Liberty Media Corporation - Series A Liberty Formula One · NASDAQ:FWONA
Liberty Media Corporation - Series A Liberty Formula One — Liberty Media — Investor Day (November 2018)
100 slides from Liberty Media Corporation - Series A Liberty Formula One's investor day presentation, Nov 14, 2018
Slide 1: Liberty Media Corporation 2018 Investor Day
Liberty Media Corporation 2018 Investor Day November 14, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential, new service and product launches, Formula 1 tax considerations, expec
Slide 3: Agenda
Agenda 8:00 – 9:00 Experience Liberty & Breakfast 9:00 – 9:15 Welcome………………….. Courtnee Chun 9:15 – 9:35 Liberty Media……………... Greg Maffei & Mark Carleton 9:35 – 9:55 SiriusXM………………….. Jim Meyer 9:55 – 10:15 Formula 1………………….. Chase Carey 10:15 – 10:35 Live Nation……………….. Michael Rapino 10:35 – 10:5
Slide 4: 2018 Investor Day Logistics
2018 Investor Day Logistics Tag #LibertyInvestorDay
Slide 5: Making the World Safe for Media Investing
“Making the World Safe for Media Investing” Greg Maffei – President & CEO
Slide 6: Milestones Since Last Meeting
Milestones Since Last Meeting • Announced new race in Vietnam beginning in 2020 • Announced new sponsorship agreements with AWS, ISG and more • Renewed key contracts with promoters, sponsors and broadcast partners • Launched F1 TV on desktop and mobile • Successful second season of Esports, with 67m
Slide 7: Taking Advantage of Liberty SiriusXM Group NAV Discount
Taking Advantage of Liberty SiriusXM Group NAV Discount SIRI Share Price vs. Implied SIRI Look-Through from LSXMK Repurchases(1) $8.00 $7.10 $6.77 $7.02 $7.10 $6.24 $6.33 $6.32 $5.97 $6.00 28% Average Discount to Market $4.00 $4.48 $4.37 $4.69 $4.97 $5.04 $5.01 $4.95 $4.64 $2.00 - 8 8 8 8 18 18 18 1
Slide 8: Continuing History of Strong Returns
Continuing History of Strong Returns Composite LMC(1) • Value per share up over 14-fold since issuance in May-06 As of 11/8/18 • Composite Liberty Media CAGR of 24% versus 6% S&P and 10% NASDAQ $1,400 LMC Composite Price per Share $1,200 $1,000 $800 AGR 24% C $600 $400 $200 $0 Au 7 Au 4 Fe 1 Fe 6 M
Slide 9: Who, What, Where at Liberty Media
Who, What, Where at Liberty Media 71% 100% 100% Debt Investment 34% Various Investments Note: Ownership percentages as of 11/8/18. 9
Slide 10: Traditional Media Was a Great Business
Traditional Media Was a Great Business 10
Slide 11: Content Businesses Have Become Scary Place
Content Businesses Have Become Scary Place Stocks Under Pressure (5yr CAGR) -19% Viacom -13% Tribune -6% Discovery -2% Sinclair -3% AMC -2% CBS 0% Omnicom 9% MSG Networks 9% Disney EV / EBITDA Multiples Compressing(1) 14.3x 12.6x 12.2x 12.7x 12.4x 12.0x 11.9x 11.5x 11.3x 10.5x 10.4x 10.2x 8.7x 9.1x
Slide 12: More Time Spent with Media, But More Platforms Vying For Attention
More Time Spent with Media, But More Platforms Vying For Attention • Average American adult spends over 11 hours consuming media content per day(1) • Over 5 of those hours spent watching video • US children spend 3.6 hours per day watching screens for video games, videos and other recreational activ
Slide 13: Too Much Content. Too Many Platforms.
Too Much Content. Too Many Platforms. How ‘Original’ Can You Be?(1) 288 scripted series in 2012 à 487 in 2017(1): 487 117 online series, up 680% compared to 2012 288 90 117 33 49 24 34 37 36 42 15 33 29 148 150 146 153 131 119 161 174 186 183 175 125 2012 2013 2014 2015 2016 2017 Basic Cable Broadca
Slide 14: Content Costs Accelerating
Content Costs Accelerating • Streaming providers allocating massive budget to original content, pressuring production ecosystem for all • Rising cost of talent, location scouting, renting equipment, transportation etc. • David Nevins, Showtime President & CEO predicts that in two years, total annual
Slide 15: New Entrants Playing a Different Game
New Entrants Playing a Different Game • Premium placed on growth, not profit • Large media companies with outside monetization sources can afford to invest in loss leaders 100m+ Prime members globally $49b Advertising revenue(1) ~60% US household penetration Media 1.49b Daily active users 2018E cont
Slide 16: Netflix: Reigning King
Netflix: Reigning King Enormous Shareholder Value Creation $500.00 % $375.00 8 / 1 8 CAGR: 72 $250.00 1/2/1 3 – 11/ $125.00 $- Jan-13 Nov-13 Sep-14 Jul-15 May-16 Mar-17 Jan-18 Nov-18 Subscriber Growth Continues(1) 2011: 24 million subs Q3-18: 137 million subs Domestic: 21.7 million Domestic: 58.5 mi
Slide 17: Our Goal: De-Risk Media Investing
Our Goal: De-Risk Media Investing Here’s an actual slide we presented in 2010… P P P P P P P P 17
Slide 18: Market Leader with Compelling Content
Market Leader with Compelling Content… • 33.7m paid subscribers • 43% of all US cars equipped with SiriusXM-enabled radio • Subscriber growth continues to benefit margins, with SAC only 7.5% of revenue • Record low churn despite increasing penetration • 75%+ free cash flow conversion(1) All figures
Slide 19: But It's Not Just Listening in Your Car
…But It’s Not Just Listening in Your Car Out of car engagement enhances value proposition and makes stickier subscriber relationships New app on iOS and Video content Growing connected Pandora acquisition Android devices • More search and discovery • Millions of plays and strong • Increased marketin
Slide 20: A League of Our Own
A League of Our Own… • Massive global reach and engagement • Diverse contracted revenue streams • Predominantly variable cost structure • Low capital intensity drives 97%(1) free cash flow conversion • Underinvested asset with large growth opportunities (1) Average over prior six year period of unle
Slide 21: But It's Not Just the Race
…But It’s Not Just the Race Launched OTT Service F1 TV Elevating Merchandise Assortment • Additional camera angles • Premium F1 merchandise, • Enhanced data Grand Prix-specific items • Archive of 200 historical races • Sponsorship: Fanatics as exclusive merchandise retail partner New Content Partner
Slide 22: Flywheel Keeps Turning
Flywheel Keeps Turning… ng Poweri 2018E Sponsorship 2017 90m+ fans Ticketing 2016 86m fans 71m fans 33k shows Onsite spend 30k shows 26k shows 22
Slide 23: But It's Not Just the Show
…But It’s Not Just the Show Enhancing VIP Offering • Upgrade experience consistently across venues Live Nation Average Per-Fan Spend(1) • Multiple premium parking levels $27 Better Product Selection with New Points of Sale • Optimize product mix and pricing $22 • Higher quality food and beverage • A
Slide 24: Hitting it Out of the Park
Hitting it Out of the Park… • Valuable live content • Best-in-class new ballpark is model for other teams • Long-term contracted sponsorship and broadcast revenue streams • Attractive Atlanta market demographics with mega-regional fan base 24
Slide 25: But It's Not Just the Game
…But It’s Not Just the Game • Consistent foot traffic at Battery Atlanta both before and after game • Battery attracts 3 million people per year, in addition to baseball game attendees Dine Work Stay 1,000 900 employees employees Play 3 of top 10 grossing Omni average daily rate: $218 Atlanta restau
Slide 26: It's Liberty's World... We're Just Living In It
It’s Liberty’s World… We’re Just Living In It 500k PSUs 144m monthly 33.7m subs 12.9m unique visitors customers 500m fans 22m loan requests 6.6m customers 5.6m annual visitors 550m fans 490m monthly 4.5m 53m unique visitors customers PSUs Nearly 2 billion consumer touch points across investments Com
Slide 27: Mark Carleton – CFO
Mark Carleton – CFO
Slide 28: Liberty Media Liquidity & Monetizable Assets
Liberty Media Liquidity & Monetizable Assets ($ in millions) Cash and Cash Equivalents(1) Margin Loan Capacity Unencumbered Public Holdings $14,307 $1,450 $13,427 2.2b SIRI shares 15.9m LYV shares $1,149 9.1m BATRK shares $78 $150 $78 $151 $80 $800 Note: Axes are not to scale. Cash and debt balances
Slide 29: Formula One Group Debt Overview
Formula One Group Debt Overview $ in millions $ in millions $4,951 As of 9/30/18 Formula 1 Debt $2,049 Corporate Level Debt Formula 1 Bank Loans $2,902 Corporate Level Debt 1.375% convertible notes due 2023(1) $1,000 1% FWONK convertible notes due 2023(1) $450 2.25% AT&T Exchangeable due 2046(1) $21
Slide 30: Formula 1 Leverage Still Above Target
Formula 1 Leverage Still Above Target • Maintaining long-term leverage target of 5-6x covenant OIBDA at F1 operating business • Near-term increase in leverage result of declining OIBDA due to significant investment in business • Business will generate free cash flow that can continue to be used to r
Slide 31: Impactful Formula 1 Debt Restructuring
Impactful Formula 1 Debt Restructuring • Additional $22m+ annualized interest savings since last Liberty Investor Day $114m+ net annualized interest savings(1) and 2+ yrs. maturity extension $ in millions $35+ Annual Int. Exp. $270 Net Int. Exp. Reduction - Spread $35+ Net Int. Exp. Reduction - Repa
Slide 32: Formula 1 Financials – Revenue Recognition
Formula 1 Financials – Revenue Recognition Calendar and timing of races has significant impact on quarterly reported results • Promotion revenue recognized on day of each race • Broadcast revenue recognized pro-rata across race calendar, with some variation due to FX movements • Advertising & Sponso
Slide 33: Formula 1 Financials – Cost Recognition
Formula 1 Financials – Cost Recognition • Team payments • Expense recognized pro-rata across race calendar • Cash payments: • Variable prize fund paid in fairly even installments across months of race season (March – November) with “true-up” points • Final true-up balance paid post-season (February)
Slide 34: Appendix
Appendix 34
Slide 35: Liberty Media Convertible / Exchangeable Debt Cheat Sheet
Liberty Media Convertible / Exchangeable Debt Cheat Sheet 1.375% Convert. Notes 1.0% Convert. Notes 2.25% Exchange. Debent.(2) 2.125% Exchange. Debent. Description Issuing Entity Liberty Media Corporation Liberty Media Corporation Liberty Media Corporation Liberty Media Corporation Attributed Tracki
Slide 36: Detailed Overview of 2.25% Exchangeable Senior Debentures due 2046
Detailed Overview of 2.25% Exchangeable Senior Debentures due 2046 • Attributed to Formula One Group • $215m(1) remaining principal outstanding at 9/30/18 • $445m original principal • 2.25% quarterly coupon • Final maturity in 2046 with put-call in 2021 • Debentures adjusted for AT&T (“T”) acquisiti
Slide 37: Detailed Overview of 1.375% Cash Convertible Notes due 2023
Detailed Overview of 1.375% Cash Convertible Notes due 2023 • Attributed to Formula One Group • $1b Convertible Senior Notes • 1.375% semi-annual coupon • Final maturity 2023 • Cash settle • Basket of securities per $1,000 notes includes: • 21.0859 shares of LSXMA • Based on 1.000 LSXMA conversion r
Slide 38: Braves Group Debt
Braves Group Debt As of 9/30/18 Total Outstanding ($ in millions) Capacity Team Operating Debt MLB Leaguewide Credit Facility $100 $28 SunTrust Revolver $85 $18 Non-recourse to Braves Holdings Secured by various revenue streams, including: Spring Training Facility $40 $25 • Naming Rights • Suite and
Slide 39: Formula 1 Tax Considerations
Formula 1 Tax Considerations • Under UK tax legislation, UK interest expense deductions are limited to 30% of UK EBITDA • Deductible interest is primarily attributed to bank debt • Carry forward of F1’s unused interest deductions possible, but its future use may be limited • F1 expects to be UK taxp
Slide 40: Composite LMC – It All Adds Up
Composite LMC – It All Adds Up • 5/9/06: LCAPA (“LMC”) tracking stock issued • 3/3/08: LMC issues LMDIA/B 4-for-1 As of 11/8/2018 • 11/19/09: DTV spun from LMDIA 1-for-1; remaining assets become LSTZA on a 0.10-to-1 basis FWONA 8.18 LSTZA tracker 93.29 • 11/28/11: LMC re-combines with LSTZA on a 0.8
Slide 41: Non-GAAP Information
Non-GAAP Information This presentation includes presentations of adjusted OIBDA and net operating income for Braves Holdings, which are non-GAAP financial measures, together with reconciliations to operating income, as determined under GAAP. Liberty Media defines adjusted OIBDA as revenue less opera
Slide 42: SiriusXM
((SiriusXM)) Liberty Media Investor Day | November 2018
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Slide 65: Appendix | Reconciliation
((‘SiriusKm))) Appendix | Reconciliation
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Slide 70: The Greatest Racing Spectacle on the Planet
Investor Presentation Nov-18 THE GREATEST RACING SPECTACLE ON THE PLANET
Slide 71: The Greatest Racing Spectacle on the Planet
Investor Presentation Nov-18 THE GREATEST RACING SPECTACLE ON THE PLANET
Slide 72: The Greatest Racing Spectacle on the Planet
Investor Presentation Nov-18 THE GREATEST RACING SPECTACLE ON THE PLANET
Slide 73: The Greatest Racing Spectacle on the Planet
Investor Presentation Nov-18 THE GREATEST RACING SPECTACLE ON THE PLANET
Slide 74: The Greatest Racing Spectacle on the Planet
Investor Presentation Nov-18 THE GREATEST RACING SPECTACLE ON THE PLANET
Slide 75: The Greatest Racing Spectacle on the Planet
Investor Presentation Nov-18 THE GREATEST RACING SPECTACLE ON THE PLANET
Slide 76: The Greatest Racing Spectacle on the Planet
Investor Presentation Nov-18 THE GREATEST RACING SPECTACLE ON THE PLANET
Slide 77: Formula 1: Turn Initiatives Into Profit Growth
[Turn Initiatives Into Profit Growth hme , | es = , a és 4 Promotion Sponsorship TV Stabilise Overhead & Operating Costs Capture Efficiencies PF Wee.
Slide 78: Formula 1: Race Promotion
‘Race Promotion ye ti ey ita mesic C, Replace Selected Races Expand Number of Grow High End Hospitality Races ’ \ Unique sport and event with Good races and good value passionate, high-end fans Hospitality
Slide 79: Formula 1: Sponsorship
Sponsorship Mr Expand Product Portfolio and Sales Approach . 2 + Improved client acquisition & management 4 a >> tools Ld =e + Regionailsation, digital, fan festivals, Esports, - ~* = = virtual signage etc. | ~— =~ — ly O Engage Existing and New = Potential Sponsors «+ Strong renewals + First region
Slide 80: Formula 1: Television
| Television © Fiwsits ~* aws CORNER SPEED
Slide 81: PRESENTATION FOOTER TEXT - EDIT THIS TEXT IN VIEW / HEADER & FOOTER
PRESENTATION FOOTER TEXT - EDIT THIS TEXT IN VIEW / HEADER & FOOTER 81
Slide 82: Atlanta Braves – Investor Update
ATLANTA BRAVES – INVESTOR UPDATE November 14, 2018
Slide 83: Mike Plant
Mike Plant CEO Braves Development Company 8 3
Slide 84: SunTrust Park and The Battery Atlanta exceeding expectations
SunTrust Park and The Battery Atlanta exceeding expectations § Braves 2nd Season in Suntrust Park performed better than inaugural year in all aspects § Braves on-field performance better than baseball experts predicted • 1st time in the playoffs since 2013 § The Battery Atlanta’s first full year ope
Slide 85: 8
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Slide 86: Atlanta Braves exceeded all expectations on the field
Atlanta Braves exceeded all expectations on the field § Final regular season attendance was 2,555,782 – 31,553 per game, 2% over 2017 and highest in 11 years § Braves games delivered the highest year-over-year household ratings growth of any MLB team • Average 3.2 household rating – +76% over 2017 §
Slide 87: Atlanta Braves shows solid year-over-year growth
Atlanta Braves shows solid year-over-year growth 26% wth 32% th 7% gro 66% wth w 10 owth gro gro gr 2016 Turner Field (1) 2017 SunTrust Park 2018 SunTrust Inaugural Season (1) Park Season 2 (1) (1) Stats based on 2018 & 2016 MLB Management Report; Sponsorship dollars based on October 2018 forecast 8
Slide 88: There's no end to our season…
• Need more photos- Focus on STP/BATT There’s no end to our season… footprint +xmas 5k, show photo collage 3 successful concerts in 2018 8 8
Slide 89: The Battery Atlanta
TH Ie BATTERY ATLANTA
Slide 90: The Battery Atlanta Today and Tomorrow
The Battery Atlanta TODAY TOMORROW 328K SF 968K SF Class A Office Class A Office 219K SF 239K SF Retail Retail 53K SF 114K SF Entertainment Entertainment 264 key 264 key/ Omni Hotel 140 key Omni Hotel/ A-Loft Hotel 90
Slide 91: The Battery Atlanta – Operating Assets
The Battery Atlanta – Operating Assets Office Retail Hotel Music Venue 328k sf 219k sf 264 keys 53k sf 100% Owned 100% Owned 50% Joint Venture 100% Owned • Comcast SE • 88% leased • Omni hotel - 4.5 • Roxy music venue – American HQ – • Includes retail, bars hotel sponsored by Live Class A restaurant
Slide 92: The Battery Atlanta – Development Projects
The Battery Atlanta – Development Projects ‘Block C’ Three Ballpark Center 174k sf mixed use 600k sf $70M estimated cost – Summer 2020 est. completion date $135M estimated cost – 2020 est. completion date • A-Loft hotel – 50% Joint Venture • Class A Office and parking 100% owned by BDC • Additional
Slide 93: Summary of Residential Sale
Summary of Residential Sale § The Battery Atlanta Residential property sale closed on October 9, 2018 § Gross sales price $156M § $61M cash proceeds(1) primarily used to fund future development § New owner, Cortland Properties, will preserve the look and feel of The Battery Atlanta as part of the co
Slide 94: Jill Robinson
Jill Robinson EVP, CFO 94
Slide 95: Braves Holdings
Braves Holdings Adjusted OIBDA ($M) Nine Months Pro-forma Nine Months Pro-forma Ended Excluding Ended Excluding 9/30/2018 Residential (3) 9/30/2017 Residential (3) Baseball Revenue $ 382 $ 382 $ 359 $ 359 Development Revenue 28 22 7 6 Total Revenue 410 404 366 365 Baseball Expenses 292 292 310 310 D
Slide 96: Braves Development Co.
Braves Development Co. Net Operating Income ($M) Current FY18 % of Stablized % of Occupancy % YTD NOI (2) Revenue NOI (3) Revenue Office 100% $ 7.2 80% $ 11.4 86% Retail 88% $ 3.2 46% $ 6.4 53% Entertainment 100% $ 1.4 82% $ 2.2 82% Total Consolidated Assets (4) $ 11.8 $ 20.0 Hotel (1) 100% $ 5.0 28
Slide 97: SunTrust Park and The Battery Atlanta exceeding expectations
SunTrust Park and The Battery Atlanta exceeding expectations § Strong success on the field and in the Battery translating to strong financial performance § We believe the Braves team is setup for a winning season in 2019 and our financial success creates flexibility to make wise investments in the t
Slide 98: Atlanta Braves
ATLANTA BRAVE
Slide 99: Appendix: Adjusted OIBDA Reconciliation
APPENDIX Adjusted OIBDA Reconciliation to GAAP Operating Income YTD YTD 9/30/2018 9/30/2017 Adjusted OIBDA $ 105 $ 49 Stock-based Compensation (8) (40) Depreciation/Amortization (63) (50) Operating Income (Loss) $ 34 $ (41) 99
Slide 100: Appendix: Net Operating Income Reconciliation
APPENDIX Net Operating Income Reconciliation to GAAP Operating Income YTD 9/30/2018 Net Operating Income-Development (1) $ 12 NOI Residential (2) 1 Parking/Other 3 Ownership expenses (1) Stock-based Compensation (3) (1) Depreciation/Amortization (14) Operating Income - Development $ 1 NOTES: (1) See