
Noncontrolling interest activity of equity
affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — 31 — — — 31
Shares issued for subsidiary incentive plan . . . . . . . . . . . . — — — — — — — — — — — — — 64 — — — 64
Balance at December 31, 2017 . . . . . . . . . . . . . . . . . . . . . — — — — 1 — 2 — — — — — 2 3,892 (35) 13,081 5,631 22,574
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — 531 334 865
Other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — (5) — (10) (15)
Cumulative adjustment for change in accounting principle
(note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — 22 2 36 12 72
Stock-based compensation . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — 153 — — 39 192
Withholding taxes on net share settlements of stock-based
compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (130) — — — (130)
Issuance of common stock upon exercise of stock options . . . — — — — — — — — — — — — — 5 — — — 5
Series C Liberty SiriusXM stock repurchases . . . . . . . . . . . — — — — — — — — — — — — — (466) — — — (466)
Shares repurchased by subsidiary . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (416) — — (881) (1,297)
Shares issued by subsidiary . . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (65) — — 65 —
Dividends paid by subsidiary . . . . . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — — (59) (59)
Purchase of noncontrolling interest . . . . . . . . . . . . . . . . . — — — — — — — — — — — — — (9) — — (9) (18)
Distribution to noncontrolling interest . . . . . . . . . . . . . . . — — — — — — — — — — — — — — — — (19) (19)
Noncontrolling interest activity of equity
affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — (2) — — — (2)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. — — — — — — — — — — — — — — — (4) — (4)
Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . .. $ — $ — $ — $ — $ 1 $ — $ 2 $ — $ — $ — $ — $ — $ 2 $ 2,984 $ (38) $ 13,644 $ 5,103 $ 21,698
The accompanying consolidated financial statements of Liberty Media Corporation (formerly named Liberty
Spinco, Inc.; see discussion below pertaining to the Starz Spin-Off (defined below)) (“Liberty,” “we,” “our,” “us” or the
“Company” unless the context otherwise requires) represent a consolidation of certain media and entertainment related
assets and businesses. All significant intercompany accounts and transactions have been eliminated in the consolidated
financial statements.
Liberty, through its ownership of interests in subsidiaries and other companies, is primarily engaged in the media
and entertainment industries primarily in North America and the United Kingdom. Our significant subsidiaries include
Sirius XM Holdings Inc. (“SIRIUS XM”), Formula 1 and Braves Holdings, LLC (“Braves Holdings”). Our significant
investment accounted for under the equity method of accounting is Live Nation Entertainment, Inc. (“Live Nation”). As
discussed in notes 2 and 7, Liberty obtained a nearly 20% interest in Delta Topco Limited (“Delta Topco”), the parent
company of Formula 1, a global motorsports business, during 2016 and acquired the remaining interests, other than a
nominal number of shares held by certain Formula 1 teams, during January 2017.
In September 2011, Liberty Interactive Corporation (“Liberty Interactive” and formerly named Liberty Media
Corporation) completed the split-off of its former wholly-owned subsidiary (then known as Liberty Media Corporation)
from its Liberty Interactive tracking stock group (the “Split-Off”).
In January 2013, Starz (which was renamed Starz Acquisition, LLC in connection with its acquisition by Lions
Gate Entertainment Corp. and was formerly known as Liberty Media Corporation) spun-off (the “Starz Spin-Off”) its then-
former wholly-owned subsidiary, which, at the time of the Starz Spin-Off, held all of the businesses, assets and liabilities
of Starz not associated with Starz, LLC (with the exception of the Starz, LLC office building). The transaction was effected
as a pro-rata dividend of shares of Liberty to the stockholders of Starz.
Also in January 2013, Liberty obtained a controlling interest and began consolidating SIRIUS XM. SIRIUS XM,
since the date of our investment, has repurchased approximately 2.5 billion SIRIUS XM shares for approximately $9.4
billion. Liberty continues to maintain a controlling interest in SIRIUS XM following the completion of the share
repurchases. As of December 31, 2018, we owned approximately 73% of the outstanding equity interest in SIRIUS XM.
On February 1, 2019, SIRIUS XM issued shares of SIRIUS XM Common Stock in conjunction with its acquisition of
Pandora Media, Inc. (“Pandora”), which reduced our economic ownership in SIRIUS XM to approximately 67% as of
such date. See note 7 for more information regarding the acquisition of Pandora.
During 2014, Liberty’s board of directors approved the issuance of shares of its Series C Liberty Media
Corporation common stock to holders of its Series A and Series B Liberty Media Corporation common stock, effected by
means of a dividend. On July 23, 2014, holders of Series A and Series B Liberty Media Corporation common stock
received a dividend of two shares of Series C Liberty Media Corporation common stock for each share of Series A or
Series B Liberty Media Corporation common stock held by them as of July 7, 2014. Additionally, in connection with the
Series C Liberty Media Corporation common stock issuance and the Broadband Spin-Off (defined below), outstanding
Series A Liberty Media Corporation common stock warrants have been adjusted, as well as the number of shares covered
by outstanding cash convertible note hedges and purchased call options (the “Bond Hedge Transaction”). See note 10 for
further discussion regarding the warrants and Bond Hedge Transaction.
On November 4, 2014, Liberty completed the spin-off to its stockholders common stock of a newly formed
company called Liberty Broadband Corporation (“Liberty Broadband”) (the “Broadband Spin-Off”). In the Broadband
Spin-Off, record holders of Series A, Series B and Series C Liberty Media Corporation common stock received one share
of the corresponding series of Liberty Broadband common stock for every four shares of common stock held by them as
of the record date for the Broadband Spin-Off, with cash paid in lieu of fractional shares.
F-38
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
During August 2014, Liberty Interactive completed the distribution of Liberty TripAdvisor Holdings, Inc.
(“Liberty TripAdvisor”) (the “TripAdvisor Spin-Off”). During July 2016, Liberty Interactive completed the spin-off of
CommerceHub, Inc. (“CommerceHub”) (the “CommerceHub Spin-Off”). During November 2016, Liberty Interactive
completed the split-off of Liberty Expedia Holdings, Inc. (“Expedia Holdings”) (the “Expedia Holdings Split-Off”).
During March 2018, Liberty Interactive completed the split-off of GCI Liberty, Inc. (“GCI Liberty”) (the “GCI Liberty
Split-Off”) and Liberty Interactive was subsequently renamed Qurate Retail, Inc. (“Qurate Retail”). Following these
transactions, each of these companies operates (or in the case of Starz and CommerceHub, prior to their respective
acquisitions, operated) as separate publicly traded companies, none of which has (or, in the case of Starz and
CommerceHub, had) any stock ownership, beneficial or otherwise, in the other (except that GCI Liberty owns shares of
Liberty Broadband’s Series C non-voting common stock). In connection with the Split-Off, Starz Spin-Off, TripAdvisor
Spin-Off, Broadband Spin-Off, CommerceHub Spin-Off, Expedia Holdings Split-Off and GCI Liberty Split-Off, Liberty
entered into certain agreements with Qurate Retail, Starz, Liberty TripAdvisor, Liberty Broadband, CommerceHub,
Expedia Holdings and GCI Liberty, respectively, in order to govern ongoing relationships between the companies and to
provide for an orderly transition. As a result, these entities are considered related parties of the Company for accounting
purposes through the dates of the respective transactions. These agreements include Reorganization Agreements (in the
case of Qurate Retail, Starz and Liberty Broadband only), Services Agreements (which, in Starz’s case terminated in
April 2017, and in CommerceHub’s case, terminated in August 2018), Facilities Sharing Agreements (excluding Starz and
CommerceHub), a Lease Agreement (in the case of the Starz Spin-Off only) and with respect to Starz and Liberty
Broadband, Tax Sharing Agreements. The Reorganization, Services and Facilities Sharing Agreements entered into with
Liberty Interactive were assigned from Starz to Liberty in connection with the Starz Spin-Off.
The Reorganization Agreements provide for, among other things, provisions governing the relationships between
Liberty and each of Qurate Retail, Starz and Liberty Broadband, respectively, including certain cross-indemnities. Pursuant
to the Services Agreements, Liberty provides Qurate Retail, Liberty TripAdvisor, Liberty Broadband, CommerceHub
(prior to termination), Expedia Holdings and GCI Liberty with general and administrative services including legal, tax,
accounting, treasury and investor relations support. Qurate Retail, Liberty TripAdvisor, Liberty Broadband, CommerceHub
(prior to termination), Expedia Holdings and GCI Liberty reimburse Liberty for direct, out-of-pocket expenses incurred
by Liberty in providing these services and in the case of Qurate Retail, Qurate Retail’s allocable portion of costs associated
with any shared services or personnel based on an estimated percentage of time spent providing services to Qurate Retail.
Liberty TripAdvisor, Liberty Broadband, CommerceHub (prior to termination), Expedia Holdings and GCI Liberty
reimburse Liberty for shared services and personnel based on a flat fee. Under the Facilities Sharing Agreements, Liberty
shares office space and related amenities with Qurate Retail, Liberty TripAdvisor, Liberty Broadband, Expedia Holdings
and GCI Liberty at Liberty’s corporate headquarters. Under these various agreements, approximately $30 million,
$24 million and $21 million of these allocated expenses were reimbursed to Liberty during the years ended December 31,
2018, 2017 and 2016, respectively. Under the Lease Agreement, Starz leases its corporate headquarters from Liberty. The
Lease Agreement with Starz for their corporate headquarters requires a payment of approximately $4 million annually,
subject to certain increases based on the Consumer Price Index. The Lease Agreement expires on December 31, 2023 and
contains an extension option.
The Tax Sharing Agreements provide for the allocation and indemnification of tax liabilities and benefits between
Liberty and each of Starz and Liberty Broadband as well as other agreements related to tax matters. Among other things,
pursuant to the Tax Sharing Agreements, Liberty has generally agreed to indemnify Starz and Liberty Broadband for taxes
and losses resulting from the failure of the Starz Spin-Off and the Broadband Spin-Off, respectively, to qualify for tax-free
treatment. However, Starz will be responsible for any such taxes and losses related to the Starz Spin-Off which (i) result
primarily from the breach of certain restrictive covenants made by Starz, or (ii) result from Section 355(e) of the Internal
Revenue Code of 1986 (the “Code”) applying to the Starz Spin-Off as a result of the Starz Spin-Off being part of a plan
(or series of related transactions) pursuant to which one or more persons acquire a 50-percent or greater interest (measured
by vote or value) in the stock of Starz, and Liberty Broadband will be responsible for any such taxes and losses related to
the Broadband Spin-Off which (i) result primarily from the breach of certain restrictive covenants made by Liberty
F-39
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Broadband, or (ii) result from Section 355(e) of the Code applying to the Broadband Spin-Off as a result of the Broadband
Spin-Off being part of a plan (or series of related transactions) pursuant to which one or more persons acquire a 50-percent
or greater interest (measured by vote or value) in the stock of Liberty Broadband. In February 2014, the IRS and Starz
entered into a closing agreement which provided that the Starz Spin-Off qualified for tax-free treatment to Starz and
Liberty. In September 2015, Liberty entered into a closing agreement with the IRS which provided that the Broadband
Spin-Off qualified for tax-free treatment.
During November 2015, Liberty’s board of directors authorized management to pursue a recapitalization of the
Company’s common stock into three new tracking stock groups, one to be designated as the Liberty Braves common stock,
one to be designated as the Liberty Media common stock and one to be designated as the Liberty SiriusXM common stock
(the “Recapitalization”), and to cause to be distributed subscription rights related to the Liberty Braves common stock
following the creation of the new tracking stocks.
The Recapitalization was completed on April 15, 2016 and the newly issued shares commenced trading or
quotation in the regular way on the Nasdaq Global Select Market or the OTC Markets, as applicable, on Monday, April 18,
2016. In the Recapitalization, each issued and outstanding share of Liberty Media Corporation common stock was
reclassified and exchanged for (a) 1 share of the corresponding series of Liberty SiriusXM common stock, (b) 0.1 of a
share of the corresponding series of Liberty Braves common stock and (c) 0.25 of a share of the corresponding series of
Liberty Formula One common stock on April 15, 2016. Cash was paid in lieu of the issuance of any fractional shares. In
May 2016, the IRS completed its review of the Recapitalization and notified Liberty that it agreed with the nontaxable
characterization of the transaction. The operating results prior to the Recapitalization are attributed to Liberty stockholders
in the aggregate. However, the information in the following footnotes has been presented by tracking stock groups for all
periods presented in order to enhance the information provided to users of these financial statements.
Following the creation of the tracking stocks, Series A, Series B and Series C Liberty SiriusXM common stock
trade under the symbols LSXMA/B/K, respectively; Series A, Series B and Series C Liberty Braves common stock trade
or are quoted under the symbols BATRA/B/K respectively; and Series A, Series B and Series C Liberty Media common
stock traded or were quoted under the symbols LMCA/B/K, respectively. Shortly following the Second Closing (as defined
below) of the acquisition of Formula 1, the Liberty Media Group and Liberty Media common stock were renamed the
Liberty Formula One Group (the “Formula One Group”) and the Liberty Formula One common stock, respectively, and
the corresponding ticker symbols for the Series A, Series B and Series C Liberty Media common stock were changed to
FWONA/B/K, respectively. Each series (Series A, Series B and Series C) of the Liberty SiriusXM common stock trades
on the Nasdaq Global Select Market. Series A and Series C Liberty Braves common stock trade on the Nasdaq Global
Select Stock Market and Series B Liberty Braves common stock is quoted on the OTC Markets. Series A and Series C
Liberty Formula One common stock continue to trade on the Nasdaq Global Select Market and the Series B Liberty
Formula One common stock continues to be quoted on the OTC Markets. Although the Second Closing, and the
corresponding tracking stock name and the ticker symbol change, were not completed until January 23 and 24, 2017,
respectively, historical information of the Liberty Media Group and Liberty Media common stock is referred to herein as
the Formula One Group and Liberty Formula One common stock, respectively.
In addition, following the creation of the new tracking stocks, Liberty distributed to holders of its Liberty Braves
common stock subscription rights to acquire shares of Series C Liberty Braves common stock in order to raise capital to
repay an intergroup note and for working capital purposes. In the rights distribution, Liberty distributed 0.47 of a Series C
Liberty Braves subscription right for each share of Series A, Series B or Series C Liberty Braves common stock held as of
5:00 p.m., New York City time, on May 16, 2016. Fractional Series C Liberty Braves subscription rights were rounded up
to the nearest whole right. Each whole Series C Liberty Braves subscription right entitled the holder to purchase, pursuant
to the basic subscription privilege, one share of Liberty’s Series C Liberty Braves common stock at a subscription price of
F-40
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
$12.80, which was equal to an approximate 20% discount to the trading day volume weighted average trading price of
Series C Liberty Braves common stock for the 18-day trading period ending on May 11, 2016. Each Series C Liberty
Braves subscription right also entitled the holder to subscribe for additional shares of Series C Liberty Braves common
stock that were unsubscribed for in the rights offering pursuant to an oversubscription privilege. The rights offering
commenced on May 18, 2016, which was also the ex-dividend date for the distribution of the Series C Liberty Braves
subscription rights. The rights offering expired at 5:00 p.m. New York City time, on June 16, 2016 and was fully subscribed
with 15,833,634 shares of Series C Liberty Braves common stock issued to those rightsholders exercising basic and, if
applicable, oversubscription privileges. Approximately $150 million of the proceeds from the rights offering were used to
repay the outstanding balance on an intergroup note and accrued interest to Liberty. The remaining proceeds were used for
development costs attributed to the Braves Group. In September 2016, the IRS completed its review of the distribution of
the Series C Liberty Braves subscription rights and notified Liberty that it agreed with the nontaxable characterization of
the distribution.
Additionally, as a result of the Recapitalization, Liberty’s 1.375% Cash Convertible Senior Notes due 2023 are
now convertible into cash based on the product of the conversion rate specified in the indenture and the basket of tracking
stocks into which each outstanding share of Series A Liberty Media Corporation common stock was reclassified (the
“Securities Basket”). The Series A Liberty Braves common stock component of the Securities Basket was subsequently
adjusted pursuant to anti-dilution adjustments arising out of the distribution of subscription rights to purchase shares of
Series C Liberty Braves common stock made to all holders of Liberty Braves common stock. Furthermore, the Company
entered into amended agreements with the counterparties with regard the Recapitalization-related adjustments to the
outstanding Series A Liberty Media Corporation common stock warrants as well as the outstanding cash convertible note
hedges and purchased call options. See note 10 for a more detailed discussion of the amendments made to these financial
instruments as a result of the Recapitalization.
As discussed in more detail in note 5, on September 7, 2016 Liberty, through its indirect wholly owned subsidiary
Liberty GR Cayman Acquisition Company, entered into two definitive stock purchase agreements relating to the
acquisition of Delta Topco. The transactions contemplated by the first purchase agreement were completed on September 7,
2016, resulting in the acquisition of slightly less than a 20% minority stake in Formula 1 on an undiluted basis. On
October 27, 2016 under the terms of the first purchase agreement, Liberty acquired an additional incremental equity interest
of Delta Topco, maintaining Liberty’s investment in Delta Topco on an undiluted basis and increasing slightly to 19.1%
on a fully diluted basis. Liberty’s interest in Delta Topco and by extension Formula 1 is attributed to the Liberty Formula
One Group (the “Formula One Group”). Liberty acquired 100% of the fully diluted equity interests of Delta Topco, other
than a nominal number of shares held by certain Formula 1 teams, in a closing under the second purchase agreement
(following the unwind of the first purchase agreement) on January 23, 2017 (the “Second Closing”). Liberty’s acquired
interest in Formula 1, along with existing Formula 1 cash and debt (which is non-recourse to Liberty), is attributed to the
Formula One Group.
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 public company, such as SIRIUS XM or 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.
F-41
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The Liberty SiriusXM common stock is intended to track and reflect the separate economic performance of the
businesses, assets and liabilities attributed to the Liberty SiriusXM Group. Liberty attributed to the Liberty SiriusXM
Group its subsidiary SIRIUS XM, corporate cash, investments in debt securities, Liberty’s 2.125% Exchangeable Senior
Debentures due 2048 and a margin loan obligation incurred by a wholly-owned special purpose subsidiary of Liberty. On
February 1, 2019, SIRIUS XM acquired Pandora. See note 7 for more information regarding the acquisition of Pandora.
As of December 31, 2018, the Liberty SiriusXM Group has cash and cash equivalents of approximately $91 million, which
includes $54 million of subsidiary cash.
The Liberty Braves common stock is intended to track and reflect the separate economic performance of the
businesses, assets and liabilities attributed to the Braves Group. Liberty attributed to the Braves Group its subsidiary,
Braves Holdings, which indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC” or the “Atlanta
Braves”) and certain assets and liabilities associated with ANLBC’s stadium and mixed use development project (the
“Development Project”) and corporate cash. The Formula One Group holds an intergroup interest in the Braves Group. As
of December 31, 2018, the Braves Group has cash and cash equivalents of approximately $107 million, which includes
$40 million of subsidiary cash.
The Liberty Formula One common stock is intended to track and reflect the separate economic performance of
the businesses, assets and liabilities attributed to the Formula One Group. Liberty attributed to the Formula One Group all
of the businesses, assets and liabilities of Liberty other than those specifically attributed to the Braves Group or the Liberty
SiriusXM Group, including Liberty’s interests in Formula 1 and Live Nation, an intergroup interest in the Braves Group,
Liberty’s 1.375% Cash Convertible Notes due 2023 and related financial instruments, Liberty’s 1% Cash Convertible
Notes due 2023, Liberty’s 2.25% Exchangeable Senior Debentures due 2046 and Liberty’s 2.25% Exchangeable Senior
Debentures due 2048. As of December 31, 2018, the Formula One Group has cash and cash equivalents of approximately
$160 million, which includes $30 million of subsidiary cash.
As part of the Recapitalization, the Formula One Group initially held a 20% intergroup interest in the Braves
Group. As a result of the rights offering, the number of notional shares representing the intergroup interest held by the
Formula One Group was adjusted to 9,084,940, representing a 15.1% intergroup interest in the Braves Group at
December 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 Series C Liberty Braves common stock issuable to the Formula One Group with respect to
its interest in the Braves Group. The intergroup interest may be settled, at the discretion of the Company’s board of
directors, through the transfer of newly issued shares of Liberty Braves common stock, cash and/or other assets to the
Formula One Group. Accordingly, the intergroup interest attributable to the Formula One Group is presented as an asset
and the intergroup interest attributable to the Braves Group is presented as a liability in the attributed financial statements
and the offsetting amounts between tracking stock groups are eliminated in consolidation. The intergroup interest will
remain outstanding until the cancellation 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.
See page F-96 to this Annual Report for unaudited attributed financial information for Liberty’s tracking stock
groups.
Cash equivalents consist of investments which are readily convertible into cash and have maturities of three
months or less at the time of acquisition.
F-42
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Receivables
Receivables are reflected net of an allowance for doubtful accounts and sales returns. Such allowance aggregated
$20 million and $12 million at December 31, 2018 and 2017, respectively. Activity in the year ended December 31, 2018
included an increase of $68 million of bad debt charged to expense and $60 million of write-offs. Activity in the year ended
December 31, 2017 included an increase of $57 million of bad debt charged to expense and $55 million of write-offs.
Activity in the year ended December 31, 2016 included an increase of $56 million of bad debt charged to expense and
$53 million of write-offs.
Investments
All marketable equity and debt securities held by the Company are carried at fair value, generally based on quoted
market prices and changes in the fair value of such securities are reported in realized and unrealized gain (losses) on
financial instruments in the accompanying consolidated statements of operations. The Company elected the measurement
alternative (defined as the cost of the security, adjusted for changes in fair value when there are observable prices, less
impairments) for its equity securities without readily determinable fair values. The total value of marketable debt and
equity securities aggregated $1,195 million and $1,047 million as of December 31, 2018 and 2017, respectively.
For those investments in affiliates in which the Company has the ability to exercise significant influence, the
equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize
the Company’s share of net earnings or losses of the affiliate as they occur rather than as dividends or other distributions
are received. Losses are limited to the extent of the Company’s investment in, advances to and commitments for the
investee. In the event the Company is unable to obtain accurate financial information from an equity affiliate in a timely
manner, the Company records its share of earnings or losses of such affiliate on a lag.
Changes in the Company’s proportionate share of the underlying equity of an equity method investee, which result
from the issuance of additional equity securities by such equity investee, are recognized in the statement of operations
through the other, net line item. To the extent there is a difference between our ownership percentage in the underlying
equity of an equity method investee and our carrying value, such difference is accounted for as if the equity method investee
were a consolidated subsidiary.
The Company continually reviews its equity investments to determine whether a decline in fair value below the
carrying value is other than temporary. The primary factors the Company considers in its determination are the length of
time that the fair value of the investment is below the Company’s carrying value; the severity of the decline; and the
financial condition, operating performance and near term prospects of the investee. In addition, the Company considers
the reason for the decline in fair value, be it general market conditions, industry specific or investee specific; analysts’
ratings and estimates of 12-month share price targets for the investee; changes in stock price or valuation subsequent to
the balance sheet date; and the Company’s intent and ability to hold the investment for a period of time sufficient to allow
for a recovery in fair value. If the decline in fair value is deemed to be other than temporary, the carrying value of the
equity method investment is written down to fair value. In situations where the fair value of an investment is not evident
due to a lack of a public market price or other factors, the Company uses its best estimates and assumptions to arrive at the
estimated fair value of such investment. The Company’s assessment of the foregoing factors involves a high degree of
judgment and accordingly, actual results may differ materially from the Company’s estimates and judgments. Writedowns
for equity method investments are included in share of earnings (losses) of affiliates.
The Company performs a qualitative assessment for equity securities without readily determinable fair values
each reporting period to determine whether the security could be impaired. If the qualitative assessment indicates that an
impairment could exist, we estimate the fair value of the investments, and, to the extent the security’s fair value is less than
its carrying value, an impairment is recorded in the consolidated statements of operations.
F-43
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
All of the Company’s derivatives, whether designated in hedging relationships or not, are recorded on the balance
sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and
of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow
hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive earnings
and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes
in the fair value of cash flow hedges are recognized in earnings. If the derivative is not designated as a hedge, changes in
the fair value of the derivative are recognized in earnings. None of the Company’s derivatives are currently designated as
hedges.
The fair value of certain of the Company’s derivative instruments are estimated using the Black-Scholes model.
The Black-Scholes model incorporates a number of variables in determining such fair values, including expected volatility
of the underlying security and an appropriate discount rate. The Company obtained volatility rates from pricing services
based on the expected volatility of the underlying security over the remaining term of the derivative instrument. A discount
rate was obtained at the inception of the derivative instrument and updated each reporting period, based on the Company’s
estimate of the discount rate at which it could currently settle the derivative instrument. The Company considered its own
credit risk as well as the credit risk of its counterparties in estimating the discount rate. Considerable management judgment
was required in estimating the Black-Scholes variables.
Property and equipment, including significant improvements, is stated at cost. Depreciation is computed using
the straight-line method using estimated useful lives. Depreciation expense for the years ended December 31, 2018, 2017
and 2016 was $251 million, $230 million and $186 million, respectively.
A portion of the interest on funds borrowed to finance the construction of the Braves ballpark and mixed-use
development as well as the launch of SIRIUS XM’s satellites and launch vehicles is capitalized. Capitalized interest is
recorded as part of the asset’s cost and depreciated over the asset’s useful life. Capitalized interest costs for the years ended
December 31, 2018 and 2017 was approximately $12 million and $10 million, respectively, which related to the
construction of SIRIUS XM’s satellites during the year ended December 31, 2018 and construction of the Braves ballpark
and mixed-use development and SIRIUS XM’s satellites during the year ended December 31, 2017.
Intangible Assets
Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment upon certain triggering events. Goodwill and other intangible
F-44
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
assets with indefinite useful lives (collectively, “indefinite lived intangible assets”) are not amortized, but instead are tested
for impairment at least annually. Our annual impairment assessment of our indefinite-lived intangible assets is performed
during the fourth quarter of each year.
In January 2017, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance to
simplify the measurement of goodwill impairment. Under the new guidance, an entity no longer performs a hypothetical
purchase price allocation to measure goodwill impairment. Instead, a goodwill impairment is measured using the difference
between the carrying value and the fair value of the reporting unit. The Company early adopted this guidance during the
fourth quarter of 2017.
The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely
than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is
necessary to perform the quantitative goodwill impairment test. The accounting guidance also allows entities the option to
bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment
test. The entity may resume performing the qualitative assessment in any subsequent period.
In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting
unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more
likely than not that an indicated impairment exists for any of our reporting units. The Company considers whether there
are any negative macroeconomic conditions, industry specific conditions, market changes, increased competition,
increased costs in doing business, management challenges, the legal environments and how these factors might impact
company specific performance in future periods. As part of the analysis, the Company also considers fair value
determinations for certain reporting units that have been made at various points throughout the current and prior years for
other purposes. If based on the qualitative analysis it is more likely than not that an impairment exists, the Company
performs the quantitative impairment test.
The quantitative goodwill impairment test compares the estimated fair value of a reporting unit to its carrying
value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate
discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and
timing of expected future cash flows. The cash flows employed in Liberty’s valuation analysis are based on management’s
best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years.
There is no assurance that actual results in the future will approximate these forecasts.
The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is
more likely than not that an indefinite-lived intangible asset is impaired. The accounting guidance also allows entities the
option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to
the quantitative impairment test. The entity may resume performing the qualitative assessment in any subsequent period.
If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-
lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the
carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount
equal to that excess.
The Company periodically reviews the carrying amounts of its property and equipment and its intangible assets
(other than goodwill and indefinite-lived intangibles) to determine whether current events or circumstances indicate that
such carrying amounts may not be recoverable. If the carrying amount of the asset group is greater than the expected
undiscounted cash flows to be generated by such asset group, an impairment adjustment is to be recognized. Such
adjustment is measured by the amount that the carrying value of such asset groups exceeds their fair value. The Company
F-45
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows
using an appropriate discount rate. Considerable management judgment is necessary to estimate the fair value of asset
groups. Accordingly, actual results could vary significantly from such estimates. Asset groups to be disposed of are carried
at the lower of their financial statement carrying amount or fair value less costs to sell.
Noncontrolling Interests
The Company reports noncontrolling interests of subsidiaries within equity in the balance sheet and the amount
of consolidated net income attributable to the parent and to the noncontrolling interest is presented in the statement of
operations. Also, changes in ownership interests in subsidiaries in which the Company maintains a controlling interest are
recorded in equity.
Revenue Recognition
In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers. The new
guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised
goods or services to customers. This new guidance also requires additional disclosure about the nature, amount, timing
and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes
in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued
additional guidance which clarifies principal versus agent considerations, and in April 2016, the FASB issued further
guidance which clarifies the identification of performance obligations and the implementation guidance for licensing. The
updated guidance replaced most existing revenue recognition guidance in U.S. generally accepted accounting principles
(“GAAP”). The Company adopted the new guidance, which established Accounting Standards Codification Topic 606
(“ASC 606” or the “new revenue standard”), effective January 1, 2018 under the modified retrospective transition method.
Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts
are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605.
As part of adopting the new revenue standard under the modified retrospective transition method, the Company
elected to utilize certain practical expedients as permitted under ASC 606. The Company elected to apply the guidance
from ASC 606 only to contracts that were not completed as of January 1, 2018. Completed contracts are those contracts
for which substantially all of the revenue had been recognized under ASC 605. The Company also elected to utilize the
practical expedient for contract modifications. For modified contracts, the Company did not separately evaluate the effects
of each contract modification that occurred prior to January 1, 2018. Instead, the Company reflected the aggregate effect
of all contract modifications (on a contract-by-contract basis) that occurred prior to January 1, 2018 by identifying the
satisfied and unsatisfied performance obligations and allocating the transaction price to such performance obligations.
Sales, value add, and other taxes when collected concurrently with revenue producing activities are excluded from
revenue. Incremental costs of obtaining a contract are expensed when the amortization period of the asset is one year or
less. To the extent the incremental costs of obtaining a contract relate to a period greater than one year, the Company
amortizes such incremental costs in a manner that is consistent with the transfer to the customer of the goods or services
to which the asset relates. If, at contract inception, we determine the time period between when we transfer a promised
good or service to a customer and when the customer pays us for that good or service is one year or less, we do not adjust
the promised amount of consideration for the effects of a significant financing component.
F-46
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The cumulative effect of the changes made to the consolidated balance sheet as of January 1, 2018 for the adoption
of ASC 606 are as follows:
Balance at Balance at
December 31, Adoption of January 1,
2017 ASC 606 2018
in millions
Assets
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 356 55 411
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 599 37 636
In accordance with the new revenue standard requirements, the following table illustrates the impact on our
reported results in the consolidated statements of operations assuming we did not adopt the new revenue standard on
January 1, 2018. Other than previously discussed, upon the adoption of the revenue standard on January 1, 2018, there
were no additional material adjustments to our consolidated balance sheet as of December 31, 2018.
F-47
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Our customers generally pay for services in advance of the performance obligation and therefore these
prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our consolidated statement
of operations as the services are provided. Changes in the contract liability balance for SIRIUS XM during the year ended
December 31, 2018 were not materially impacted by other factors. The opening and closing balances for our deferred
revenue related to Formula 1 and Braves Holdings was approximately $59 million and $154 million, respectively. The
primary cause for the increase related to the receipt of cash from our customers in advance of satisfying our performance
obligations.
As the majority of SIRIUS XM contracts are one year or less, SIRIUS XM utilized the optional exemption under
ASC 606 and has not disclosed information about the remaining performance obligations for contracts which have original
expected durations of one year or less. As of December 31, 2018, less than ten percent of the SIRIUS XM total deferred
revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials
which are typically provided for three to five years as well as for self-pay customers who prepay for their audio
subscriptions for up to three years in advance. These amounts will be recognized on a straight-line basis as SIRIUS XM’s
services are provided.
Significant portions of the transaction prices for Formula 1 and Braves Holdings are related to undelivered
performance obligations that are under contractual arrangements that extend beyond one year. The Company anticipates
recognizing revenue from the delivery of such performance obligations of approximately $1,905 million in 2019, $1,779
million in 2020, $4,603 million in 2021 through 2026, and $449 million thereafter, primarily recognized through 2035.
We have not included any amounts in the undelivered performance obligations amounts for Formula 1 and Braves Holdings
for those performance obligations that relate to a contract with an original expected duration of one year or less.
Below is a summary of the impacts of the new revenue standard on SIRIUS XM, Formula 1 and Braves Holdings.
SIRIUS XM
Year ended
December 31, 2018
in millions
Subscriber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,594
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Music Royalty and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834
Total SIRIUS XM revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,771
The new revenue standard primarily impacts how SIRIUS XM accounts for revenue share payments as well as
other immaterial impacts.
SIRIUS XM previously recorded revenue share related to paid-trials as Revenue share and royalties expense.
Under the new guidance, SIRUS XM has recorded these revenue share payments as a reduction to revenue as the payments
do not transfer a distinct good or service to SIRIUS XM. Prior to the adoption, a portion of deferred revenue was for the
revenue share related to paid trials. Under the new revenue standard, SIRIUS XM reclassified the revenue share related to
paid-trials existing as of the date of adoption from current portion of deferred revenue to accounts payable and accrued
liabilities. For new paid-trials, the net amount of the paid trial will be recorded as deferred revenue and the portion of
revenue share will be recorded to accounts payable and accrued liabilities.
F-48
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Activation fees were previously recognized over the expected subscriber life using the straight-line method. Under
the new guidance, activation fees have been recognized over a one month period from activation as the activation fees are
non-refundable and they do not convey a material right. Loyalty payments to major automakers (“OEMs”) were previously
expensed when incurred as subscriber acquisition costs. Under the new guidance, these costs have been capitalized in other
current assets as costs to obtain a contract and these costs will be amortized to subscriber acquisition costs over an average
self-pay subscriber life of that OEM. These changes do not have a material impact to the consolidated financial statements.
The following is a description of the principal activities from which SIRIUS XM generates its revenue - including
from self-pay and paid promotional subscribers, advertising, and sales of equipment.
Subscriber revenue. Subscriber revenue consists primarily of subscription fees and other ancillary subscription
based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service
for the period are satisfied, which is over time as SIRIUS XM’s subscription services are continuously transmitted and can
be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio
typically receive between a three and twelve month subscription to SIRIUS XM’s service. In certain cases, the subscription
fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from automakers or
directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which
commences upon sale. Activation fees are recognized over one month as the activation fees are non-refundable and do not
provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases,
SIRIUS XM pays a loyalty fee to the OEM when it receives a certain amount of payments from self-pay customers acquired
from that OEM. These fees are considered incremental costs to obtain a contract and are therefore recognized as an asset
and amortized to Subscriber acquisition costs over an average subscriber life. Revenue share and loyalty fees paid to an
OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or
service.
Advertising revenue. SIRIUS XM recognizes revenue from the sale of advertising as performance obligations
are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot
is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for SIRIUS XM’s
advertising inventory and are reported as a reduction of advertising revenue. Additionally, SIRIUS XM pays certain third
parties a percentage of advertising revenue. Advertising revenue is recorded gross of such revenue share payments as
SIRIUS XM controls the advertising service including the ability to establish pricing and SIRIUS XM is primarily
responsible for providing the service. Advertising revenue share payments are recorded to revenue share and royalties
during the period in which the advertising is transmitted.
Equipment revenue. Equipment revenue and royalties from the sale of satellite radios, components and
accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon
shipment. Revenue is recognized net of discounts and rebates. Shipping and handling costs billed to customers are recorded
as revenue. Shipping and handling costs associated with shipping goods to customers are reported as a component of Cost
of subscriber services.
Music Royalty and Other revenue. Music royalty and other revenue primarily consists of U.S. music royalty
fees ("MRF") collected from subscribers. The related costs SIRIUS XM incurs for the right to broadcast music and other
programming are recorded as revenue share and royalties expense. Fees received from subscribers for the MRF are
F-49
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the
subscription services which are continuously delivered to SIRIUS XM’s customers.
SIRIUS XM revenue is reported net of any taxes assessed by a governmental authority that is both imposed on,
and concurrent with, a specific revenue-producing transaction between a seller and a customer in the consolidated
statements of operations.
Formula 1
Year ended
December 31, 2018
in millions
Primary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,487
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
Total Formula 1 revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,827
Upon entering into a new arrangement, Formula 1 occasionally incurs certain incremental costs of obtaining a
contract. These incremental costs relate to commission amounts that will be paid over the life of the contract for which the
recipient does not have any substantive future performance requirement to earn such commission. Accordingly, the
commission costs will be capitalized and amortized over the life of the contract. Upon adoption of the new revenue
standard, Formula 1 recorded a contract cost asset and a corresponding commission payable.
The following is a description of principal activities from which Formula 1 generates its revenue.
Primary revenue. Formula 1 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. Formula 1 derives its primary revenue from the
commercial exploitation and development of the World Championship through a combination of entering into race
promotion, broadcasting and advertising and sponsorship arrangements. Primary revenue derived from the commercial
exploitation of the World Championship is (i) recognized on an event by event basis for those performance obligations
associated with a specific event based on the fees within the underlying contractual arrangement and (ii) recognized over
time for those performance obligations associated with a period of time that is greater than a single specific event (for
example, over the entire race season or calendar year) based on the fees within the underlying contractual arrangement.
Other revenue. Formula 1 earns other revenue from miscellaneous and ancillary sources, primarily related to
administering the shipment of cars and equipment to and from the events outside of Europe and revenue from the sale of
tickets to the Formula One Paddock Club event-based hospitality at certain of the motor races. To the extent such revenue
relates to services provided or rights associated with a specific event, the revenue is recognized upon occurrence of the
related event and to the extent such revenue relates to services provided or rights over a longer period of time, the revenue
is recognized over time.
F-50
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Braves Holdings
Year ended
December 31, 2018
in millions
Baseball . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 404
Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Total Braves Holdings revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 442
The new revenue standard primarily impacted Braves Holdings revenue recognition related to broadcast rights
revenue. Under the old revenue standard, Braves Holdings recognized revenue from its broadcast rights arrangements
limited to the amounts that were not contingent on the provision of future goods or services, which resulted in revenue
recognition approximating the cash received. Upon adoption of the new revenue standard, Braves Holdings is required to
estimate the entire transaction price of the contractual arrangements and recognize revenue allocated to each of the
performance obligations within the contractual arrangements as those performance obligations are satisfied. Such
performance obligations are typically satisfied over time and result in differences between revenue recognized and cash
received, dependent on how far into a contractual arrangement Braves Holdings is at any given reporting period. The new
revenue standard resulted in an immaterial change in revenue recognized during the year ended December 31, 2018 and
an immaterial effect to the consolidated balance sheet as compared to the old revenue standard.
The following is a description of principal activities from which Braves Holdings generates its revenue.
Baseball revenue. Revenue for Braves Holdings ticket sales, signage and suites are recognized on a per game
basis during the baseball season based on a pro rata share of total revenue earned during the entire baseball season to the
total number of home games during the season. Broadcasting rights are recognized on a per game basis during the baseball
season based on the pro rata number of games played to date to the total number of games during the season. Concession
and parking revenue are recognized on a per game basis during the baseball season. Major League Baseball (“MLB”)
revenue is earned throughout the year based on an estimate of revenue generated by MLB on behalf of the 30 MLB clubs.
Sources of MLB revenue include distributions from the MLB Central Fund, distributions from MLB Properties and
revenue sharing income, if applicable.
Development revenue. Revenue from Braves Holdings’ minimum rents are recognized on a straight-line basis
over the terms of their respective lease agreements. Some retail tenants are required to pay overage rents based on sales
over a stated base amount during the lease term. Overage rents are only recognized when each tenant’s sales exceed the
applicable sales threshold. Tenants reimburse Braves Holdings for a substantial portion of Braves Holdings operating
expenses, including common area maintenance, real estate taxes and property insurance. Braves Holdings accrues
reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable
expenditures are incurred. Braves Holdings recognizes differences between estimated recoveries and the final billed
amounts in the subsequent year. These differences were not material in any period presented. Sponsorship revenue is
recognized on a straight-line basis over each annual period. Parking revenue is recognized daily based on actual usage.
F-51
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Revenue Share
SIRIUS XM shares a portion of its subscription revenue earned from self-pay subscribers and paid promotional
subscribers with certain automakers. The terms of the revenue share agreements vary with each automaker, but are typically
based upon the earned audio revenue as reported or gross billed audio revenue. Such shared revenue is recorded as an
expense and not as a reduction to revenue.
Programming Costs
Programming costs which are for a specified number of events are amortized on an event-by-event basis;
programming costs which are for a specified season or include programming through a dedicated channel are amortized
over the season or period on a straight-line basis. SIRIUS XM allocates a portion of certain programming costs which are
related to sponsorship and marketing activities to selling, general and administrative expense on a straight-line basis over
the term of the agreement.
Cost of Formula 1 revenue consists of team payments and hospitality costs, which are principally related to
catering and other aspects of the production and delivery of the Paddock Club, and 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. Other costs include annual Federation Internationale de l’Automobile regulatory
fees, advertising and sponsorship commissions and those incurred in the provision and sale of freight, travel and logistical
services, F2 and GP3 cars, parts and maintenance services, television production and post-production services, advertising
production services and digital and social media activities. These costs are largely variable in nature and relate directly to
revenue opportunities.
Subscriber acquisition costs consist of costs incurred to acquire new subscribers and include hardware subsidies
paid to radio manufacturers, distributors and automakers, including subsidies paid to automakers who include a satellite
radio and a prepaid subscription to SIRIUS XM service in the sale or lease price of a new vehicle; subsidies paid for
chipsets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets;
commissions paid to retailers and automakers as incentives to purchase, install and activate radios; product warranty
obligations; freight; and provisions for inventory allowance attributable to inventory consumed in SIRIUS XM’s
automaker and retail distribution channels. Subscriber acquisition costs do not include advertising costs, loyalty payments
to distributors and dealers of radios and revenue share payments to automakers and retailers of radios.
Subsidies paid to radio manufacturers and automakers are expensed upon installation, shipment, receipt of product
or activation and are included in Subscriber acquisition costs because SIRIUS XM is responsible for providing the service
to the customers. Commissions paid to retailers and automakers are expensed upon either the sale or activation of radios.
Chipsets that are shipped to radio manufacturers and held on consignment are recorded as inventory and expensed as
subscriber acquisition costs when placed into production by radio manufacturers. Costs for chipsets not held on
consignment are expensed as subscriber acquisition costs when the automaker confirms receipt.
F-52
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Stock-Based Compensation
As more fully described in note 14, Liberty has granted to its directors, employees and employees of its
subsidiaries options and restricted stock to purchase shares of Liberty common stock (collectively, “Awards”). The
Company measures the cost of employee services received in exchange for an Award based on the grant-date fair value of
the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the
vesting period of the Award).
Included in the accompanying consolidated statements of operations are the following amounts of stock-based
compensation:
In March 2016, the FASB issued new accounting guidance on share-based payment accounting. The areas for
simplification in this update involve several aspects of the accounting for share-based payment transactions, including the
income tax consequences, classification of awards as either equity or liabilities, forfeiture calculations, and classification
on the statement of cash flows. We early adopted this new guidance in the third quarter of 2016. The Company applied the
new guidance prospectively from January 1, 2016. In accordance with the new guidance, excess tax benefits and tax
deficiencies are recognized as income tax benefit or expense rather than as additional paid-in capital. The Company has
elected to recognize forfeitures as they occur rather than continue to estimate expected forfeitures. In addition, pursuant to
the new guidance, excess tax benefits are classified as an operating activity on the consolidated statements of cash flows.
The recognition of excess tax benefits and deficiencies are applied prospectively. For tax benefits that were not previously
recognized and for adjustments to compensation cost based on actual forfeitures, the Company recorded a cumulative-
effect adjustment in retained earnings as of January 1, 2016 in the amount of $66 million.
In June 2018, the FASB issued new accounting guidance which expands the scope of existing accounting
guidance for stock-based compensation to include share-based payments made to nonemployees. The new guidance
substantially aligns the accounting for payments made to nonemployees and employees. Upon adoption, equity classified
share-based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to
assess the probability of satisfying performance conditions if any are present and awards will continue to be classified
according to existing accounting guidance upon vesting, which eliminates the need to reassess classification upon vesting,
consistent with awards granted to employees. The guidance is effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years, and early adoption is permitted. SIRIUS XM, the Company’s only
subsidiary with nonemployee share-based payment arrangements, elected to early adopt this guidance effective July 1,
2018. Upon adoption, the previously liability-classified awards were reclassified to equity. The impact of the adoption of
this guidance was a $22 million increase to additional paid-in capital, $3 million decrease in opening retained earnings, $7
million increase in noncontrolling interest in equity of subsidiaries and a decrease of $26 million in accounts payable and
accrued liabilities.
F-53
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Income Taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying value
amounts and income tax bases of assets and liabilities and the expected benefits of utilizing net operating loss and tax
credit carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing
jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered
or settled. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it more likely than
not such net deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of an enacted change
in tax rates is recognized in income in the period that includes the enactment date.
When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes
interest expense from the first period the interest would begin accruing according to the relevant tax law. Such interest
expense is included in interest expense in the accompanying consolidated statements of operations. Any accrual of penalties
related to underpayment of income taxes on uncertain tax positions is included in other income (expense) in the
accompanying consolidated statements of operations.
In October 2016, the FASB issued new accounting guidance on income tax accounting associated with intra-entity
transfers of assets other than inventory. This accounting update, which is part of the FASB’s simplification initiative, is
intended to reduce diversity in practice and the complexity of tax accounting, particularly for those transfers involving
intellectual property. This new guidance requires an entity to recognize the income tax consequences of an intra-entity
transfer of an asset other than inventory when the transfer occurs. The guidance is effective for fiscal years, and interim
periods within those fiscal years, beginning after December 15, 2017. Upon adoption, an entity may apply the new
guidance only on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of
the beginning of the period of adoption. The Company adopted this guidance effective January 1, 2018. The adoption of
this guidance did not have a material impact on the Company’s consolidated financial statements.
In February 2018, the FASB issued new accounting guidance on comprehensive income to provide an option for
an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) enacted in December 2017, as
discussed in note 11, from accumulated other comprehensive income directly to retained earnings. The stranded tax effects
result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive
income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal
years beginning after December 15, 2018, with early adoption permitted. The Company does not expect this new guidance
will have a material impact to its consolidated financial statements or related disclosures.
Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) by the weighted
average number of common shares that were outstanding for the period at the Company. Diluted EPS presents the dilutive
effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods
presented.
As discussed in note 2, on April 15, 2016, the Company completed a recapitalization of its common stock into
three new tracking stock groups, one designated as the Liberty SiriusXM common stock, one designated as the Liberty
Braves common stock and one designated as the Liberty Media common stock. As further discussed in note 2, the Liberty
Media common stock was renamed Liberty Formula One common stock on January 24, 2017 shortly after the Second
Closing. The operating results prior to the Recapitalization are attributed to Liberty Media Corporation stockholders in the
aggregate, and the operating results subsequent to the Recapitalization are attributed to the respective tracking stock groups.
F-54
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Excluded from diluted EPS for the period subsequent to the Recapitalization through December 31, 2016 are
approximately 21 million potentially dilutive shares of Series A Liberty SiriusXM common stock, 2 million potentially
dilutive shares of Series A Liberty Braves common stock and 5 million potentially dilutive shares of Series A Liberty
Formula One common stock, primarily due to warrants issued in connection with the Bond Hedge Transaction (note 10),
because their inclusion would be antidilutive. The Amended Warrant Transactions (as defined and discussed in note 10)
may have a dilutive effect with respect to the shares comprising the Securities Basket underlying the warrants to the extent
that the settlement price exceeds the strike price of the warrants, and the warrants are settled in shares comprising such
Securities Basket. The warrants and any potential future settlement have been attributed to the Formula One Group.
The basic and diluted EPS calculation is based on the following weighted average shares outstanding (“WASO”)
of Liberty’s common stock. Excluded from diluted EPS for the periods from January 1, 2016 through the Recapitalization
are 23 million potential common shares, primarily due to warrants issued in connection with the Bond Hedge Transaction
(as defined and discussed in note 10) because their inclusion would be anti-dilutive.
January 1, 2016
through
April 15, 2016
number of shares in millions
Basic WASO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335
Potentially dilutive shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Diluted WASO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337
The basic and diluted EPS calculations are based on the following weighted average outstanding shares of
common stock. Excluded from diluted EPS for the years ended December 31, 2018 and 2017 are 22 million and 22 million
potentially dilutive shares of Liberty SiriusXM common stock, respectively, because their inclusion would be antidilutive.
The basic and diluted EPS calculations are based on the following weighted average outstanding shares of
common stock. Excluded from diluted EPS for the years ended December 31, 2018 and 2017 are 2 million and 2 million
potentially dilutive shares of Liberty Braves common stock, respectively, because their inclusion would be antidilutive.
F-55
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
(a) Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are
reported since the result would be antidilutive.
(b) As discussed in note 2, subsequent to the Recapitalization, Liberty distributed subscription rights to holders of Liberty
Braves common stock, which were priced at a discount to the market value, to acquire additional shares of Liberty
Braves common stock. The rights offering, because of the discount, is considered a stock dividend which requires
retroactive treatment for prior periods for the weighted average shares outstanding.
(c) As discussed in note 2, following the Recapitalization and Series C Liberty Braves common stock rights offering, the
number of notional shares representing the Formula One Group’s intergroup interest in the Braves Group was adjusted
to 9,084,940 shares. 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. 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 consolidated statements of operations.
The notional shares representing the intergroup interest have no impact on the basic earnings per share weighted
average number of shares outstanding. However, in periods where the Braves Group has net earnings, the notional
shares representing the intergroup interest are included in the diluted earnings per share WASO as if the shares had
been issued and outstanding during the period. In periods where the Braves Group has net earnings, an adjustment is
also made to the numerator in the diluted earnings per share calculation for the unrealized gain or loss incurred from
marking the intergroup interest to fair value during the period as follows:
April 18,
2016
through
Year ended Year ended December 31,
December 31, December 31, 2016
2018 2017 (a) (a)
amounts in millions
Basic earnings (loss) attributable to Liberty
Braves shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5 (25) (30)
Unrealized (gain) loss on the intergroup interest . . 24 15 27
Diluted earnings (loss) attributable to Liberty
Braves shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29 (10) (3)
(a) Unrealized gains on the intergroup interest are excluded from the computation of diluted EPS during periods
in which net losses attributable to the Braves Group are reported since the gain would be antidilutive.
F-56
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The basic and diluted EPS calculations are based on the following weighted average outstanding shares of
common stock. Excluded from diluted EPS for the years ended December 31, 2018 and 2017 are 8 million and 5 million
potentially dilutive shares of Liberty Formula One common stock, respectively, because their inclusion would be
antidilutive.
(a) Unrealized gains on the intergroup interest are excluded from the computation of diluted EPS during periods
in which net losses attributable to the Formula One Group are reported since the gain would be antidilutive.
Certain prior period amounts have been reclassified for comparability with the current year presentation.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The
Company considers (i) fair value measurement of non-financial instruments, (ii) accounting for income taxes and (iii) the
determination of the useful life of SIRIUS XM’s broadcast/transmission system to be its most significant estimates.
The Company holds investments that are accounted for using the equity method. The Company does not control
the decision making process or business management practices of these affiliates. Accordingly, the Company relies on
management of these affiliates to provide it with accurate financial information prepared in accordance with GAAP that
the Company uses in the application of the equity method. In addition, the Company relies on audit reports that are provided
by the affiliates’ independent auditors on the financial statements of such affiliates. The Company is not aware, however,
of any errors in or possible misstatements of the financial information provided by its equity affiliates that would have a
material effect on the Company’s consolidated financial statements.
In February 2016, the FASB issued new accounting guidance on lease accounting. This guidance requires a
company to recognize lease assets and lease liabilities arising from operating leases in the statement of financial position.
Additionally, the criteria for classifying a lease as a finance lease versus an operating lease are substantially the same as
the previous guidance. The amendments in this update are effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years, and early adoption is permitted. We plan to adopt this guidance on
January 1, 2019 and expect to elect certain practical expedients under the transition guidance. Additionally, the Company
plans elect the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and does
not plan to restate prior periods. The Company is currently working with its consolidated subsidiaries to evaluate the impact
F-57
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
of the adoption of this new guidance on our consolidated financial statements, including identifying the population of
leases, evaluating technology solutions and collecting lease data.
SIRIUS XM’s leases consist of repeater leases, facility leases and equipment leases. SIRIUS XM expects the
adoption of the new guidance will result in the recognition of right-of-use assets of approximately $360 million and lease
liabilities of approximately $370 million in its consolidated balance sheets for operating leases and will not impact its
consolidated statements of operations or debt.
Braves Holdings is evaluating the impact of the new guidance with respect to its baseball stadium, which is
accounted for as a financing obligation under the current build-to-suit lease guidance. The transition guidance for a build-
to-suit lease arrangement requires the lessee to derecognize the assets and liabilities that were recognized solely as a result
of a transaction’s build-to-suit designation under the current guidance, with any difference recorded as an adjustment to
equity as of the adoption date. Braves Holdings will then apply the general lessee guidance under the new standard to the
baseball stadium lease, including classifying it as either a finance or operating lease, and record a right-of-use asset and
lease liability on the balance sheet, which will be initially measured at the present value of the remaining lease payments
over the lease term.
Cash paid for interest, net of amounts capitalized. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 586 561 327
In November 2016, the FASB issued a new accounting standard which requires that the statement of cash flows
include restricted cash and cash equivalents when reconciling beginning and ending cash. The guidance is effective for
fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted this
new guidance effective January 1, 2018. Upon adoption, the Company added restricted cash to the reconciliation of
beginning and ending cash and cash equivalents and included a reconciliation of total cash and cash equivalents and
restricted cash to the balance sheet for each period presented in the consolidated statements of cash flows. The following
F-58
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
table reconciles cash and cash equivalents and restricted cash reported in our consolidated balance sheets to the total
amount presented in our consolidated statements of cash flows:
In August 2016, the FASB issued new accounting guidance which addresses eight specific cash flow issues to reduce
the diversity in practice for appropriate classification on the statement of cash flows. The Company adopted this guidance
during the first quarter of 2018, and there was no significant effect of the standard on its consolidated financial statements.
(5) Acquisitions
Formula 1
On September 7, 2016, Liberty, through its indirect wholly owned subsidiary Liberty GR Cayman Acquisition
Company, entered into two definitive stock purchase agreements relating to the acquisition of Delta Topco, the parent
company of Formula 1, a global motorsports business, from a consortium of sellers led by CVC Capital Partners (“CVC”).
The transactions contemplated by the first purchase agreement were completed on September 7, 2016 and provided for
Liberty’s acquisition of slightly less than a 20% minority stake in Formula 1 on an undiluted basis for $746 million, funded
entirely in cash (which is equal to $821 million in consideration less a $75 million holdback that was repaid by Liberty to
selling stockholders upon completion of the Second Closing). On October 27, 2016, under the terms of the first purchase
agreement, Liberty acquired an additional incremental equity interest of Delta Topco, maintaining Liberty’s investment in
Delta Topco on an undiluted basis and increasing slightly to 19.1% on a fully diluted basis. On January 23, 2017, Liberty
acquired 100% of the fully diluted equity interests of Delta Topco, other than a nominal number of shares held by certain
Formula 1 teams, in a second closing under the second purchase agreement (and following the unwind of the first purchase
agreement). Prior to the Second Closing, CVC continued to be the controlling shareholder of Formula 1, and Liberty did not
have any voting interests or board representation in Formula 1. As a result, Liberty concluded that it did not have significant
influence over Formula 1, and therefore our initial investment in Formula 1 was accounted for as a cost investment until the
completion of the Second Closing, at which time we began consolidating Formula 1.
The transaction price for the acquisition represents an enterprise value for Formula 1 of approximately $8.0 billion
and an equity value of approximately $4.4 billion, calculated at the time of the first closing. The total consideration at the time
of closing was $4.7 billion, comprised of $3.05 billion of cash (including the investments made under the first purchase
agreement during 2016) and approximately $1.6 billion of non-cash consideration represented by approximately 56 million
newly issued shares of Series C Liberty Formula One common stock.
In connection with the transaction, Liberty entered into a $500 million margin loan on November 8, 2016, secured
by shares of Live Nation and other public equity securities held by Liberty (the ‘‘Live Nation Margin Loan’’). No amounts
were drawn on the Live Nation Margin Loan at December 31, 2016. Liberty drew approximately $350 million to use for the
purchase of Formula 1, on January 23, 2017. See note 10 for additional discussion regarding the Live Nation Margin Loan.
At the Second Closing, the Company issued 62 million new shares of Series C Liberty Formula One common
stock, which were subject to market co-ordination and lock-up agreements, to certain third party investors at a price per
share of $25.00. As a result, the stock component of the consideration payable to the selling shareholders in the Formula 1
F-59
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
acquisition was decreased by 62 million shares, and the cash component of the consideration payable to the selling
shareholders in the Formula 1 acquisition was increased by $1.55 billion.
Also concurrently with the Second Closing, the Company used a portion of the net proceeds of its $450 million
cash offering of 1% Cash convertible Notes due 2023, as discussed in note 10, to increase the cash consideration payable
to the selling shareholders by approximately $400 million. The additional 19 million shares of Series C Liberty Formula
One common stock that would otherwise have been issued to the selling shareholders based on the per share purchase price
of $21.26 were held in reserve by the Company for possible sale to the Formula 1 teams, until such opportunity expired in
July of 2017.
In connection with the Second Closing, Delta Topco issued $351 million subordinated exchangeable notes, upon
the conversion of certain outstanding Delta Topco loan notes, that bear interest at 2% per annum and mature in July 2019,
exchangeable into cash or newly issued shares of Series C Liberty Formula One common stock (“Exchangeable Notes”).
See note 10 for additional discussion of this debt instrument.
Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and
represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for
separate recognition, including assembled workforce, value associated with future customers, continued innovation and
noncontractual relationships. Formula 1 amortizable intangible assets were comprised of an agreement with the Fédération
Internationale de l’Automobile (the “FIA,” and the agreement, the “FIA Agreement”) ($3.6 billion with a remaining useful
life of approximately 35 years) and customer relationships of $1.9 billion with a weighted average remaining life of
approximately 11.5 years. The FIA owns the World Championship and has granted Formula 1 the exclusive commercial
rights to the World Championship until the end of 2110. During the fourth quarter of 2017, the preliminary purchase price
allocation was adjusted, resulting in increases of $22 million to other assets and $11 million to other liabilities assumed
and decreases of $12 million to goodwill and $1 million to deferred tax liabilities. None of the acquired goodwill is
expected to be deductible for tax purposes.
Included in net earnings (loss) for the year ended December 31, 2017 is $261 million related to Formula 1’s
operations since the date of acquisition.
F-60
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The unaudited pro forma revenue and net earnings of Liberty, prepared utilizing the historical financial statements
of Formula 1, giving effect to acquisition accounting related adjustments made at the time of acquisition, as if the
acquisition of Formula 1 discussed above occurred on January 1, 2016, are as follows:
Years ended
December 31,
2017 2016
amounts in millions
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,595 7,072
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,874 743
Net earnings (loss) attributable to Liberty stockholders . . . . . . . . . . . . . . . $ 1,338 499
The pro forma results include adjustments primarily related to the amortization of acquired intangible assets. The
pro forma information is not representative of the Company’s future results of operations nor does it reflect what the
Company’s results of operations would have been if the acquisition of Formula 1 had occurred previously and the Company
consolidated Formula 1 during the periods presented.
For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs
to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active
markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2
inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability,
either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have
any recurring assets or liabilities measured at fair value that would be considered Level 3.
The majority of Liberty’s Level 2 financial instruments are debt related instruments and derivative instruments.
In addition, SIRIUS XM’s investment in Pandora is classified as Level 2. See note 7 for information related to the
investment in Pandora. The Company notes that these assets are not always traded publicly or not considered to be traded
on “active markets,” as defined in GAAP. The fair values for such instruments are derived from a typical model using
observable market data as the significant inputs or a trading price of a similar asset or liability is utilized. The fair value of
debt related instruments are based on quoted market prices but not considered to be traded on “active markets,” as defined
by GAAP. Accordingly, those debt and equity securities, financial instruments and debt or debt related instruments are
reported in the foregoing table as Level 2 fair value. The financial instrument assets included in the table above are included
in the Other assets line item in the consolidated balance sheets.
F-61
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
In January 2016, the FASB issued new accounting guidance that is intended to improve the recognition and
measurement of financial instruments. Pursuant to the new guidance, for financial liabilities for which the fair value option
has been elected, entities are required to present separately in other comprehensive income the portion of the total changes
in the fair value of the liability resulting from a change in the instrument-specific credit risk. The new standard is effective
for the Company for fiscal years and interim periods beginning after December 15, 2017. The Company adopted this
guidance effective January 1, 2018. The Company has elected the fair value option for its exchangeable debt. Prior to the
adoption of this new guidance, the Company recognized all changes in the fair value of its exchangeable debt in realized
and unrealized gains (losses) on financial instruments in the consolidated statements of operations. Upon adoption, the
Company recorded an immaterial adjustment to beginning retained earnings to reflect the amount of comprehensive
earnings related to the changes in the instrument-specific credit risk related to the Company’s exchangeable debt.
Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the
following (amounts in millions):
(a) 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.
(b) Contemporaneously with the issuance of the 1.375% Cash Convertible Notes due 2023, Liberty entered into privately
negotiated cash convertible note hedges, which are expected to offset potential cash payments Liberty would be
required to make in excess of the principal amount of the convertible notes, upon conversion of the notes. The bond
hedges are marked to market based on the trading price of underlying Series A Liberty SiriusXM, Liberty Braves and
Liberty Formula One securities and other observable market data as the significant inputs (Level 2). See note 10 for
additional discussion of the convertible notes and the bond hedges.
All investments in marketable debt and equity securities held by the Company are carried at fair value, generally
based on quoted market prices and changes in the fair value of such securities are reported in realized and unrealized gains
(losses) on financial instruments in the accompanying consolidated statements of operations. The Company elected the
measurement alternative (defined as the costs of the security, adjusted for changes in fair value when there are observable
prices, less impairments) for its equity securities without readily determinable fair values.
F-62
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Braves Group
Other equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8
Total attributed Braves Group . . . . . . . . . . . . . . . . . . . . . . . . . 8 8
(a) During the year ended December 31, 2018, the Company purchased $522 million in principal of iHeart Media, Inc.
(“iHeart”) bonds for $389 million, resulting in the Company owning an aggregate amount of $660 million in principal
of iHeart bonds as of December 31, 2018.
(b) See note 10 for details regarding the acquisition of Time Warner, Inc. (“Time Warner”) by AT&T Inc. (“AT&T).
Pandora
On September 22, 2017, a subsidiary of SIRIUS XM completed a $480 million investment in newly issued
Series A convertible preferred stock of Pandora (the “Series A Preferred Stock”). Pandora operates an internet-based music
discovery platform, offering a personalized experience for listeners. The Series A preferred stock, including accrued but
unpaid dividends, represents an approximate 19% interest in Pandora’s currently outstanding common stock and an
approximate 16% interest on an as-converted basis.
The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock
of Pandora (“Pandora Common Stock”) at an initial conversion price of $10.50 per share of Pandora Common Stock and
an initial conversion rate of 95.2381 shares of Pandora Common Stock per share of Series A Preferred Stock, subject to
certain customary anti-dilution adjustments. Holders of the Series A Preferred Stock are entitled to a cumulative dividend
at the rate of 6.0% per annum, payable quarterly in arrears, if and when declared. Any conversion of Series A Preferred
Stock may be settled by Pandora, at its option, in shares of Pandora Common Stock, cash or any combination thereof.
However, unless and until Pandora’s stockholders have approved the issuance of greater than 19.99% of the outstanding
Pandora Common Stock, the Series A Preferred Stock may not be converted into more than 19.99% of Pandora’s
outstanding Pandora Common Stock as of June 9, 2017.
The investment includes a mandatory redemption feature on any date from and after September 22, 2022 and
therefore the financial instrument has been treated as a debt security. As the investment includes a conversion option,
SIRIUS XM has elected to account for this investment under the fair value option. Any gains (losses) associated with the
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LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
change in fair value will be recognized in realized and unrealized gains (losses) on financial instruments, net in the
consolidated statements of operations. During the years ended December 31, 2018 and 2017, the Company recognized a
$28 million unrealized gain and a $17 million unrealized loss, including transaction costs, respectively, on the investment
in Pandora.
Pursuant to an Investment Agreement with Pandora, SIRIUS XM has appointed three of its senior executives or
members of its Board of Directors to Pandora’s Board of Directors, one of whom serves as the Chairman of Pandora’s
Board of Directors.
On February 1, 2019, SIRIUS XM acquired Pandora in an all-stock transaction valued at $2.9 billion. In
connection with the acquisition, each outstanding share of Pandora common stock, par value $0.0001 per share, was
converted into the right to receive 1.44 shares of SIRIUS XM common stock, par value $0.001 per share. Pandora’s Series
A Preferred Stock was cancelled upon completion of the acquisition. This issuance of SIRIUS XM Common Stock in
conjunction with the acquisition reduced our economic ownership in SIRIUS XM to approximately 67% as of February 1,
2019. The financial statements of Pandora for the year ended December 31, 2018 are not available and the initial accounting
for the acquisition of Pandora has not been completed.
Unrealized Holding Gains and Losses recorded in Accumulated other comprehensive earnings (loss)
There were no unrealized holding gains or losses related to investments in debt and equity securities at
December 31, 2018 or 2017.
Liberty has various investments accounted for using the equity method. The following table includes the
Company’s carrying amount and percentage ownership and market value (Level 1) of the more significant investments in
affiliates at December 31, 2018, and the carrying amount at December 31, 2017:
Braves Group
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA NA 92 145
Total Braves Group . . . . . . . . . . . . . . . . . . 92 145
(a) See note 10 for details regarding the number and value of shares pledged as collateral pursuant to the Live Nation
Margin Loan as of December 31, 2018.
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LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The following table presents the Company’s share of earnings (losses) of affiliates:
Braves Group
Other (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 78 9
Total Braves Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 78 9
(a) During the year ended December 31, 2017, an equity method affiliate of Braves Holdings sold a controlling interest
in a subsidiary, resulting in Braves Holdings recording its portion of the gain of $69 million.
SIRIUS XM Canada
On May 25, 2017, SIRIUS XM completed a recapitalization of Sirius XM Canada Holdings, Inc. (“SIRIUS XM
Canada”), which is now a privately held corporation.
As of December 31, 2018, SIRIUS XM held a 70% equity interest and 33% voting interest in SIRIUS XM
Canada, with the remainder of SIRIUS XM Canada’s voting and equity interests held by two shareholders. SIRIUS XM
Canada is accounted for as an equity method investment as SIRIUS XM does not have the ability to direct the most
significant activities that impact SIRIUS XM Canada’s economic performance. The total consideration from SIRIUS XM
to SIRIUS XM Canada, excluding transaction costs, during the year ended December 31, 2017 was $309 million, which
included $130 million in cash and SIRIUS XM issued 35 million shares of its common stock with an aggregate value of
$179 million to the holders of the shares of SIRIUS XM Canada acquired in the transaction.
SIRIUS XM also made a contribution in the form of a loan to SIRIUS XM Canada in the aggregate amount of
$131 million on May 25, 2017. The loan is denominated in Canadian dollars and is considered a long-term investment
with any unrealized gains or losses reported within Accumulated other comprehensive (loss) income. Such loan has a term
of fifteen years, bears interest at a rate of 7.62% per annum and includes customary covenants and events of default,
including an event of default relating to SIRIUS XM Canada’s failure to maintain specified leverage ratios. In addition,
the terms of the loan require SIRIUS XM Canada to prepay a portion of the outstanding principal amount of the loan within
sixty days of the end of each fiscal year in an amount equal to any cash on hand in excess of C$10 million at the last day
of the financial year if all target dividends have been paid in full.
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LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
SIRIUS XM also entered into a Services Agreement and an Advisory Services Agreement with SIRIUS XM
Canada. Each agreement has a thirty year term. Pursuant to the Services Agreement, SIRIUS XM Canada will pay
SIRIUS XM 25% of its gross revenue on a monthly basis through December 31, 2021 and 30% of its gross revenue on a
monthly basis thereafter. Pursuant to the Advisory Services Agreement, SIRIUS XM Canada will pay SIRIUS XM 5% of
its gross revenue on a monthly basis. These agreements supersede and replace the existing agreements between
SIRIUS XM Canada and its predecessors and SIRIUS XM.
SIRIUS XM has approximately $11 million and $10 million in related party current assets as of December 31,
2018 and 2017, respectively. As of December 31, 2018 and 2017, the related party current asset balance included amounts
due under the Service Agreement and Advisory Services Agreement and certain amounts due related to transactions outside
of the scope of the new services arrangements. At December 31, 2018 and 2017, SIRIUS XM has approximately $9 million
and $10 million in related party liabilities, respectively, related to the legacy agreements with SIRIUS XM Canada which
are recorded in current and noncurrent other liabilities in the Company’s consolidated balance sheets. SIRIUS XM recorded
approximately $97 million, $87 million and $46 million in revenue for the years ended December 31, 2018, 2017 and
2016, respectively, associated with these various agreements in the Other revenue line in the consolidated statements of
operations. SIRIUS XM Canada declared and paid dividends to SIRIUS XM of $2 million, $4 million and $8 million
during the years ended December 31, 2018, 2017 and 2016, respectively. These dividends were first recorded as a reduction
to SIRIUS XM’s investment balance in Sirius XM Canada to the extent a balance existed and then as Other income for the
remaining portion.
Goodwill
(a) On April 18, 2017, SIRIUS XM acquired Automatic Labs Inc., a connected vehicle device and mobile application
company, for an aggregate purchase price of approximately $108 million, net of cash and restricted cash acquired. The
excess purchase price over identifiable net assets of $82 million was recorded to goodwill.
(b) See note 5 for details regarding the Formula 1 acquisition.
Other intangible assets not subject to amortization, not separately disclosed, are tradenames ($931 million) at
December 31, 2018 and 2017 and franchise rights owned by Braves Holdings ($143 million) as of December 31, 2018 and
2017. We identified these assets as indefinite life intangible assets after considering the expected use of the assets, the
regulatory and economic environment within which they are used and the effects of obsolescence on their use.
SIRIUS XM’s Federal Communications Commission (“FCC”) licenses are currently scheduled to expire in 2021, 2022
and 2028. Prior to expiration, SIRIUS XM is required to apply for a renewal of its FCC licenses. The renewal and extension
F-66
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
of its licenses is reasonably certain at minimal cost, which is expensed as incurred. Each of the FCC licenses authorizes
SIRIUS XM to use the broadcast spectrum, which is a renewable, reusable resource that does not deplete or exhaust over
time.
The FIA Agreement is amortized over 35 years, customer relationships are amortized over 10-15 years and
licensing agreements are amortized over 15 years. Amortization expense was $654 million, $594 million and $168 million
for the years ended December 31, 2018, 2017 and 2016, respectively. Based on its amortizable intangible assets as of
December 31, 2018, Liberty expects that amortization expense will be as follows for the next five years (amounts in
millions):
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 669
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 640
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 477
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 416
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 388
F-67
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
(10) Debt
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LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
On October 17, 2013 Liberty issued $1 billion aggregate principal amount of 1.375% Cash Convertible Senior
Notes due 2023 (“Convertible Notes”). The Convertible Notes will mature on October 15, 2023 unless earlier repurchased
by us or converted. Interest on the Convertible Notes is payable semi-annually in arrears on April 15 and October 15 of
each year at a rate of 1.375% per annum. All conversion of the Convertible Notes will be settled solely in cash, and not
through the delivery of any securities. Prior to the Recapitalization, the conversion rate for the Convertible Notes was
21.0859 shares of Series A Liberty Media Corporation common stock per $1,000 principal amount of Convertible Notes
and an adjusted conversion price of $47.43 per share of Series A Liberty Media Corporation common stock.
As a result of the Recapitalization, as discussed in note 2, the Convertible Notes are convertible into cash based
on the Securities Basket. The supplemental indenture entered into on April 15, 2016 in connection with the Recapitalization
amends the conversion, adjustment and other provisions of the indenture to give effect to the Recapitalization and provides
that the conversion consideration due upon conversion of any Convertible Note shall be determined as if references in the
indenture to one share of Series A Liberty Media Corporation common stock were instead a reference to the Securities
Basket, initially consisting of 0.10 of a share of Series A Liberty Braves common stock, 1.0 share of Series A Liberty
SiriusXM common stock and 0.25 of a share of Series A Liberty Formula One common stock. The Series A Liberty Braves
common stock component of the Securities Basket was adjusted to 0.1087 pursuant to anti-dilution adjustments arising out
of the distribution of subscription rights to purchase shares of Series C Liberty Braves common stock made to all holders
of Liberty Braves common stock.
Holders of the Convertible Notes may convert their notes at their option at any time prior to the close of business
on the second business day immediately preceding the maturity date of the notes under certain circumstances. Liberty has
elected to account for this instrument using the fair value option. Accordingly, changes in the fair value of this instrument
are recognized as unrealized gains (losses) in the statements of operations. As of December 31, 2018, the Convertible
Notes are classified as a long term liability in the consolidated balance sheets, as the conversion conditions have not been
met as of such date.
Additionally, contemporaneously with the issuance of the Convertible Notes, Liberty entered into the Bond Hedge
Transaction. The Bond Hedge Transaction is expected to offset potential cash payments Liberty would be required to make
in excess of the principal amount of the Convertible Notes, upon conversion of the notes in the event that the volume-
weighted average price per share of the Series A Liberty Media Corporation common stock, as measured under the cash
convertible note hedge transactions on each trading day of the relevant cash settlement averaging period or other relevant
valuation period, was greater than the strike price of Series A Liberty Media Corporation common stock, which
corresponded to the conversion price of the Convertible Notes. In connection with the Recapitalization and the entry into
the supplemental indenture on April 15, 2016, Liberty entered into amendments to the Bond Hedge Transaction with each
of the counterparties to reflect the adjustments resulting from the Recapitalization. As of the effective date of the
Recapitalization, the Bond Hedge Transaction covered, in the aggregate, 5,271,475 shares of Series A Liberty Formula
One common stock, 21,085,900 shares of Series A Liberty SiriusXM common stock and 2,108,590 shares of Series A
Liberty Braves common stock, subject to anti-dilution adjustments pertaining to the Convertible Notes, which was equal
to the aggregate number of shares comprising the Securities Basket underlying the Convertible Notes at that time. The
aggregate number of shares of Series A Liberty Braves common stock relating to the Bond Hedge Transaction was
increased to 2,292,037, pursuant to anti-dilution adjustments arising out of the rights distribution (note 2). As of
December 31, 2018, the basket price of the securities underlying the Bond Hedge Transaction was $46.94 per share. The
bond hedge expires on October 15, 2023 and is included in other assets as of December 31, 2018 and 2017 in the
accompanying consolidated balance sheets, with changes in the fair value recorded as unrealized gains (losses) on financial
instruments, in the accompanying consolidated statements of operations.
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LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Concurrently with the Convertible Notes and Bond Hedge Transaction, Liberty also entered into separate privately
negotiated warrant transactions under which Liberty sold warrants relating to the same number of shares of common stock
as underlie the Bond Hedge Transaction, subject to anti-dilution adjustments (“Warrant Transactions”). The first expiration
date of the warrants is January 16, 2024 and expire over a period covering 81 days thereafter. Liberty may elect to settle
its delivery obligation under the warrant transactions with cash. In connection with the Recapitalization, Liberty entered
into amendments to the Warrant Transactions with each of the option counterparties to reflect the adjustments to the
Warrant Transactions resulting from the Recapitalization (“Amended Warrant Transactions”). As of the effective date of
the Recapitalization, the Amended Warrant Transactions covered, in the aggregate, 5,271,475 shares of Series A Liberty
Formula One common stock, 21,085,900 shares of Series A Liberty SiriusXM common stock and 2,108,590 shares of
Series A Liberty Braves common stock, subject to anti-dilution adjustments. The aggregate number of shares of Series A
Liberty Braves common stock relating to the Amended Warrant Transactions was increased to 2,292,037 pursuant to anti-
dilution adjustments arising out of the rights distribution. The strike price of the warrants was adjusted, as a result of the
Recapitalization and the rights offering, to $61.16 per share. As of December 31, 2018, the basket price of the securities
underlying the Amended Warrant Transactions was $46.94 per share. The Amended Warrant Transactions may have a
dilutive effect with respect to the shares comprising the Securities Basket underlying the warrants to the extent that the
settlement price exceeds the strike price of the warrants, and the warrants are settled in shares comprising such Securities
Basket.
In connection with the Second Closing on January 23, 2017, Liberty issued $450 million convertible cash notes
at an interest rate of 1% per annum, which are convertible, under certain circumstances, into cash based on the trading
prices of the underlying shares of Series C Liberty Formula One common stock and mature on January 30, 2023 (the ‘‘1%
Convertible Notes’’). The initial conversion rate for the notes will be 27.1091 shares of Series C Liberty Formula One
common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $36.89 per
share of Series C Liberty Formula One common stock. The conversion of the 1% Convertible Notes will be settled solely
in cash, and not through the delivery of any securities. As discussed in note 5, Liberty used a portion of the net proceeds
of the 1% Convertible Notes to fund an increase to the cash consideration payable to the selling shareholders of Formula 1
by approximately $400 million.
On August 17, 2016, Liberty closed a private offering of approximately $445 million aggregate principal amount
of its 2.25% exchangeable senior debentures due 2046 (the “2.25% Exchangeable Senior Debentures due 2046”), and
shares of the Company’s Time Warner common stock were the reference shares attributable to the debentures. On June 14,
2018, AT&T acquired Time Warner in a stock-and-cash transaction. In accordance with the terms of the indenture
governing the 2.25% Exchangeable Senior Debentures due 2046, the cash portion of the acquisition consideration was
paid on June 22, 2018 as an extraordinary additional distribution to holders of debentures, and the stock portion of the
acquisition consideration became reference shares attributable to the debentures. Also pursuant to the indenture, the
original principal amount of the 2.25% Exchangeable Senior Debentures due 2046 was reduced by an amount equal to the
extraordinary additional distribution of $229 million, calculated as $514.1295 per $1,000 original principal amount of
debentures. Additionally, any amount of excess regular quarterly cash dividends paid on the AT&T reference shares will
be distributed by the Company to holders of the debentures as an additional distribution.
Upon an exchange of debentures, Liberty, at its option, may deliver AT&T common stock, cash or a combination
of AT&T common stock and cash. The number of shares of AT&T common stock attributable to a debenture represents an
initial exchange price of approximately $35.35 per share. A total of approximately 6.11 million shares of AT&T common
stock are attributable to the debentures. Interest is payable quarterly on March 31, June 30, September 30 and December 31
of each year, commencing December 31, 2016. The debentures may be redeemed by Liberty, in whole or in part, on or
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LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
after October 5, 2021. Holders of the debentures also have the right to require Liberty to purchase their debentures on
October 5, 2021. The redemption and purchase price will generally equal 100% of the adjusted principal amount of the
debentures plus accrued and unpaid interest.
The debentures, as well as the associated cash proceeds, were attributed to the Formula One Group. Liberty used
the net proceeds of the offering for the acquisition of an investment in Formula 1 during September 2016, as further
described in note 5. Liberty has elected to account for the debentures using the fair value option. Accordingly, changes in
the fair value of these instruments are recognized as unrealized gains (losses) in the accompanying consolidated statements
of operations.
On March 6, 2018, Liberty closed a private offering of approximately $400 million aggregate principal amount
of its 2.125% exchangeable senior debentures due 2048 (the “2.125% Exchangeable Senior Debentures due 2048”). Upon
an exchange of debentures, Liberty, at its option, may deliver SIRIUS XM common stock, Series C Liberty SiriusXM
common stock, cash or a combination of SIRIUS XM common stock, Series C Liberty SiriusXM common stock and/or
cash. The number of shares of SIRIUS XM common stock attributable to a debenture represents an initial exchange price
of approximately $8.02 per share. A total of approximately 49.9 million shares of SIRIUS XM common stock are
attributable to the debentures. Interest is payable quarterly on March 31, June 30, September 30 and December 31 of each
year, commencing June 30, 2018. The debentures may be redeemed by Liberty, in whole or in part, on or after April 7,
2023. Holders of the debentures also have the right to require Liberty to purchase their debentures on April 7, 2023. The
redemption and purchase price will generally equal 100% of the adjusted principal amount of the debentures plus accrued
and unpaid interest. The debentures, as well as the associated cash proceeds, were attributed to the Liberty SiriusXM
Group. Liberty has elected to account for the debentures using the fair value option. Accordingly, changes in the fair value
of these instruments are recognized as unrealized gains (losses) in the accompanying consolidated statements of operations.
In December 2018, Liberty closed a private offering of approximately $385 million aggregate principal amount
of its 2.25% exchangeable senior debentures due 2048 (the “2.25% Exchangeable Senior Debentures due 2048”). Upon an
exchange of debentures, Liberty, at its option, may deliver Live Nation common stock, cash or a combination of Live
Nation common stock and cash. The number of shares of Live Nation common stock attributable to a debenture represents
an initial exchange price of approximately $66.28 per share. A total of approximately 5.8 million shares of Live Nation
common stock are attributable to the debentures. Interest is payable quarterly on March 1, June 1, September 1 and
December 1 of each year, commencing March 1, 2019. The debentures may be redeemed by Liberty, in whole or in part,
on or after December 1, 2021. Holders of the debentures also have the right to require Liberty to purchase their debentures
on December 1, 2021. The redemption and purchase price will generally equal 100% of the adjusted principal amount of
the debentures plus accrued and unpaid interest. The debentures, as well as the associated cash proceeds, were attributed
to the Formula One Group. Liberty used a portion of the net proceeds of the 2.25% Exchangeable Senior Debentures due
2048 to repay all amounts outstanding under the Live Nation Margin Loan. Liberty has elected to account for the
debentures using the fair value option. Accordingly, changes in the fair value of these instruments are recognized as
unrealized gains (losses) in the accompanying consolidated statements of operations.
Margin Loans
On April 30, 2013, Liberty Siri MarginCo, LLC, a wholly-owned subsidiary of Liberty, entered into a margin loan
agreement. Shares of common stock of certain of the Company’s equity affiliates and investments in debt and equity
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LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
securities were pledged as collateral pursuant to this agreement. During October 2014, Liberty refinanced this margin loan
arrangement for a similar financial instrument with a $250 million term loan and a $750 million undrawn line of credit.
Interest on the term loan was payable on the first business day of each calendar quarter, and interest was payable on the
revolving line of credit on the last day of the interest period applicable to the borrowing of which such loan is a part.
During October 2015, Liberty amended this margin loan arrangement for a similar financial instrument with a
$250 million term loan and a $1 billion undrawn line of credit. As of December 31, 2015, shares of SIRIUS XM and Live
Nation were pledged as collateral pursuant to this agreement. The term loan and any drawn portion of the revolver carried
an interest rate of LIBOR plus an applicable spread between 1.75% and 2.25% (based on the value of collateral) with the
undrawn portion carrying a fee of 0.75%. Other terms of the agreement were substantially similar to the previous
arrangement.
During October 2016, Liberty amended this margin loan arrangement for a similar financial instrument with a
$250 million term loan and a $500 million undrawn line of credit, which was scheduled to mature during October 2018.
The term loan and any drawn portion of the revolver carried an interest rate of LIBOR plus 1.75% with the undrawn portion
carrying a fee of 0.75%. Other terms of the agreement were substantially similar to the previous arrangement, except shares
of Live Nation common stock were no longer pledged as collateral. Borrowings outstanding under this margin loan bore
interest at a rate of 3.24% per annum at December 31, 2017. As of December 31, 2017, the Company had fully drawn
against the revolving line of credit and this margin loan was classified as current in the accompanying consolidated balance
sheet.
During March 2018, Liberty amended this margin loan agreement for a similar financial instrument with a $250
million term loan, $500 million revolving line of credit and a $600 million delayed draw term loan, which is scheduled to
mature during March 2020. The new term loan and any drawn portion of the revolver carries an interest rate of LIBOR
plus 2.05% with the undrawn portion carrying a fee of 0.75%. Other terms of the agreement were substantially similar to
the previous arrangement. Borrowings outstanding under this margin loan bore interest at a rate of 4.83% per annum at
December 31, 2018. As of December 31, 2018, availability under the $1.35 billion margin loan due 2020 was $750 million.
1,000 million shares of SIRIUS XM common stock held by Liberty with a value of $5,710 million were pledged as
collateral to the $1.35 billion margin loan due 2020 as of December 31, 2018. The margin loan contains various affirmative
and negative covenants that restrict the activities of the borrower. The margin loan does not include any financial covenants.
On November 8, 2016, LMC LYV, LLC, a wholly-owned subsidiary of Liberty, entered into a margin loan
agreement with an available borrowing capacity of $500 million with various financial institutions. This margin loan had
a two year term, bore interest at a rate of LIBOR plus 2.25% and contained an undrawn commitment fee of 0.75% per
annum. On January 20, 2017, LMC LYV, LLC drew $350 million under the margin loan, and the proceeds were used for
the Second Closing, as discussed in notes 2 and 5. On December 12, 2017, the margin loan agreement was amended,
extending the maturity date to December 12, 2019, and decreasing the interest rate to LIBOR plus 1.90% and the undrawn
commitment fee to 0.60% per annum. On December 10, 2018, the margin loan agreement was amended, increasing the
borrowing capacity to $600 million, extending the maturity date to December 10, 2020, decreasing the interest rate to
LIBOR plus 1.80% and increasing the undrawn commitment fee to either 0.75% or 0.85% per annum (based on the
undrawn amount). Interest on the margin loan is payable on the last business day of each calendar quarter. During
December 2018, Liberty paid all amounts outstanding under the Live Nation Margin Loan. As of December 31, 2018,
availability under the Live Nation Margin Loan was $600 million. 53.7 million shares of the Company’s Live Nation
common stock with a value of $2,647 million were pledged as collateral to the loan as of December 31, 2018. The margin
loan contains various affirmative and negative covenants that restrict the activities of the borrower. The loan agreement
does not include any financial covenants.
F-72
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
In May 2013, SIRIUS XM issued $500 million of Senior Notes due 2023 which bear interest at an annual rate of
4.625%. Interest on the notes is payable semi-annually in arrears on May 15 and November 15 of each year. Substantially
all of SIRIUS XM’s domestic wholly-owned subsidiaries guarantee SIRIUS XM’s obligations under the notes.
SIRIUS XM 3.875% Senior Notes Due 2022 and 5.00% Senior Notes Due 2027
In July 2017, SIRIUS XM issued $1.0 billion aggregate principal amount of 3.875% Senior Notes due 2022 (the
“3.875% Notes”) and $1.5 billion aggregate principal amount of 5.00% Senior Notes due 2027 (the “5.00% Notes”). For
both series of notes, interest is payable semi-annually in arrears on February 1 and August 1, commencing on February 1,
2018. The 3.875% Notes will mature on August 1, 2022 and the 5.00% Notes will mature on August 1, 2027. Substantially
all of SIRIUS XM’s domestic wholly-owned subsidiaries guarantee SIRIUS XM’s obligations under the notes.
In May 2014, SIRIUS XM issued $1.5 billion aggregate principal amount of 6% Senior Notes due 2024 (the “6%
Notes”). Interest is payable semi-annually in arrears on January 15 and July 15 of each year at a rate of 6% per annum.
The 6% Notes will mature on July 15, 2024. Substantially all of SIRIUS XM’s domestic wholly-owned subsidiaries
guarantee SIRIUS XM’s obligations under the notes.
In March 2015, SIRIUS XM issued $1.0 billion principal amount of new senior notes due 2025 which bear interest
at an annual rate 5.375% (“SIRIUS XM 5.375% Senior Notes due 2025”). The SIRIUS XM 5.375% Senior Notes due
2025 are recorded net of the remaining unamortized discount. Substantially all of SIRIUS XM’s domestic wholly-owned
subsidiaries guarantee SIRIUS XM’s obligations under the notes.
In May 2016, SIRIUS XM issued $1.0 billion principal amount of new senior notes due July 2026 which bear
interest at an annual rate 5.375% (“SIRIUS XM 5.375% Senior Notes due 2026”). The SIRIUS XM 5.375% Senior Notes
due 2026 are recorded net of the remaining unamortized discount. Substantially all of SIRIUS XM’s domestic wholly-
owned subsidiaries guarantee SIRIUS XM’s obligations under the notes.
SIRIUS XM entered into a Senior Secured Revolving Credit Facility (the “Credit Facility”) with a syndicate of
financial institutions with a total borrowing capacity of $1,750 million which matures in June 2023. The Credit Facility is
guaranteed by certain of SIRIUS XM’s material domestic subsidiaries and is secured by a lien on substantially all of
SIRIUS XM’s assets and the assets of its material domestic subsidiaries. The proceeds of loans under the Credit Facility
are used for working capital and other general corporate purposes, including financing acquisitions, share repurchases and
dividends. Interest on borrowings is payable on a monthly basis and accrues at a rate based on LIBOR plus an applicable
rate. Borrowings outstanding under the Credit Facility as of December 31, 2018 bore interest at a rate of 4.67% per annum.
SIRIUS XM is required to pay a variable fee on the average daily unused portion of the Credit Facility which was 0.25%
F-73
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
as of December 31, 2018 and is payable on a quarterly basis. The Credit Facility contains customary covenants, including
a maintenance covenant. As of December 31, 2018, availability under the Credit Facility was $1,311 million.
In 2014, Braves Holdings, through a wholly-owned subsidiary, purchased 82 acres of land for the purpose of
constructing a Major League Baseball facility and development of a mixed-use complex adjacent to the ballpark. The total
cost of the ballpark was approximately $722 million, of which approximately $392 million was funded by a combination
of Cobb County, the Cumberland Improvement District and Cobb-Marietta Coliseum and Exhibit Hall Authority (the
“Authority”) and approximately $330 million was funded by Braves Holdings. Funding for ballpark initiatives by Braves
Holdings came from cash on hand and various debt instruments, as detailed above.
Bank Loans
Formula 1 had a first lien term loan denominated in Euros totaling $42 million, which was repaid on June 30,
2017. On August 3, 2017, Formula 1 increased the amount outstanding under a first lien term loan denominated in U.S.
Dollars (the “Senior Loan Facility”) from $3.1 billion to $3.3 billion and extended its maturity to February 2024. In
addition, on August 3, 2017, the revolving credit facility under the Senior Loan Facility was increased from $75 million to
$500 million. As part of a refinancing of the Senior Loan Facility in March 2017, $628 million of the Senior Loan Facility
was considered repaid and then borrowed due to a change in the mix of counterparties in the Senior Loan Facility. As part
of the refinancing in March 2017, the interest rate on the Senior Loan Facility was reduced from LIBOR plus 3.75% per
annum to LIBOR plus 3.25% per annum, with a LIBOR floor on the U.S. Dollar denominated debt of 1%. In
September 2017, the interest rate on the Senior Loan Facility was reduced to LIBOR plus 3.0% per annum.
On January 31, 2018, Formula 1 refinanced the Senior Loan Facility. As part of the refinancing, Formula 1 repaid
$400 million of the Senior Loan Facility, reducing the amount outstanding to $2.9 billion. The repayment was funded
through borrowings of $250 million under the revolving credit facility and $150 million of cash on hand. The interest rate
on the Senior Loan Facility was reduced to LIBOR plus 2.5% per annum. Formula 1 repaid all outstanding borrowings
under the revolving credit facility during the year ended December 31, 2018. The interest rate on the Senior Loan Facility
was approximately 4.74% as of December 31, 2018. The Senior Loan Facility is secured by share pledges, bank accounts
F-74
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
and floating charges over Formula 1’s primary operating companies with certain cross guarantees. Additionally, as of
December 31, 2018, Formula 1 has interest rate swaps on $2.5 billion of the $2.9 billion Senior Loan Facility in order to
manage its interest rate risk.
Formula 1 also had a second lien facility, which had $1 billion outstanding at the time of the acquisition of
Formula 1 by Liberty. In May 2017, Liberty issued 12.9 million shares of Series C Liberty Formula One common stock
and used the net proceeds of approximately $388 million to repay a portion of the second lien facility. Formula 1 fully
repaid the second lien facility during the year ended December 31, 2017.
As discussed in note 5, in connection with the Second Closing on January 23, 2017, Delta Topco issued the
Exchangeable Notes upon the conversion of certain outstanding Delta Topco loan notes. The Exchangeable Notes bore
interest at 2% per annum and were exchangeable into cash or newly issued shares of Series C Liberty Formula One
common stock. Interest was payable by either, at the discretion of Delta Topco, (i) issuing payment-in-kind notes or
(ii) cash. In September 2017, $323 million aggregate principal amount of Exchangeable Notes were exchanged for
14.5 million shares of Series C Liberty Formula One common stock. In November 2017, the remaining $27 million
aggregate principal amount of Exchangeable Notes were exchanged for 1.2 million shares of Series C Liberty Formula
One common stock.
The Exchangeable Notes were attributed to the Formula One Group. The debt host component of the
Exchangeable Notes was recorded as debt, at fair value (level 2), with the related discount amortized using the effective
interest rate method, while the embedded conversion option was recorded in additional paid-in capital. Upon settlement,
the Company recorded a true-up to additional paid-in capital for the amount and type (shares of Series C Liberty Formula
One common stock) of settlement.
Debt Covenants
The SIRIUS XM Credit Facility contains certain financial covenants related to SIRIUS XM’s leverage ratio.
Braves Holdings’ term loan contains certain financial covenants related to Braves Holdings’ debt service coverage ratio,
fixed charge ratio and capital expenditures. Additionally, SIRIUS XM’s Credit Facility, the Braves Holdings term loan,
Formula 1 debt and other borrowings contain certain non-financial covenants. As of December 31, 2018, the Company,
SIRIUS XM, Formula 1 and Braves Holdings were in compliance with all debt covenants.
F-75
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The fair value, based on quoted market prices of the same instruments but not considered to be active markets
(Level 2), of SIRIUS XM’s publicly traded debt securities is as follows (amounts in millions):
December 31,
2018
SIRIUS XM 3.875% Senior Notes due 2022 . . . . . . . . . . . . $ 948
SIRIUS XM 4.625% Senior Notes due 2023 . . . . . . . . . . . . $ 476
SIRIUS XM 6% Senior Notes due 2024 . . . . . . . . . . . . . . . $ 1,504
SIRIUS XM 5.375% Senior Notes due 2025 . . . . . . . . . . . . $ 956
SIRIUS XM 5.375% Senior Notes due 2026 . . . . . . . . . . . . $ 941
SIRIUS XM 5.0% Senior Notes due 2027 . . . . . . . . . . . . . . $ 1,363
Due to the variable rate nature of the Credit Facility, margin loans and other debt, the Company believes that the
carrying amount approximates fair value at December 31, 2018.
The annual principal maturities of outstanding debt obligations for each of the next five years is as follows
(amounts in millions):
2019 ............................................ $ 24
2020 ............................................ $ 703
2021 ............................................ $ 65
2022 ............................................ $ 1,018
2023 ............................................ $ 2,407
On December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act made broad and complex changes
to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21
percent; (2) bonus depreciation that allows for full expensing of qualified property; (3) creating a new limitation on
deductible interest expense; (4) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing
AMT credits can be realized; (5) changing rules related to uses and limitations of net operating loss carryforwards created
in tax years beginning after December 31, 2017; (6) limitations on the deductibility of certain executive compensation;
and (7) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over
eight years. The SEC issued guidance on accounting for the tax effects of the Tax Act. The Company reflected the income
tax effects of those aspects of the Tax Act for which the accounting was known as of December 31, 2017 and made
immaterial revisions to such amounts during the allowed one year measurement period. As of December 31, 2018, the
Company has completed its analysis of the tax effects of the Tax Act.
F-76
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of
21% for the year ended December 31, 2018 and 35% for both of the years ended December 31, 2017 and 2016 as a result
of the following:
For the year ended December 31, 2018, the significant reconciling items, as noted in the table above, are
deductible stock-based compensation, benefits related to federal tax credits and the resolution of historical matters with
various tax authorities, partially offset by changes in the valuation allowance and taxable dividends not recognized for
book purposes.
For the year ended December 31, 2017, the significant reconciling items, as noted in the table above, are a net tax
benefit for the effect of the changes in the U.S. federal corporate tax rate from 35% to 21% on deferred taxes, a net tax
F-77
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
benefit for the resolution of historical matters with various tax authorities and a net tax benefit for the effects of a new U.K.
tax law that changed the Company’s judgment with respect to the future realization of U.K. tax losses.
For the year ended December 31, 2016 the significant reconciling item, as noted in the table above, is state income
taxes offset with federal income tax credits claimed by SIRIUS XM related to research and development activities.
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and
deferred income tax liabilities are presented below:
December 31,
2018 2017
amounts in millions
Deferred tax assets:
Tax loss and credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,355 1,017
Accrued stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 88
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 175
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 502
Discount on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 26
Other future deductible amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 22
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,988 1,830
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (174) (112)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,814 1,718
Deferred tax liabilities:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 110
Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359 326
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,690 2,760
Discount on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 —
Other future taxable amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 —
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,465 3,196
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,651 1,478
SIRIUS XM’s deferred tax assets and liabilities are included in the amounts above although SIRIUS XM’s
deferred tax assets and liabilities are not offset with Liberty’s deferred tax assets and liabilities as SIRIUS XM is not
included in the consolidated group tax return of Liberty. Liberty’s acquisition of a controlling interest in SIRIUS XM’s
outstanding common stock during January 2013 did not cause a change in control under Section 382 of the Code.
During the year ended December 31, 2018, there was a $62 million increase in the Company’s valuation
allowance that affected tax expense.
At December 31, 2018, the Company had a deferred tax asset of $1,355 million for federal, state and foreign net
operating losses (“NOLs”), interest expense carryforwards and tax credit carryforwards. Of this amount, $952 million is
recorded at the SIRIUS XM level. If not utilized to reduce income tax liabilities at SIRIUS XM in future periods, these
loss carryforwards and tax credits will expire on various dates through 2038. The Company has $243 million of foreign
NOLS that may be carried forward indefinitely and $4 million of foreign NOLs that will expire on various dates starting
in 2035. In addition, the Company has $153 million of loss and credit carryforwards with no expiration. The remaining $3
million of carryforwards expire at certain future dates. These carryforwards are expected to be utilized in future periods,
except for $174 million of tax loss and credit carryforwards which, based on current projections, may expire unused in the
future and are subject to a valuation allowance.
F-78
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
December 31,
2018 2017 2016
amounts in millions
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . $ 365 304 254
Reductions for tax positions of prior years . . . . . . . . . . . (27) (1) (1)
Increase in tax positions for current year . . . . . . . . . . . . . 15 16 51
Increase in tax positions from prior years . . . . . . . . . . . . 65 37 —
Settlements with tax authorities . . . . . . . . . . . . . . . . . . . . (31) (423) —
Increase in tax positions from acquisition . . . . . . . . . . . . — 432 —
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 387 365 304
As of December 31, 2018, the Company had recorded tax reserves of $387 million related to unrecognized tax
benefits for uncertain tax positions. If such tax benefits were to be recognized for financial statement purposes,
approximately $257 million dollars would be reflected in the Company’s tax expense and affect its effective tax rate. We
do not currently anticipate that our existing reserves related to uncertain tax positions as of December 31, 2018 will
significantly increase or decrease during the twelve-month period ending December 31, 2019; however, various events
could cause our current expectations to change in the future. The Company’s estimate of its unrecognized tax benefits
related to uncertain tax positions requires a high degree of judgment.
As of December 31, 2018, the Company’s tax years prior to 2015 are closed for federal income tax purposes, and
the IRS has completed its examination of the Company’s 2015 and 2016 tax years. The Company’s tax loss carryforwards
from its 2014 tax year are still subject to adjustment. The Company’s 2017 and 2018 tax years are being examined currently
as part of the IRS’s Compliance Assurance Process program. Various states are currently examining the Company’s prior
years state income tax returns. SIRIUS XM, which does not consolidate with Liberty for income tax purposes, has certain
state income tax audits pending. We do not expect the ultimate disposition of these audits to have a material adverse effect
on our financial position or results of operations.
As of December 31, 2018, the Company had less than $1 million dollars in accrued interest and penalties recorded
related to uncertain tax positions.
Preferred Stock
Liberty’s preferred stock is issuable, from time to time, with such designations, preferences and relative
participating, optional or other rights, qualifications, limitations or restrictions thereof, as shall be stated and expressed in
a resolution or resolutions providing for the issue of such preferred stock adopted by Liberty’s board of directors. As of
December 31, 2018, no shares of preferred stock were issued.
Common Stock
As discussed in note 2, on April 15, 2016, the Company completed the Recapitalization of its common stock into
three new tracking stock groups, one designated as the Liberty SiriusXM common stock, one designated as the Liberty
Braves common stock and one designated as the Liberty Media common stock. As further discussed in note 2, the Liberty
Media common stock was renamed Liberty Formula One common stock on January 24, 2017 shortly after the Second
F-79
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Closing. The operating results prior to the Recapitalization are attributed to Liberty stockholders in the aggregate, and the
operating results subsequent to the Recapitalization are attributed to the respective tracking stock groups.
As discussed in note 1, on July 23, 2014, holders of Series A and Series B Liberty Media Corporation common
stock received a dividend of two shares of Series C Liberty Media Corporation common stock for each share of Series A
or Series B Liberty Media Corporation common stock held by them as of July 7, 2014.
Series A Liberty SiriusXM, Liberty Braves and Liberty Formula One common stock have one vote per share,
Series B Liberty SiriusXM, Liberty Braves and Liberty Formula One common stock have ten votes per share and Series C
Liberty SiriusXM, Liberty Braves and Liberty Formula One common stock have no votes per share except as otherwise
required by Delaware law. Each share of Series B common stock is exchangeable at the option of the holder for one share
of Series A common stock of the same group. All series of our common stock participate on an equal basis with respect to
dividends and distributions.
There were no repurchases of Liberty common stock made pursuant to the Company’s authorized repurchase
program during the years ended December 31, 2016 and 2017.
During the year ended December 31, 2018, the Company repurchased 10.8 million shares of Series C Liberty
SiriusXM common stock for aggregate cash consideration of $466 million under the authorized repurchase program. All
of the foregoing shares obtained have been retired and returned to the status of authorized and available for issuance. There
were no repurchases of Series A Liberty SiriusXM common stock, Liberty Braves common stock or Liberty Formula One
common stock and no repurchases of Series C Liberty Braves common stock or Liberty Formula One common stock
during the year ended December 31, 2018.
On October 26, 2016, SIRIUS XM’S board of directors declared the first quarterly dividend on SIRIUS XM
common stock in the amount of $0.01 per share of common stock to stockholders of record on November 9, 2016. The
dividend was paid in cash on November 30, 2016 in the amount of $48 million, of which Liberty received $32 million.
During the year ended December 31, 2017, SIRIUS XM declared a cash dividend each quarter, and paid in cash
an aggregate amount of $190 million, of which Liberty received $130 million.
During the year ended December 31, 2018, SIRIUS XM declared a cash dividend each quarter, and paid in cash
an aggregate amount of $201 million, of which Liberty received $143 million. SIRIUS XM’s board of directors expects to
declare regular quarterly dividends, in an aggregate annual amount of $0.0484 per share of common stock. On January 29,
2019, SIRIUS XM’s board of directors declared a quarterly dividend on its common stock in the amount of $0.0121 per
share of common stock, payable on February 28, 2019 to stockholders of record at the close of business on February 11,
2019.
In December 2014, the Compensation Committee (the “Committee”) of Liberty approved a compensation
arrangement, including term options as discussed in note 14, for its President and Chief Executive Officer (the “CEO”).
F-80
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The arrangement provides for a five year employment term which began on January 1, 2015 and ends December 31, 2019,
with an annual base salary of $960,750, increasing annually by 5% of the prior year’s base salary, and an annual target
cash bonus equal to 250% of the applicable year’s annual base salary. The arrangement also provides that, in the event the
CEO is terminated for “cause,” he will be entitled only to his accrued base salary and any amounts due under applicable
law and he will forfeit all rights to his unvested term options. If, however, the CEO is terminated by Liberty without cause
or if he terminates his employment for “good reason,” he will be entitled to his accrued base salary, his accrued but unpaid
bonus and any amounts due under applicable law, a severance payment of 1.5 times his base salary during the year of his
termination, a payment equal to $11,750,000 pro rated based upon the elapsed number of days in the calendar year of
termination, a payment equal to $17.5 million, and his unvested term options will generally vest pro rata based on the
portion of the term elapsed through the termination date plus 18 months and for all vested and accelerated options to remain
exercisable until their respective expiration dates. If, however, the CEO terminates his employment without “good reason,”
he will be entitled to his accrued base salary, his accrued but unpaid bonus and any amounts due under applicable law, a
payment equal to $11,750,000 pro rated based upon the elapsed number of days in the calendar year of termination, and
for his unvested term options to generally vest pro rata based on the portion of the term elapsed through the termination
date and all vested and accelerated options to remain exercisable until their respective expiration dates. Lastly, in the case
of the CEO’s death or his disability, he is entitled to his accrued base salary, his accrued but unpaid bonus and any amounts
due under applicable law, a payment of 1.5 times his base salary during the year of his termination, a payment equal to
$11,750,000 pro rated based upon the elapsed number of days in the calendar year of termination, a payment equal to
$17.5 million, and for his unvested term options to fully vest and for his vested and accelerated term options to remain
exercisable until their respective expiration dates.
Beginning in 2015, the CEO receives annual grants of options to purchase shares of Series C Liberty SiriusXM
common stock, Series C Liberty Braves common stock and Series C Liberty Formula One common stock with a term of
seven years (the “Annual Options”) and RSUs with respect to Series C Liberty SiriusXM common stock, Series C Liberty
Braves common stock and Series C Liberty Formula One common stock (the “Annual RSUs” and together with the Annual
Options, the “Annual Awards”). The CEO may elect the portions of his Annual Awards that he desires to be issued in the
form of Annual RSUs and Annual Options. Grants of Annual Awards will be allocated between Liberty and Qurate Retail.
The aggregate target amount to be allocated between Liberty and Qurate Retail will be $16 million with respect to calendar
year 2015, $17 million with respect to calendar year 2016, $18 million with respect to calendar year 2017, $19 million
with respect to calendar year 2018 and $20 million with respect to calendar year 2019. In addition, Liberty and Qurate
Retail’s compensation committees may grant additional awards each year up to a maximum of 50% of the target award for
the relevant year.
Salary compensation related to services provided by the CEO is charged from Liberty to Liberty TripAdvisor,
Liberty Broadband and GCI Liberty pursuant to the Services Agreements with each respective company. Any cash bonus
attributable to the performance of Liberty or Qurate Retail is paid directly by each respective company.
On December 12, 2008, the Committee determined to modify its employment arrangements with its Chairman of
the Board, to permit the Chairman to begin receiving payments in 2009 in satisfaction of Liberty’s obligations to him under
two deferred compensation plans and a salary continuation plan. Under one of the deferred compensation plans (the “8%
Plan”), compensation has been deferred by the Chairman since January 1, 1993 and accrues interest at the rate of 8% per
annum compounded annually from the applicable date of deferral. The amount owed to the Chairman under the 8% Plan
aggregated approximately $2.4 million at December 31, 2008. Under the second plan (the “13% Plan”), compensation was
deferred by the Chairman from 1982 until December 31, 1992 and accrues interest at the rate of 13% per annum
compounded annually from the applicable date of deferral. The amount owed to the Chairman under the 13% Plan
aggregated approximately $20 million at December 31, 2008. Both deferred compensation plans had provided for payment
of the amounts owed to him in 240 monthly installments beginning upon termination of his employment. Under his salary
F-81
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
continuation plan, the Chairman would have been entitled to receive $15,000 (increased at the rate of 12% per annum
compounded annually from January 1, 1998 to the date of the first payment, (the “Base Amount”) per month for 240
months beginning upon termination of his employment. The amount owed to the Chairman under the salary continuation
plan aggregated approximately $39 million at December 31, 2008. There is no further accrual of interest under the salary
continuation plan once payments have begun.
The Committee determined to modify all three plans and began making payments to the Chairman in 2009, while
he remains employed by the Company. By commencing payments under the salary continuation plan, interest ceased to
accrue on the Base Amount. As a result of these modifications, the Chairman will receive 240 equal monthly installments
as follows: (1) approximately $20,000 under the 8% Plan; (2) approximately $237,000 under the 13% Plan; and
(3) approximately $164,000 under the salary continuation plan.
The Committee also approved certain immaterial amendments to the Chairman’s employment agreement intended
to comply with Section 409A of the Internal Revenue Code.
Liberty—Incentive Plans
Pursuant to the Liberty Media Corporation 2017 Omnibus Incentive Plan (the “2017 Plan”), the company may
grant Awards to purchase shares of Series A, Series B and Series C Liberty Media Corporation common stock. The 2017
Plan provides for Awards to be made in respect of a maximum of 50.0 million shares of Liberty Media Corporation
common stock. Awards generally vest over 1-5 years and have a term of 7-10 years. Liberty issues new shares upon exercise
of equity awards. The Company measures the cost of employee services received in exchange for an equity classified
Award (such as stock options and restricted stock) based on the grant-date fair value (“GDFV”) of the Award, and
recognizes that cost over the period during which the employee is required to provide service (usually the vesting period
of the Award).
In connection with the Recapitalization during 2016, all outstanding Awards with respect to Liberty Media
Corporation common stock (“Liberty Awards”) were adjusted pursuant to the anti-dilution provisions of the incentive plans
under which the equity awards were granted, such that a holder of a Liberty Award received new corresponding equity
awards relating to shares of one or more series of Liberty SiriusXM common stock, Liberty Braves common stock and
Liberty Formula One common stock (collectively, the “Adjusted Liberty Awards”).
All of the pre-Recapitalization value of the Liberty Awards was allocated among the Adjusted Liberty Awards.
F-82
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
(1) Mainly vests between three and five years for employees and in one year for directors.
(2) Grant mainly cliff vested in December 2016 and was made in connection with the CEO’s employment agreement.
(3) Grants in 2017 mainly cliff vested in December 2017. Grants in 2018 cliff vested in December 2018 and were made
in connection with the CEO’s employment agreement.
(4) Vest monthly over one year.
In addition to the stock option grants to the Liberty CEO, and in connection with his employment agreement,
Liberty granted performance-based restricted stock units (“RSUs”). During the years ended December 31, 2018 and 2017,
Liberty granted 86 thousand and 50 thousand RSUs, respectively, of Series C Liberty Formula One common stock. Such
RSUs had a GDFV of $31.99 per share and $33.92 per share, respectively. During the year ended December 31, 2018,
Liberty granted 12 thousand RSUs of Series C Liberty Braves common stock with a GDFV of $23.34 per share. During
the year ended December 31, 2016, Liberty granted 39 thousand RSUs of Series C Liberty Media Corporation common
stock. Such RSUs had a GDFV of $37.76 per share. The 2018, 2017 and 2016 performance-based RSUs cliff vested in one
year, subject to the satisfaction of certain performance objectives and based on an amount determined by the compensation
committee. Performance objectives, which are subjective, are considered in determining the timing and amount of the
compensation expense recognized. As the satisfaction of the performance objectives becomes probable, the Company
records compensation expense. The value of the grant is remeasured at each reporting period.
The Company did not grant any options to purchase Series A or Series B of Liberty SiriusXM, Liberty Braves or
Liberty Formula One common stock during the year ended December 31, 2018.
F-83
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The Company has calculated the GDFV for all of its equity classified awards using the Black-Scholes Model.
The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. For grants made
in 2018, 2017 and 2016, the range of expected terms was 3.5 to 6.3 years. The volatility used in the calculation for Awards
is based on the historical volatility of Liberty’s stocks and the implied volatility of publicly traded Liberty options. The
Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject
options.
The following table presents the volatilities used by the Company in the Black-Scholes Model for the 2018, 2017
and 2016 grants.
Volatility
2018 grants
Liberty options . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.5 % - 26.0 %
2017 grants
Liberty options . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.6 % - 29.8 %
2016 grants
Liberty options . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.6 % - 26.8 %
Liberty—Outstanding Awards
The following tables present the number and weighted average exercise price (“WAEP”) of Awards to purchase
Liberty common stock granted to certain officers, employees and directors of the Company, as well as the weighted average
remaining life and aggregate intrinsic value of the Awards.
Liberty SiriusXM
Series A
Weighted Aggregate
average intrinsic
Liberty remaining value
Awards (000's) WAEP life (in millions)
Outstanding at January 1, 2018 . . . . . . . . . . . . . . . . . . . . . 1,626 $ 19.78
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — $ —
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (223) $ 19.43
Forfeited/Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — $ —
Outstanding at December 31, 2018 . . . . . . . . . . . . . . . . . . 1,403 $ 19.84 1.0 year $ 24
Exercisable at December 31, 2018 . . . . . . . . . . . . . . . . . . 1,399 $ 19.81 1.0 year $ 24
F-84
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Series C
Weighted Aggregate
average intrinsic
Liberty remaining value
Awards (000's) WAEP life (in millions)
Outstanding at January 1, 2018 . . . . . . . . . . . . . . . . . 11,328 $ 27.66
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666 $ 42.34
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (497) $ 19.81
Forfeited/Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . (2) $ 38.77
Outstanding at December 31, 2018. . . . . . . . . . . . . . 11,495 $ 28.85 3.3 years $ 98
Exercisable at December 31, 2018 . . . . . . . . . . . . . . 8,039 $ 28.25 3.1 years $ 74
Series A
Weighted Aggregate
average intrinsic
Liberty remaining value
Awards (000's) WAEP life (in millions)
Outstanding at January 1, 2018 . . . . . . . . . . . . . . . . 400 $ 11.69
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — $ —
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40) $ 11.50
Forfeited/Cancelled . . . . . . . . . . . . . . . . . . . . . . . . — $ —
Outstanding at December 31, 2018 . . . . . . . . . . . . . 360 $ 11.71 1.0 year $ 6
Exercisable at December 31, 2018 . . . . . . . . . . . . . 360 $ 11.70 1.0 year $ 6
Series C
Weighted Aggregate
average intrinsic
Liberty remaining value
Awards (000's) WAEP life (in millions)
Outstanding at January 1, 2018 . . . . . . . . . . . . . . . 4,760 $ 24.59
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,048 $ 31.55
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (123) $ 13.83
Forfeited/Cancelled . . . . . . . . . . . . . . . . . . . . . . . (1) $ 34.84
Outstanding at December 31, 2018 . . . . . . . . . . . . 6,684 $ 26.92 4.7 years $ 35
Exercisable at December 31, 2018 . . . . . . . . . . . . 4,911 $ 27.58 4.6 years $ 24
F-85
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Liberty Braves
Series A
Weighted Aggregate
average intrinsic
Liberty remaining value
Awards (000's) WAEP life (in millions)
Outstanding at January 1, 2018 . . . . . . . . . . . . . . . . . 179 $ 11.43
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — $ —
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) $ 11.00
Forfeited/Cancelled. . . . . . . . . . . . . . . . . . . . . . . . . . — $ —
Outstanding at December 31, 2018 . . . . . . . . . . . . . . 177 $ 11.44 1.0 year $ 2
Exercisable at December 31, 2018 . . . . . . . . . . . . . . . 177 $ 11.42 1.0 year $ 2
Series C
Weighted Aggregate
average intrinsic
Liberty remaining value
Awards (000's) WAEP life (in millions)
Outstanding at January 1, 2018 . . . . . . . . . . . . . . . . 1,231 $ 16.27
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 $ 23.54
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) $ 11.97
Forfeited/Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . — $ —
Outstanding at December 31, 2018 . . . . . . . . . . . . . 1,276 $ 16.58 3.2 years $ 11
Exercisable at December 31, 2018 . . . . . . . . . . . . . . 926 $ 16.33 3.0 years $ 8
There were no outstanding Series B options to purchase shares of Series B Liberty SiriusXM common stock,
Liberty Formula One common stock or Liberty Braves common stock during 2018.
As of December 31, 2018, the total unrecognized compensation cost related to unvested Liberty Awards was
approximately $22 million. Such amount will be recognized in the Company’s consolidated statements of operations over
a weighted average period of approximately 1.3 years.
As of December 31, 2018, 12.9 million, 7.0 million and 1.5 million shares of Series A and Series C Liberty
SiriusXM, Liberty Formula One and Liberty Braves common stock, respectively, were reserved for issuance under exercise
privileges of outstanding stock Awards.
Liberty—Exercises
The aggregate intrinsic value of all options exercised during the years ended December 31, 2018, 2017 and 2016
was $22 million, $31 million and $24 million, respectively.
F-86
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Liberty—Restricted Stock
The Company had approximately 218 thousand, 211 thousand and 46 thousand unvested restricted shares of
Liberty SiriusXM, Liberty Formula One, and Liberty Braves common stock, respectively, held by certain directors, officers
and employees of the Company as of December 31, 2018. These Series A and Series C unvested restricted shares of Liberty
SiriusXM common stock, Liberty Formula One common stock and Liberty Braves common stock had a weighted average
GDFV of $26.74, $28.79, and $20.16 per share, respectively.
The aggregate fair value of all restricted shares of Liberty common stock that vested during the years ended
December 31, 2018, 2017 and 2016 was $9 million, $85 million and $7 million, respectively.
During the years ended December 31, 2018, 2017 and 2016, SIRIUS XM granted various types of stock awards
to its employees and members of its board of directors. Stock-based awards are generally subject to a graded vesting
requirement, which is generally three to four years from the grant date. Stock options generally expire ten years from the
date of grant. Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are
subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the
third anniversary of the grant date. SIRIUS XM calculates the grant-date fair value for all of its equity classified awards
and any subsequent remeasurement of its liability classified awards using the Black-Scholes Model. The weighted average
volatility applied to the fair value determination of SIRIUS XM’s option grants during 2018, 2017 and 2016 was 23%,
24% and 22%, respectively. During the year ended December 31, 2018, SIRIUS XM granted approximately 31.7 million
stock options with a weighted-average exercise price of $6.59 per share and a grant date fair value of $1.45 per share. As
of December 31, 2018, SIRIUS XM has approximately 243.4 million options outstanding of which approximately
143.8 million are exercisable, each with a weighted-average exercise price per share of $4.22 and $3.60, respectively. The
aggregate intrinsic value of these outstanding and exercisable options was $392 million and $303 million, respectively.
During the year ended December 31, 2018, SIRIUS XM granted approximately 17.5 million RSUs and PRSUs with a
grant date fair value of $6.40 per share. The stock-based compensation related to SIRIUS XM stock options and restricted
stock awards was $133 million, $124 million and $109 million for the years ended December 31, 2018, 2017, and 2016,
respectively. As of December 31, 2018, the total unrecognized compensation cost related to unvested SIRIUS XM stock
options was $254 million. The SIRIUS XM unrecognized compensation cost will be recognized in the Company’s
consolidated statements of operations over a weighted average period of approximately 1.8 years.
Liberty is the sponsor of the Liberty Media 401(k) Savings Plan (the “Liberty 401(k) Plan”), which provides its
employees and the employees of certain of its subsidiaries an opportunity for ownership in the Company and creates a
retirement fund. The Liberty 401(k) Plan provides for employees to make contributions to a trust for investment in Liberty
common stock, as well as several mutual funds. The Company and its subsidiaries make matching contributions to the
Liberty 401(k) Plan based on a percentage of the amount contributed by employees. In addition, certain of the Company’s
subsidiaries have similar employee benefit plans. Employer cash contributions to all plans aggregated $20 million,
$17 million and $13 million for each of the years ended December 31, 2018, 2017 and 2016, respectively.
Accumulated other comprehensive earnings (loss) included in Liberty’s consolidated balance sheets and
consolidated statements of equity reflect the aggregate of foreign currency translation adjustments, unrealized holding
gains and losses on debt and equity securities and Liberty’s share of accumulated other comprehensive earnings of
affiliates.
F-87
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The change in the components of accumulated other comprehensive earnings (loss), net of taxes (“AOCI”), is
summarized as follows:
Unrealized Foreign
holding currency
gains (losses) translation
on securities adjustment Other AOCI
amounts in millions
Balance at January 1, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (10) (23) (18) (51)
Other comprehensive earnings (loss) attributable to Liberty
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 (13) (11)
Balance at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) (22) (31) (62)
Other comprehensive earnings (loss) attributable to Liberty
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) 16 14 27
Balance at December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12) (6) (17) (35)
Other comprehensive earnings (loss) attributable to Liberty
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (24) 22 (5)
Cumulative adjustment for change in accounting principle . . . . . . . . . . — — 2 2
Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (15) (30) 7 (38)
The components of other comprehensive earnings (loss) are reflected in Liberty’s consolidated statements of
comprehensive earnings (loss) net of taxes. The following table summarizes the tax effects related to each component of
other comprehensive earnings (loss).
Tax
Before-tax (expense) Net-of-tax
amount benefit amount
amounts in millions
Year ended December 31, 2018:
Unrealized holding gains (losses) arising during period. . . . . . . . . . . . . . . . . . . . . . . . . $ (4) 1 (3)
Credit risk on fair value debt instruments gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . 41 (9) 32
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56) 12 (44)
Other comprehensive earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (19) 4 (15)
Year ended December 31, 2017:
Unrealized holding gains (losses) arising during period. . . . . . . . . . . . . . . . . . . . . . . . . $ (5) 2 (3)
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 (22) 38
Other comprehensive earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55 (20) 35
Year ended December 31, 2016:
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (16) 6 (10)
Other comprehensive earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (16) 6 (10)
(17) Commitments and Contingencies
Guarantees
In connection with agreements for the sale of assets by the Company or its subsidiaries, the Company may retain
liabilities that relate to events occurring prior to its sale, such as tax, environmental, litigation and employment matters.
The Company generally indemnifies the purchaser in the event that a third party asserts a claim against the purchaser that
relates to a liability retained by the Company. These types of indemnification obligations may extend for a number of
years. The Company is unable to estimate the maximum potential liability for these types of indemnification obligations
as the sale agreements may not specify a maximum amount and the amounts are dependent upon the outcome of future
contingent events, the nature and likelihood of which cannot be determined at this time. Historically, the Company has not
F-88
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
made any significant indemnification payments under such agreements and no amount has been accrued in the
accompanying consolidated financial statements with respect to these indemnification guarantees.
Employment Contracts
The Atlanta Braves and certain of their players and coaches have entered into long-term employment contracts
whereby such individuals’ compensation is guaranteed. Amounts due under guaranteed contracts as of December 31, 2018
aggregated $165 million, which is payable as follows: $93 million in 2019, $36 million in 2020, $34 million in 2021,
$2 million in 2022, less than one million in 2023 and none thereafter. In addition to the foregoing amounts, certain players
and coaches may earn incentive compensation under the terms of their employment contracts.
Leases
The Company leases business offices, has entered into satellite transponder lease agreements and uses certain
equipment under lease arrangements. These leases provide for minimum lease payments, additional operating expense
charges, leasehold improvements and rent escalations, and certain leases have options to renew. The effect of the rent
holidays and rent concessions are recognized on a straight-line basis over the lease term, including reasonably assured
renewal periods.
Rental expense under such agreements amounted to $64 million, $58 million and $52 million for the years ended
December 31, 2018, 2017 and 2016, respectively.
A summary of future minimum lease payments under cancelable and noncancelable operating leases, as of
December 31, 2018 follows (amounts in millions):
It is expected that in the normal course of business, leases that expire generally will be renewed or replaced by
leases on other properties; thus, it is anticipated that future lease commitments will not be less than the amount shown for
2018.
Braves Holdings provided funding for the new stadium and the land during the initial construction period, until
the initial reimbursement by the Authority in September 2015, at which time the land was conveyed to the Authority.
Braves Holdings was deemed the owner (for accounting purposes) of the stadium during the construction period and costs
were classified as construction in progress (“CIP”), within the Property and equipment, net line item. Costs of the project
were captured in CIP along with a corresponding financing obligation, reported in other liabilities, for amounts funded by
the Authority. At the end of the construction period in March 2017, the Company performed an analysis and determined
that due to Braves Holdings’ continuing involvement with the property as a result of the purchase option at the end of the
lease term, the stadium did not qualify for sale-leaseback accounting treatment. Accordingly, Braves Holdings applied the
financing method of accounting whereby Braves Holdings began making license payments and amortizing the financing
obligation to the Authority using the effective interest rate method over a 30 year term. The stadium was reclassified from
CIP and placed into service on March 31, 2017. Also at this time, Braves Holdings began depreciating the stadium over a
45 year estimated useful life.
F-89
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
SIRIUS XM has entered into various programming agreements under which SIRIUS XM’s obligations include
fixed payments, advertising commitments and revenue sharing arrangements. In addition, SIRIUS XM has entered into
certain music royalty arrangements that include fixed payments. Amounts due under programming and music royalty
agreements are payable as follows: $430 million in 2019, $335 million in 2020, $218 million in 2021, $79 million in 2022
and $38 million in 2023. Future revenue sharing costs are dependent upon many factors and are difficult to estimate;
therefore, they are not included in the amounts above. In addition, SIRIUS XM has entered into agreements related to
certain satellite and transmission costs, sales and marketing costs and in-orbit performance payments to the manufacturer
of its satellites. Amounts due under these agreements are payable as follows: $146 million in 2019, $69 million in 2020,
$20 million in 2021, $13 million in 2022 and $10 million in 2023.
Litigation
The Company has contingent liabilities related to legal and tax proceedings and other matters arising in the
ordinary course of business. We record a liability when we believe that it is both probable that a liability will be incurred
and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount
of the liability accrual and make adjustments as appropriate. Significant judgment is required to determine both probability
and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the reasonably possible loss
or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages
sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of
pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the
outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved;
(vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there
may be considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if
any. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies
will not be material in relation to the accompanying consolidated financial statements.
In connection with a commercial transaction that closed during 2002 among Liberty, Vivendi Universal S.A.
(“Vivendi”) and the former USA Holdings, Inc., Liberty brought suit against Vivendi and Universal Studios, Inc. in the
United States District Court for the Southern District of New York, alleging, among other things, breach of contract and
fraud by Vivendi. On June 25, 2012, a jury awarded Liberty damages in the amount of €765 million, plus prejudgment
interest, in connection with a finding of breach of contract and fraud by the defendants. On January 17, 2013, the court
entered judgment in favor of Liberty in the amount of approximately €945 million, including prejudgment interest. The
parties negotiated a stay of the execution of the judgment during the pendency of the appeal. Vivendi filed notice of its
appeal of the judgment to the United States Court of Appeals for the Second Circuit. During the first quarter of 2016,
Liberty entered into a settlement with Vivendi which resulted in a $775 million payment to settle all claims related to the
dispute described above. Following the payment of a contingency fee to our legal counsel, as well as amounts payable to
Liberty Global plc, an additional plaintiff in the action, Liberty recognized a net pre-tax gain on the legal settlement of
approximately $511 million. The recovery received in connection with the settlement is attributed to the Formula One
Group. This settlement resulted in a dismissal of all appeals and mutual releases of the parties.
During the fourth quarters of 2017 and 2016, SIRIUS XM recorded $45 million and $46 million, respectively,
related to music royalty legal settlements and reserves. The expenses are included in the Revenue share and royalties line
item in the accompanying consolidated financial statements for the years ended December 31, 2017 and 2016, respectively,
but have been excluded from Adjusted OIBDA for the corresponding periods as these expense were not incurred as a part
of SIRIUS XM’s normal operations for the periods and do not relate to the on-going performance of the business.
F-90
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
On March 13, 2017, Thomas Buchanan, individually and on behalf of all others similarly situated, filed a class
action complaint against SIRIUS XM in the United States District Court for the Northern District of Texas, Dallas Division.
The plaintiff in this action alleges that SIRIUS XM violated the Telephone Consumer Protection Act of 1991 (the “TCPA”)
by, among other things, making telephone solicitations to persons on the National Do-Not-Call registry, a database
established to allow consumers to exclude themselves from telemarketing calls unless they consent to receive the calls in
a signed, written agreement, and making calls to consumers in violation of SIRIUS XM’s internal Do-Not-Call registry.
The plaintiff is seeking various forms of relief, including statutory damages of $500 for each violation of the TCPA or, in
the alternative, treble damages of up to $1,500 for each knowing and willful violation of the TCPA and a permanent
injunction prohibiting SIRIUS XM from making, or having made, any calls to land lines that are listed on the National Do-
Not-Call registry or SIRIUS XM’s internal Do-Not-Call registry. The plaintiff has filed a motion seeking class certification,
and that motion is pending. SIRIUS XM believes it has substantial defenses to the claims asserted in this action, and intends
to defend this action vigorously.
On June 7, 2018, SIRIUS XM entered into an agreement with SoundExchange, Inc. (“Sound Exchange”), the
organization that collects and distributes sound recording royalties pursuant to SIRIUS XM’s statutory license, to settle the
cases titled SoundExchange, Inc. v. Sirius XM Radio, Inc., No.13-cv-1290-RJL (D.D.C.), and SoundExchange, Inc. v.
Sirius XM Radio, Inc., No.17-cv-02666-RJL (D.D.C.). A description of these actions is contained in our prior public filings.
In connection with the settlement, SIRIUS XM made a one-time lump sum payment of $150 million to SoundExchange
on July 6, 2018. SIRIUS XM accrued for a portion of this liability in prior years and recorded a $69 million charge for the
remaining liability during the second quarter of 2018. This expense is included in the Revenue share and royalties line
item in the accompanying consolidated financial statements for the year ended December 31, 2018, but has been excluded
from Adjusted OIBDA for the corresponding periods as this expense was not incurred as a part of SIRIUS XM’s normal
operations and does not relate to the on-going performance of the business. The settlement resolved all outstanding claims,
including ongoing audits, under SIRIUS XM’s statutory license for sound recordings for the period January 1, 2007
through December 31, 2017.
The Company, through its ownership interests in subsidiaries and other companies, is primarily engaged in the
media and entertainment industries. The Company identifies its reportable segments as (A) those consolidated subsidiaries
that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets and (B) those equity
method affiliates whose share of earnings represent 10% or more of the Company’s annual pre-tax earnings. The segment
presentation for prior periods has been conformed to the current period segment presentation, as discussed below.
The Company evaluates performance and makes decisions about allocating resources to its operating segments
based on financial measures such as revenue and Adjusted OIBDA. In addition, the Company reviews nonfinancial
measures such as subscriber growth and penetration.
The Company defines Adjusted OIBDA as revenue less operating expenses, and selling, general and
administrative expenses (excluding stock-based compensation). The Company believes this measure is an important
indicator of the operational strength and performance of its businesses, including each business’s ability to service debt
and fund capital expenditures. In addition, this measure allows management to view operating results and perform
analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This
measure of performance excludes depreciation and amortization, stock-based compensation, separately reported litigation
settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant
to GAAP. 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 GAAP. The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third
parties, that is, at current prices.
F-91
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
The Company has identified the following subsidiaries as its reportable segments:
• SIRIUS XM is a consolidated subsidiary that provides a subscription based satellite radio service.
SIRIUS XM transmits music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well
as infotainment services, in the United States on a subscription fee basis through its two proprietary satellite
radio systems. SIRIUS XM also transmits a larger set of music and other channels and video programming
through its streaming service. SIRIUS XM’s streaming service is available online and through applications
for mobile devices, home devices and other consumer electronic equipment. SIRIUS XM also provides
connected vehicle services. SIRIUS XM’s connected vehicle services are designed to enhance the safety,
security and driving experience for vehicle operators while providing marketing and operational benefits to
automakers and their dealers.
• 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 taking place in different
countries around the world each season. Formula 1 is responsible for the commercial exploitation and
development of the World Championship. The Company acquired a controlling interest in Formula 1 on
January 23, 2017, at which time it began consolidating the results of the Formula 1 business.
The Company’s reportable segments are strategic business units that offer different products and services. They
are managed separately because each segment requires different technologies, distribution channels and marketing
strategies. The accounting policies of the segments that are also consolidated subsidiaries are the same as those described
in the Company’s summary of significant policies.
Performance Measures
F-92
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
Other Information
(1) This is primarily the intergroup interest in the Braves Group held by the Formula One Group, as discussed in note 2.
The intergroup interest attributable to the Formula One Group is presented as an asset and the intergroup interest
attributable to the Braves Group is presented as a liability in the attributed financial statements and the offsetting
amounts between tracking stock groups are eliminated in consolidation.
The following table provides a reconciliation of consolidated segment Adjusted OIBDA to earnings (loss) from
continuing operations before income taxes:
F-93
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
December 31,
2018 2017
amounts in millions
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,457 2,529
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 12
$ 2,469 2,541
F-94
LIBERTY MEDIA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2018, 2017 and 2016
2017:
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,395 2,140 2,065 1,994
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 259 422 382 331
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44 156 261 1,429
Net earnings (loss) attributable to Liberty stockholders:
Liberty SiriusXM common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 124 123 183 694
Liberty Braves common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (49) (2) 22 4
Liberty Formula One common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (96) (27) (37) 415
Basic net earnings (loss) attributable to Liberty stockholders per common
share:
Liberty SiriusXM common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.37 0.37 0.54 2.07
Liberty Braves common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1.00) (0.04) 0.45 0.08
Liberty Formula One common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.55) (0.13) (0.17) 1.80
Diluted net earnings (loss) attributable to Liberty stockholders per common
share:
Liberty SiriusXM common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.37 0.36 0.54 2.04
Liberty Braves common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1.00) (0.04) 0.45 0.07
Liberty Formula One common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.55) (0.13) (0.17) 1.79
F-95
Unaudited Attributed Financial Information for Tracking Stock Groups
During November 2015, Liberty Media Corporation’s (“Liberty”) board of directors authorized management to
pursue a reclassification of the Company’s common stock into three new tracking stock groups, one to be designated as
the Liberty Braves tracking stock, one to be designated as the Liberty Media tracking stock and one to be designated as
the Liberty SiriusXM tracking stock (the “Recapitalization”), and to cause to be distributed subscription rights related to
the Liberty Braves tracking stock following the creation of the new tracking stocks. The Recapitalization was completed
on April 15, 2016 and the newly issued shares commenced trading or quotation in the regular way on the Nasdaq Global
Select Market or the OTC Markets, as applicable, on Monday, April 18, 2016. Shortly following the completion of the
second closing of the acquisition of Formula 1 on January 23, 2017, the Liberty Media Group was renamed the Liberty
Formula One Group. Historical information of the Liberty Media Group and Liberty Media common stock is referred to
herein as the Formula One Group and Liberty Formula One common stock, respectively.
The following tables present our assets and liabilities as of December 31, 2018 and December 31, 2017 and
revenue, expenses and cash flows for the years ended December 31, 2018, 2017, and 2016. The tables further present our
assets, liabilities, revenue, expenses and cash flows that are attributed to the Liberty SiriusXM Group, Braves Group and
the Formula One Group, respectively. The financial information should be read in conjunction with our consolidated
financial statements for the year ended December 31, 2018 included in this Annual Report.
The attributed financial information presented herein has been prepared assuming this attribution had been
completed as of January 1, 2014. However, this attribution of historical financial information does not purport to be what
actual results and balances would have been if such attribution had actually occurred and been in place during these periods.
Therefore, the attributed net earnings (losses) presented in the unaudited attributed financial information are not the same
as the net earnings (losses) reflected in the Liberty consolidated financial statements included in this Annual Report. The
net earnings (losses) attributed to the Liberty SiriusXM common stock, Liberty Braves common stock and Liberty Formula
One common stock for purposes of those financial statements only relates to the period after the Recapitalization.
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 common stock and Liberty Formula One common stock does not affect the rights of our creditors.
F-96
SUMMARY ATTRIBUTED FINANCIAL DATA
F-97
Braves Group
(1) Includes stock-based compensation of $11 million, $48 million, and $9 million for the years ended December 31,
2018, 2017 and 2016, respectively.
F-98
Formula One Group
(1) Includes stock-based compensation of $25 million, $32 million, and $13 million for the years ended December 31,
2018, 2017, and 2016, respectively.
F-99
BALANCE SHEET INFORMATION
December 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 91 107 160 — 358
Trade and other receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . 233 21 110 — 364
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 129 40 — 360
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515 257 310 — 1,082
Intergroup interest in the Braves Group (note 1) . . . . . . . . . . . . . . . . — — 226 (226) —
Investments in debt and equity securities (note 1) . . . . . . . . . . . . . . . 967 8 303 — 1,278
Investments in affiliates, accounted for using the equity method
(note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629 92 920 — 1,641
F-100
BALANCE SHEET INFORMATION
December 31, 2017
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 615 132 282 — 1,029
Trade and other receivables, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 32 84 — 358
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 56 93 — 356
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,064 220 459 — 1,743
Intergroup interest in the Braves Group (note 1) . . . . . . . . . . . . . . . . . . . . . . . — — 202 (202) —
Investments in debt and equity securities (note 1) . . . . . . . . . . . . . . . . . . . . . . 580 8 526 — 1,114
Investments in affiliates, accounted for using the equity method (note 1) . . . . 672 145 933 — 1,750
F-101
STATEMENT OF OPERATIONS INFORMATION
December 31, 2018
(unaudited)
Attributed (note 1)
Liberty
SiriusXM Braves Formula One Consolidated
Group Group Group Liberty
amounts in millions
Revenue:
Subscriber revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,594 — — 4,594
Formula 1 revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,827 1,827
Other revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,177 442 — 1,619
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,771 442 1,827 8,040
Operating costs and expenses, including stock-based compensation (note 2):
Cost of subscriber services (exclusive of depreciation shown separately below):
Revenue share and royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,394 — — 1,394
Programming and content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406 — — 406
Customer service and billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 — — 382
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 — — 126
Cost of Formula 1 revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,273 1,273
Subscriber acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470 — — 470
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 247 — 370
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881 118 204 1,203
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 76 460 905
4,151 441 1,937 6,529
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,620 1 (110) 1,511
Other income (expense):
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (388) (26) (192) (606)
Share of earnings (losses) of affiliates, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) 12 17 18
Unrealized gain/(loss) on inter-group interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (24) 24 —
Realized and unrealized gains (losses) on financial instruments, net . . . . . . . . . . . . (1) (2) 43 40
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 35 18 78
(375) (5) (90) (470)
Earnings (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,245 (4) (200) 1,041
Income tax (expense) benefit (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (241) 15 50 (176)
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,004 11 (150) 865
Less net earnings (loss) attributable to the noncontrolling interests . . . . . . . . . . . . . . . 328 6 — 334
Net earnings (loss) attributable to Liberty stockholders. . . . . . . . . . . . . . . . . . . . . . . . . $ 676 5 (150) 531
F-102
STATEMENT OF OPERATIONS INFORMATION
December 31, 2017
(unaudited)
Attributed (note 1)
Liberty
SiriusXM Braves Formula One Consolidated
Group Group Group Liberty
amounts in millions
Revenue:
Subscriber revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,473 — — 4,473
Formula 1 revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,783 1,783
Other revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952 386 — 1,338
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,425 386 1,783 7,594
Operating costs and expenses, including stock-based compensation (note 2):
Cost of subscriber services (exclusive of depreciation shown separately below):
Revenue share and royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,210 — — 1,210
Programming and content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388 — — 388
Customer service and billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 — — 385
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 — — 119
Cost of Formula 1 revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,219 1,219
Subscriber acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499 — — 499
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 281 — 394
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812 151 199 1,162
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 67 405 824
3,878 499 1,823 6,200
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,547 (113) (40) 1,394
Other income (expense):
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (356) (15) (220) (591)
Share of earnings (losses) of affiliates, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 78 (3) 104
Unrealized gain/(loss) on inter-group interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (15) 15 —
Realized and unrealized gains (losses) on financial instruments, net . . . . . . . . . . . . (16) — (72) (88)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11) 3 16 8
(354) 51 (264) (567)
Earnings (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,193 (62) (304) 827
Income tax (expense) benefit (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466 36 561 1,063
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,659 (26) 257 1,890
Less net earnings (loss) attributable to the noncontrolling interests . . . . . . . . . . . . . . . 535 (1) 2 536
Net earnings (loss) attributable to Liberty stockholders. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,124 (25) 255 1,354
F-103
STATEMENT OF OPERATIONS INFORMATION
December 31, 2016
(unaudited)
Attributed (note 1)
Liberty
SiriusXM Braves Formula One Consolidated
Group Group Group Liberty
amounts in millions
Revenue:
Subscriber revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,194 — — 4,194
Other revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820 262 — 1,082
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,014 262 — 5,276
Operating costs and expenses, including stock-based compensation (note 2):
Cost of subscriber services (exclusive of depreciation shown separately below):
Revenue share and royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,109 — — 1,109
Programming and content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 — — 354
Customer service and billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387 — — 387
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 — — 144
Subscriber acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 — — 513
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 224 — 306
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 761 67 58 886
Legal settlement, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (511) (511)
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 32 10 354
3,662 323 (443) 3,542
Operating income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,352 (61) 443 1,734
Other income (expense):
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (342) (1) (19) (362)
Share of earnings (losses) of affiliates, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 9 (8) 14
Unrealized gain/(loss) on inter-group interest . . . . . . . . . . . . . . . . . . . . . . . . . . . — (27) 27 —
Realized and unrealized gains (losses) on financial instruments, net . . . . . . . . . . — 1 36 37
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) — 21 (4)
(354) (18) 57 (315)
Earnings (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 998 (79) 500 1,419
Income tax (expense) benefit (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (341) 17 (171) (495)
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657 (62) 329 924
Less net earnings (loss) attributable to the noncontrolling interests . . . . . . . . . . . . . 244 — — 244
Net earnings (loss) attributable to Liberty stockholders. . . . . . . . . . . . . . . . . . . . . . . $ 413 (62) 329 680
F-104
STATEMENT OF CASH FLOWS INFORMATION
December 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,004 11 (150) 865
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369 76 460 905
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 11 25 192
Share of (earnings) loss of affiliates, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (12) (17) (18)
Unrealized (gains) losses on intergroup interest, net . . . . . . . . . . . . . . . . . . . . . . . — 24 (24) —
Realized and unrealized (gains) losses on financial instruments, net . . . . . . . . . . . . 1 2 (43) (40)
Noncash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) 5 2 (1)
Losses (gains) on dilution of investment in affiliate . . . . . . . . . . . . . . . . . . . . . . . . — — 1 1
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 1
Deferred income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 (1) (63) 167
Intergroup tax allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 (14) (8) —
Intergroup tax (payments) receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20) 35 (15) —
Other charges (credits), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 (20) 1 (17)
Changes in operating assets and liabilities
Current and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 8 (35) (31)
Payables and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 (22) 133 132
Net cash provided (used) by operating activities . . . . . . . . . . . . . . . . . . . . . . 1,785 103 268 2,156
Cash flows from investing activities:
Cash proceeds from dispositions of investments . . . . . . . . . . . . . . . . . . . . . . . . . . — 155 244 399
Investments in equity method affiliates and debt and equity securities . . . . . . . . . . (405) — (9) (414)
Repayment of loans and other cash receipts from equity method affiliates and
debt and equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 — — 14
Capital expended for property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (356) (33) (14) (403)
Other investing activities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) 37 6 34
Net cash provided (used) by investing activities . . . . . . . . . . . . . . . . . . . . . . (756) 159 227 (370)
Cash flows from financing activities:
Borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,795 123 699 3,617
Repayments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,431) (317) (1,309) (4,057)
Series C Liberty SiriusXM stock repurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . (466) — — (466)
Subsidiary shares repurchased by subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,314) — — (1,314)
Cash dividends paid by subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59) — — (59)
Taxes paid in lieu of shares issued for stock-based compensation. . . . . . . . . . . . . . (127) — (3) (130)
Other financing activities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 (18) (3) 29
Net cash provided (used) by financing activities . . . . . . . . . . . . . . . . . . . . . . (1,552) (212) (616) (2,380)
Effect of foreign exchange rates on cash, cash equivalents and restricted
cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1) (1)
Net increase (decrease) in cash, cash equivalents and restricted cash . . . . . . . (523) 50 (122) (595)
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 . . . . . . . . . . . . . . $ 102 190 160 452
F-105
STATEMENT OF CASH FLOWS INFORMATION
December 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,659 (26) 257 1,890
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 67 405 824
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 48 32 230
Share of (earnings) loss of affiliates, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29) (78) 3 (104)
Unrealized (gains) losses on intergroup interest, net . . . . . . . . . . . . . . . . . . . . . . . — 15 (15) —
Realized and unrealized (gains) losses on financial instruments, net . . . . . . . . . . . . 16 — 72 88
Noncash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3 6 16
Losses (gains) on dilution of investment in affiliate . . . . . . . . . . . . . . . . . . . . . . . . — — (3) (3)
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 5 8 48
Deferred income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (492) 2 (574) (1,064)
Intergroup tax allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (39) 45 —
Intergroup tax (payments) receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 15 (19) —
Other charges (credits), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 18 (10) 4
Changes in operating assets and liabilities
Current and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 (57) 77 50
Payables and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 (15) (359) (247)
Net cash provided (used) by operating activities . . . . . . . . . . . . . . . . . . . . . . 1,849 (42) (75) 1,732
Cash flows from investing activities:
Cash proceeds from dispositions of investments . . . . . . . . . . . . . . . . . . . . . . . . . . — 5 16 21
Net cash paid for the acquisition of Formula 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1,647) (1,647)
Investments in equity method affiliates and debt and equity securities . . . . . . . . . . (851) (2) (9) (862)
Capital expended for property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (288) (219) (10) (517)
Other investing activities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115) (5) (12) (132)
Net cash provided (used) by investing activities . . . . . . . . . . . . . . . . . . . . . . (1,254) (221) (1,662) (3,137)
Cash flows from financing activities:
Borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,553 544 1,600 6,697
Repayments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,216) (218) (1,673) (5,107)
Proceeds from issuance of Series C Liberty Formula One common stock . . . . . . . . — — 1,938 1,938
Subsidiary shares repurchased by subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,409) — — (1,409)
Cash dividends paid by subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (60) — — (60)
Taxes paid in lieu of shares issued for stock-based compensation. . . . . . . . . . . . . . (100) (30) (5) (135)
Other financing activities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35) — (13) (48)
Net cash provided (used) by financing activities . . . . . . . . . . . . . . . . . . . . . . (267) 296 1,847 1,876
Effect of foreign exchange rates on cash, cash equivalents and restricted cash . . . . . . — — 4 4
Net increase (decrease) in cash, cash equivalents and restricted cash . . . . . . . 328 33 114 475
Cash, cash equivalents and restricted cash at beginning of period . . . . . . . . . 297 107 168 572
Cash, cash equivalents and restricted cash at end of period . . . . . . . . . . . . . . $ 625 140 282 1,047
F-106
STATEMENT OF CASH FLOWS INFORMATION
December 31, 2016
(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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 657 (62) 329 924
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 32 10 354
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 9 13 150
Share of (earnings) loss of affiliates, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) (9) 8 (14)
Unrealized (gains) losses on intergroup interest, net . . . . . . . . . . . . . . . . . . . . . . . — 27 (27) —
Realized and unrealized (gains) losses on financial instruments, net . . . . . . . . . . . . — (1) (36) (37)
Noncash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 5 — 11
Loss on early extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 — — 24
Deferred income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332 1 94 427
Intergroup tax allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) (19) 32 —
Intergroup tax (payments) receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7 (14) —
Other charges (credits), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 11 (2) 30
Changes in operating assets and liabilities
Current and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 (17) (17) 25
Payables and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 105 (12) 277
Net cash provided (used) by operating activities . . . . . . . . . . . . . . . . . . . . . . 1,704 89 378 2,171
Cash flows from investing activities:
Cash proceeds from dispositions of investments . . . . . . . . . . . . . . . . . . . . . . . . . . — — 62 62
Investments in equity method affiliates and debt and equity securities . . . . . . . . . . — (20) (764) (784)
Repayment of loans and other cash receipts from equity method affiliates and
debt and equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 48 48
Capital expended for property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (206) (360) (2) (568)
Purchases of short term investments and other marketable securities . . . . . . . . . . . — — (258) (258)
Sales of short term investments and other marketable securities . . . . . . . . . . . . . . . — — 273 273
Other investing activities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) (33) — (37)
Net cash provided (used) by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . (210) (413) (641) (1,264)
Cash flows from financing activities:
Borrowings of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,847 460 438 2,745
Repayments of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,471) (276) (2) (1,749)
Intergroup (payments) receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 16 (74) —
Subsidiary shares repurchased by subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,674) — — (1,674)
Braves Rights Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 203 — 203
Cash dividends paid by subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16) — — (16)
Taxes paid in lieu of shares issued for stock-based compensation. . . . . . . . . . . . . . (47) — (11) (58)
Other financing activities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16) 15 4 3
Net cash provided (used) by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . (1,319) 418 355 (546)
Net increase (decrease) in cash, cash equivalents and restricted cash . . . . . . . 175 94 92 361
Cash, cash equivalents and restricted cash at beginning of period . . . . . . . . . 122 13 76 211
Cash, cash equivalents and restricted cash at end of period . . . . . . . . . . . . . . $ 297 107 168 572
F-107
Notes to Attributed Financial Information (Continued)
(unaudited)
(1) As discussed above and in note 2 the accompanying consolidated financial statements, on April 15, 2016 Liberty
completed a recapitalization of Liberty Media Corporation’s (“Liberty” or the “Company”) common stock into
three new tracking stock groups, one designated as the Liberty Braves common stock, one designated as the Liberty
Media common stock and one designated as the Liberty SiriusXM common stock (the “Recapitalization”). Upon
completion of the Second Closing of the acquisition of Formula 1 on January 23, 2017, as discussed below, the
Liberty Media Group was renamed the Liberty Formula One Group (the “Formula One Group”).
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, 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, investments
in debt securities, Liberty’s 2.125% Exchangeable Senior Debentures and a margin loan obligation incurred by a
wholly-owned special purpose subsidiary of Liberty. On February 1, 2019, SIRIUS XM acquired Pandora Media,
Inc. (“Pandora”). See note 7 to the accompanying consolidated financial statements for information related to
SIRIUS XM’s acquisition of Pandora. As of December 31, 2018, the Liberty SiriusXM Group has cash and cash
equivalents of approximately $91 million, which includes $54 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 December 31, 2018, the Braves Group has cash and cash equivalents of approximately $107 million, which
includes $40 million of subsidiary cash. Additionally, as discussed below, the Formula One Group retains an
intergroup interest in the Braves Group. See note 2 to the accompanying consolidated financial statements for
information regarding the Series C Liberty Braves common stock rights offering.
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, as of December 31, 2018,
Liberty’s interests in Formula 1 and Live Nation, an intergroup interest in the Braves Group as well as Liberty’s
1.375% Cash Convertible Notes due 2023 and related financial instruments, Liberty’s 1% Cash Convertible Notes
due 2023, Liberty’s 2.25% Exchangeable Senior Debentures due 2046 and Liberty’s 2.25% Exchangeable Senior
Debentures due 2048. On September 7, 2016 Liberty, through its indirect wholly owned subsidiary Liberty GR
Cayman Acquisition Company, entered into two definitive stock purchase agreements relating to the acquisition of
Delta Topco Limited (“Delta Topco”), the parent company of Formula 1, a global motorsports business. The
transactions contemplated by the first purchase agreement were completed on September 7, 2016 and provided for
the acquisition of slightly less than a 20% minority stake in Formula 1 on an undiluted basis. On October 27, 2016,
under the terms of the first purchase agreement, Liberty acquired an additional incremental equity interest of Delta
Topco, maintaining Liberty’s investment in Delta Topco on an undiluted basis and increasing slightly to 19.1% on
a fully diluted basis. Liberty’s interest in Delta Topco and by extension Formula 1 is attributed to the Formula One
Group. Liberty acquired 100% of the fully diluted equity interests of Delta Topco, other than a nominal number of
shares held by certain Formula 1 teams, in a closing under the second purchase agreement (and following the unwind
of the first purchase agreement) on January 23, 2017 (the “Second Closing”). Liberty’s acquired interest in
Formula 1, along with existing Formula 1 cash and debt (which is non-recourse to Liberty), was attributed to the
Formula One Group upon completion
F-108
Notes to Attributed Financial Information (Continued)
(unaudited)
of the Second Closing. As of December 31, 2018, the Formula One Group has cash and cash equivalents of
approximately $160 million, which includes $30 million of subsidiary cash.
As part of the Recapitalization, the Formula One Group initially held a 20% intergroup interest in the Braves Group.
As a result of the rights offering, the number of notional shares underlying the intergroup interest was adjusted to
9,084,940, representing a 15.1% intergroup interest in the Braves Group as of December 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 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 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 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 consolidated
statements of operations.
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 available for sale securities and other cost investments, investments in
affiliates accounted for using the equity method and debt, see notes 7, 8 and 10, respectively, of the accompanying
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 will be 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) We have accounted for income taxes for the Liberty SiriusXM Group, the Braves Group and the Formula One
Group in the accompanying attributed financial information in a manner similar to a stand-alone company basis.
To the extent this methodology differs from our tax sharing policy, differences have been reflected in the attributed
net assets of the respective groups.
F-109
Notes to Attributed Financial Information (Continued)
(unaudited)
Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of
21% for the year ended December 31, 2018 and 35% for both of the years ended December 31, 2017 and 2016
as a result of the following:
F-110
Notes to Attributed Financial Information (Continued)
(unaudited)
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and
deferred income tax liabilities are presented below:
December 31,
2018 2017
amounts in millions
Deferred tax assets:
Tax loss and credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . $ 951 689
Accrued stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 78
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 52
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523 500
Other future deductible amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,568 1,329
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67) (53)
Net deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,501 1,276
Deferred tax liabilities:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 23
Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226 198
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,484 2,494
Discount on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 8
Other future taxable amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 —
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,174 2,723
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,673 1,447
Braves Group
F-111
Notes to Attributed Financial Information (Continued)
(unaudited)
Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of
21% for the year ended December 31, 2018 and 35% for both of the years ended December 31, 2017 and 2016
as a result of the following:
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and
deferred income tax liabilities are presented below:
December 31,
2018 2017
amounts in millions
Deferred tax assets:
Tax loss and credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3 8
Accrued stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 114
Other future deductible amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 13
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 137
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (8)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 129
Deferred tax liabilities:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 19
Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 126
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 46
Other future taxable amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 —
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 191
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 69 62
F-112
Notes to Attributed Financial Information (Continued)
(unaudited)
Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of
21% for the year ended December 31, 2018 and 35% for both of the years ended December 31, 2017 and 2016
as a result of the following:
F-113
Notes to Attributed Financial Information (Continued)
(unaudited)
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and
deferred income tax liabilities are presented below:
December 31,
2018 2017
amounts in millions
Deferred tax assets:
Tax loss and credit carryforwards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 401 320
Accrued stock compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 8
Other accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 9
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2
Discount on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 34
Other future deductible amounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 374
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (104) (51)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320 323
Deferred tax liabilities:
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 68
Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2
Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 220
Discount on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 292
Net deferred tax (assets) liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (91) (31)
(4) There was an intergroup arrangement regarding AT&T Inc. (“AT&T”) shares held by the Formula One Group that
were pledged as collateral pursuant to a loan at the Braves Group. Following the Recapitalization, the Company’s
board of directors approved an amount payable by the Braves Group to pay the Formula One Group in order to
reflect the credit support provided by the assets of the Formula One Group used as collateral for the credit facility
obligations of the Braves Group. The amount of this obligation was determined and paid quarterly in arrears, based
on the average share price of AT&T (previously Time Warner, Inc.) common stock each period. This inter-group
arrangement was recorded through the Intergroup payable (receivable) line item in the consolidated attributed
balance sheets and through the Interest expense line item in the consolidated attributed statements of operations and
eliminated in consolidation. There were no AT&T shares pledged as collateral as of December 31, 2018.
The intergroup balances as December 31, 2018 and December 31, 2017 also include the impact of the timing of
certain tax benefits. Per the tracking stock tax sharing policies, consolidated income taxes arising from the Liberty
SiriusXM Group in periods prior to the Recapitalization were not subject to tax sharing and were allocated to the
Formula One Group. As such, the balance of the Intergroup tax payable between the Liberty SiriusXM Group and
the Formula One Group was zero at the effective date of the Recapitalization and is accounted for going forward
beginning on such date.
(5) 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 will be entitled to one vote per share, and holders of Series B common stock of
each group will be entitled to ten votes per share. Holders of Series C common stock of each group will be 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 will 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, Series A
and Series B Liberty Braves common stock, or the approval of the holders of only Series A and Series B Liberty
Formula One common stock.
F-114
Notes to Attributed Financial Information (Continued)
(unaudited)
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.
F-115
CORPORATE DATA
STATEMENT
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