jvid视频 Reports First Quarter 2013 Financial Results
ENGLEWOOD, Colo.--(BUSINESS WIRE)-- jvid视频 (鈥渏vid视频鈥) (Nasdaq: LMCA, LMCB) today reported first quarter 2013 results. Highlights include(1):
-
SiriusXM reported strong Q1 results
- Subscribers grew by 453,000 to a record 24.4 million
- Record revenue of $897 million, up 12%
- Net income of $124 million, up 15%
- Adjusted EBITDA(2) grew 26% to $262 million
- Named Jim Meyer CEO
-
Completed investment in Charter Communications on May 1
- Own 27.3% of the outstanding equity
- Four Liberty designated directors appointed to Charter鈥檚 board
- Secured $1.4 billion in financing
- Repurchased $71 million of jvid视频 shares from February 1 through April 30
鈥淲e are extremely pleased with the operating results of our newest subsidiary, SiriusXM, which grew its subscriber base to over 24 million,鈥 said Greg Maffei, President and CEO of jvid视频. 鈥淎fter an extensive search, Jim Meyer was named CEO of SiriusXM. Jim has been an integral part of SiriusXM鈥檚 success and we are excited for him to lead the company going forward. Last week we closed our investment in Charter Communications and secured $1.4 billion of financing. We look forward to working with Tom Rutledge, his team, and our fellow board members.鈥
jvid视频
On January 11, 2013 jvid视频 was separated from Starz. Therefore, as of the first quarter of 2013 Liberty began presenting Starz as discontinued operations. Liberty acquired its controlling interest in SiriusXM on January 18, 2013 and has applied purchase accounting in consolidating the results of SiriusXM since that date. Prior to the acquisition of Liberty鈥檚 controlling interest, we accounted for our investment in SiriusXM using the equity method.
jvid视频鈥檚 revenue increased $754 million to $789 million in the first quarter. Adjusted OIBDA increased $288 million to $271 million and operating income increased $192 million to $160 million. The increase in revenue, adjusted OIBDA and operating income was primarily due to the acquisition of a controlling interest in SiriusXM as discussed above.
SiriusXM
SiriusXM reported its stand-alone first quarter results on April 30, 2013. For presentation purposes in this release, we include below the results of SiriusXM, as reported by SiriusXM, without regard to the purchase accounting adjustments applied by us for purposes of our financial statements. Liberty believes the presentation of financial results as reported by SiriusXM is useful to investors as the comparability of those results are best understood in the context of SiriusXM鈥檚 historical financial presentation. For a reconciliation of revenue, adjusted OIBDA (as defined by Liberty) and operating income for SiriusXM鈥檚 stand-alone operating results as reported by SiriusXM, to those results as reported by Liberty, see Liberty鈥檚 Form 10-Q for the quarter ended March 31, 2013.
Highlights of SiriusXM鈥檚 earnings release included the following:
- Subscribers grew by 453,000 to a record 24.4 million
- Record revenue of $897 million, up 12%
- Net Income of $124 million, up 15%
- Adjusted EBITDA(2) grew 26% to a record $262 million
- Free Cash Flow guidance increased
- SiriusXM repurchased 209 million shares of common stock
All such amounts are representative of SiriusXM鈥檚 stand-alone operating results and are not indicative of what is included in Liberty鈥檚 financial statements due to certain purchase accounting adjustments resulting from our January 18, 2013 acquisition of SiriusXM. SiriusXM is a separate publicly traded company and additional information about SiriusXM can be obtained through its website and filings with the Securities and Exchange Commission.
Share Repurchases
From February 1, 2013 through April 30, 2013, 0.6 million shares of Series A Liberty Capital common stock (Nasdaq: LMCA) were purchased at an average cost per share of $110.11 for total cash consideration of $71.0 million. After the completion of the Starz separation on January 11, 2013 through April 30, 2013, 1.1 million shares of Series A Liberty Capital common stock (Nasdaq: LMCA) were purchased at an average cost per share of $110.15 for total cash consideration of $123.0 million. Since the reclassification of the original Liberty Capital tracking stock on March 4, 2008 through April 30, 2013, 59.6 million shares have been repurchased at an average cost per share of $34.01 for total cash consideration of $2.0 billion. These repurchases represent 46.1% of the shares outstanding at the time of the introduction of the original Liberty Capital stock. jvid视频 has approximately $327.0 million remaining under its current stock repurchase authorization.
jvid视频 owns interests in a broad range of media, communications and entertainment businesses, including its subsidiaries SiriusXM, Atlanta National League Baseball Club, Inc. and TruePosition, Inc., its interests in Charter Communications, Live Nation Entertainment and Barnes & Noble, and minority equity investments in Time Warner Inc., Time Warner Cable, and Viacom.
FOOTNOTES
听 | 听 | 1) | 听 | jvid视频鈥檚 President and CEO, Greg Maffei, will discuss these highlights and other matters in jvid视频鈥檚 earnings conference call which will begin at 11:00 a.m. (ET) on May 8, 2013. For information regarding how to access the call, please see 鈥淚mportant Notice鈥 later in this document. |
听 | ||||
2) | For definitions of adjusted OIBDA and Adjusted EBITDA (as defined by SiriusXM) and applicable reconciliations see the accompanying schedules. | |||
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NOTES
Unless otherwise noted, the foregoing discussion compares financial information for the three months ended March 31, 2013 to the same period in 2012.
The following financial information with respect to jvid视频鈥檚 equity affiliates and available for sale securities is intended to supplement jvid视频鈥檚 consolidated balance sheet and statement of operations to be included in its Form 10-Q.
Fair Value of Public Holdings |
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(amounts in millions) | 听 | 听 | 12/31/2012 | 听 | 听 | 3/31/2013 | ||
SiriusXM debt and equity(1) | 听 | 听 | $ | 9,621 | 听 | 听 | $ | -- |
Live Nation debt and equity(2) | 494 | 668 | ||||||
Barnes & Noble investment(3) | 262 | 275 | ||||||
Other public holdings(4) | 听 | 825 | 听 | 887 | ||||
Total jvid视频 | 听 | 听 | $ | 11,202 | 听 | 听 | $ | 1,830 |
听 |
(1) | 听 | Represents the fair value of jvid视频鈥檚 debt and equity investments in SiriusXM. In accordance with GAAP, prior to consolidation, jvid视频 accounted for its equity investment in SiriusXM using the equity method of accounting and included this in its consolidated balance sheet at historical carrying value of $2,766 million at December 31, 2012. As previously disclosed, jvid视频 began consolidating SiriusXM in the first quarter of 2013. |
(2) | Represents the fair value of jvid视频鈥檚 debt and equity investments. In accordance with GAAP, jvid视频 accounts for its investment in the equity of Live Nation using the equity method of accounting and includes it in its consolidated balance sheet at its historical carrying value of $406 million and $393 million at December 31, 2012 and March 31, 2013, respectively. | |
(3) | Represents the carrying value of jvid视频鈥檚 preferred equity investment in Barnes & Noble, which is accounted for at fair value. | |
(4) | Represents jvid视频鈥檚 other public holdings which are accounted for at fair value. | |
听 |
Cash and Debt
The following presentation is provided to separately identify cash and liquid investments and debt information.
(amounts in millions) | 听 | 听 | 12/31/2012 | 听 | 听 | 3/31/2013 | ||
Cash and liquid investments(1)(2) | $ | 670 | $ | 1,991 | ||||
Less: Short-term marketable securities | 67 | 42 | ||||||
Less: Long-term marketable securities | 听 | -- | 听 | 49 | ||||
Total jvid视频 Cash (GAAP) | $ | 603 | $ | 1,900 | ||||
听 | ||||||||
Debt: | ||||||||
SiriusXM senior notes(3)(4) | -- | 1,700 | ||||||
SiriusXM exchangeable notes(3)(4) | -- | 491 | ||||||
Other debt | 听 | -- | 听 | 10 | ||||
Total jvid视频 Debt | $ | -- | $ | 2,201 | ||||
Unamortized premium | 听 | -- | 听 | 218 | ||||
Total jvid视频 Debt (GAAP) | $ | -- | $ | 2,419 | ||||
听 |
(1) | 听 | Includes $67 million and $42 million of short-term marketable securities with an original maturity greater than 90 days as of December 31, 2012 and March 31, 2013, respectively. |
(2) | Includes $49 million of marketable securities with an original maturity greater than one year as of March 31, 2013, which is reflected in investments in available-for-sale securities in Liberty鈥檚 condensed consolidated balance sheet. | |
(3) | SiriusXM became a consolidated subsidiary of jvid视频 in the first quarter of 2013. | |
(4) | Outstanding principal amount of Senior Notes and Exchangeable Senior Subordinated Notes with no increase for the premium resulting from purchase accounting. | |
听 |
Total jvid视频 group cash and liquid investments increased $1.3 billion, primarily as a result of $1.2 billion in cash distributed from Starz, net cash acquired from the consolidation of SiriusXM and cash provided by operations during the quarter, primarily at SiriusXM. The cash inflows were partially offset by repurchases of common stock by Liberty and SiriusXM.
Included in consolidated cash and liquid investments is $207 million at SiriusXM. Although SiriusXM is a consolidated subsidiary, they are a separate public company with a significant noncontrolling interest, therefore Liberty may not have ready access to that cash. Total Liberty Media debt increased by $2.2 billion, as a result of debt acquired from the consolidation of SiriusXM.
Important Notice: jvid视频 (Nasdaq: LMCA, LMCB) President and CEO, Greg Maffei, will discuss jvid视频鈥檚 earnings release in a conference call which will begin at 11:00 a.m. (ET) on May 8, 2013. The call can be accessed by dialing (877) 741-4241 or (719) 325-4781 at least 10 minutes prior to the start time. Replays of the conference call can be accessed until 11:00 a.m. (ET) May 15, 2013, by dialing (888) 203-1112 or (719) 457-0820 plus the pass code 1316456. The call will also be broadcast live across the Internet and archived on our website. To access the webcast go to . Links to this press release will also be available on the jvid视频 website.
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential, future financial prospects, new service and product launches, the continuation of our stock repurchase plans, our recent investment in Charter Communications, our consolidation of SiriusXM, and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, possible changes in market acceptance of new products or services, competitive issues, regulatory matters affecting our businesses, continued access to capital on terms acceptable to jvid视频, changes in law and market conditions conducive to stock repurchases. These forward-looking statements speak only as of the date of this presentation, and jvid视频 expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in jvid视频鈥檚 expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of jvid视频, including the most recent Form 10-K and 10-Q, for additional information about jvid视频 and about the risks and uncertainties related to jvid视频鈥檚 business which may affect the statements made in this presentation.
LIBERTY MEDIA CORPORATION | ||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) | ||||||||||||||
听 | ||||||||||||||
听 | 听 | 听 | 听 | 12/31/2012 | 听 | 听 | 听 | 听 | 3/31/2013 | |||||
amounts in millions | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 603 | 1,900 | |||||||||||
Trade and other receivables, net | 25 | 237 | ||||||||||||
Deferred income tax assets | -- | 1,018 | ||||||||||||
Other current assets | 211 | 303 | ||||||||||||
Assets of discontinued operations 鈥 current | 1,372 | 听 | 听 | -- | 听 | |||||||||
Total current assets | 2,211 | 听 | 听 | 3,458 | 听 | |||||||||
Investments in available-for-sale securities and other cost investments | 1,392 | 1,266 | ||||||||||||
Investments in affiliates, accounted for using the equity method | 3,341 | 870 | ||||||||||||
听 | ||||||||||||||
Property and equipment, at cost | 329 | 1,963 | ||||||||||||
Accumulated depreciation | (172 | ) | 听 | (180 | ) | |||||||||
157 | 1,783 | |||||||||||||
Intangible assets not subject to amortization | ||||||||||||||
Goodwill | 200 | 14,215 | ||||||||||||
FCC licenses | -- | 8,600 | ||||||||||||
Other | 144 | 听 | 听 | 1,074 | 听 | |||||||||
344 | 23,889 | |||||||||||||
听 | ||||||||||||||
Intangible assets subject to amortization, net | 108 | 1,039 | ||||||||||||
Other assets, at cost, net of accumulated amortization | 32 | 91 | ||||||||||||
Assets of discontinued operations | 740 | 听 | 听 | -- | 听 | |||||||||
Total assets | $ | 听 | 8,325 | 听 | 听 | 32,396 | 听 | |||||||
听 | ||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ 35 | 631 | ||||||||||||
Current portion of debt | -- | 4 | ||||||||||||
Deferred revenue | 24 | 1,626 | ||||||||||||
Deferred credit on executory contracts | -- | 166 | ||||||||||||
Other current liabilities | 33 | 25 | ||||||||||||
Liabilities of discontinued operations 鈥 current | 293 | 听 | 听 | -- | 听 | |||||||||
Total current liabilities | 385 | 听 | 听 | 2,452 | 听 | |||||||||
听 | ||||||||||||||
Long-term debt | -- | 2,415 | ||||||||||||
Deferred income tax liabilities | 817 | 2,346 | ||||||||||||
Deferred revenue | 37 | 147 | ||||||||||||
Other liabilities | 90 | 285 | ||||||||||||
Liabilities of discontinued operations | 564 | 听 | 听 | -- | 听 | |||||||||
Total liabilities | 1,893 | 听 | 听 | 7,645 | 听 | |||||||||
听 | ||||||||||||||
Equity: | ||||||||||||||
Total stockholders' equity | 6,440 | 14,277 | ||||||||||||
Noncontrolling interests in equity of subsidiaries | (8 | ) | 听 | 10,474 | 听 | |||||||||
Total equity | 6,432 | 听 | 听 | 24,751 | 听 | |||||||||
Commitments and contingencies | 听 | 听 | 听 | |||||||||||
Total liabilities and equity | 听 | $ | 8,325 | 听 | 听 | 32,396 | 听 | |||||||
听 | ||||||||||||||
听 |
LIBERTY MEDIA CORPORATION | |||||||||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) | |||||||||||
听 | |||||||||||
听 | 听 | 听 | 听 | Three months ended | |||||||
3/31/2012 |
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听 |
3/31/2013 |
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Amount in millions | |||||||||||
REVENUE: | |||||||||||
Subscriber revenue | $ | -- | 635 | ||||||||
Other revenue | 听 | 35 | 听 | 154 | 听 | ||||||
TOTAL REVENUE | 35 | 789 | |||||||||
听 | |||||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||
Cost of subscriber services(1) | |||||||||||
Revenue share and royalties | -- | 124 | |||||||||
Programming and content | -- | 54 | |||||||||
Customer service and billing | -- | 66 | |||||||||
Other | -- | 22 | |||||||||
Subscriber acquisition cost | -- | 97 | |||||||||
Other operating expense(1) | 25 | 42 | |||||||||
Selling, general and administrative(1) | 33 | 154 | |||||||||
Depreciation and amortization | 听 | 9 | 听 | 70 | 听 | ||||||
听 | 67 | 听 | 629 | 听 | |||||||
Operating income (loss) |
(32 |
) |
听 |
160 | |||||||
听 | |||||||||||
OTHER INCOME (EXPENSE): | |||||||||||
Interest expense |
(3 |
) |
听 |
(11 | ) | ||||||
Dividend and interest income | 22 | 12 | |||||||||
Share of earnings (losses) of affiliates, net | 12 | 17 | |||||||||
Realized and unrealized gains (losses) on financial instruments, net | 111 | 97 | |||||||||
Gains (losses) on transactions, net | -- | 7,479 | |||||||||
Other, net | 听 | 2 | 听 | (5 | ) | ||||||
听 | 144 | 听 | 7,589 | 听 | |||||||
Earnings (loss) from continuing operations before income taxes | 112 | 7,749 | |||||||||
Income tax (expense) benefit | 听 |
(40 |
) |
听 |
361 | 听 | |||||
Earnings (loss) from continuing operations | 72 | 8,110 | |||||||||
Earnings (loss) from discontinued operations, net of taxes | 听 | 79 | 听 | -- | 听 | ||||||
Net earnings (loss) | 151 | 8,110 | |||||||||
Less net earnings (loss) attributable to the noncontrolling interests | 听 | 1 | 听 | 48 | 听 | ||||||
听 | |||||||||||
Net earnings (loss) attributable to Liberty stockholders | $ | 150 | 听 | 8,062 | 听 | ||||||
听 | |||||||||||
(1) Includes stock based compensation as follows: | |||||||||||
Revenue share and royalties | $ | -- | 3 | ||||||||
Programming and content | -- | 1 | |||||||||
Customer service and billing | -- | 1 | |||||||||
Other operating expense | -- | 3 | |||||||||
Selling, general and administrative | 听 | 6 | 听 | 33 | 听 | ||||||
$ | 6 | 听 | 41 | 听 | |||||||
听 | |||||||||||
听 |
LIBERTY MEDIA CORPORATION | ||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) | ||||||||||||
听 | 听 | 听 | 听 | |||||||||
Three months ended | ||||||||||||
3/31/2012 | 听 | 听 | 3/31/2013 | |||||||||
amounts in millions | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net earnings | $ | 151 | 8,110 | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
(Earnings) loss from discontinued operations | (79 | ) | -- | |||||||||
Depreciation and amortization | 9 | 70 | ||||||||||
Stock-based compensation | 6 | 41 | ||||||||||
Share of (earnings) losses of affiliates, net | (12 | ) | (17 | ) | ||||||||
Realized and unrealized (gains) losses on financial instruments, net | (111 | ) | (97 | ) | ||||||||
Losses (gains) on transactions, net | -- | (7,479 | ) | |||||||||
Deferred income tax expense (benefit) | 31 | (377 | ) | |||||||||
Noncash interest expense | -- | (18 | ) | |||||||||
Other noncash charges (credits), net | 4 | 5 | ||||||||||
Changes in operating assets and liabilities | ||||||||||||
Current and other assets | (7 | ) | 66 | |||||||||
Payables and other liabilities | 116 | 听 | 35 | 听 | ||||||||
Net cash provided (used) by operating activities | 108 | 听 | 339 | 听 | ||||||||
听 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Cash proceeds from dispositions of securities | 87 | -- | ||||||||||
Cash (paid) for acquisitions, net of cash acquired | -- | 408 | ||||||||||
Proceeds (payments) on financial instruments, net | (183 | ) | -- | |||||||||
Investments in and loans to cost and equity investees | (2 | ) | (18 | ) | ||||||||
Repayment of loans by cost and equity investees | 21 | 17 | ||||||||||
Capital expended for property and equipment | (2 | ) | (26 | ) | ||||||||
Net sales (purchases) of short term investments and other marketable securities | (20 | ) | (24 | ) | ||||||||
Net (increase) decrease in restricted cash | 691 | 听 | -- | 听 | ||||||||
Net cash provided (used) by investing activities | 592 | 听 | 357 | 听 | ||||||||
听 | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Repayments of debt | (750 | ) | (1 | ) | ||||||||
Repurchases of Liberty common stock | (79 | ) | (140 | ) | ||||||||
Subsidiary shares repurchased by subsidiary | -- | (466 | ) | |||||||||
Other financing activities, net | -- | 听 | 8 | 听 | ||||||||
Net cash provided (used) by financing activities | (829 | ) | (599 | ) | ||||||||
听 | ||||||||||||
Net cash provided (used) by discontinued operations: | ||||||||||||
Cash provided (used) by operating activities | (14 | ) | -- | |||||||||
Cash provided (used) by investing activities | (11 | ) | -- | |||||||||
Cash provided (used) by financing activities | (1 | ) | 550 | |||||||||
Change in available cash held by discontinued operations | 26 | 听 | 650 | 听 | ||||||||
Net cash provided (used) by discontinued operations | -- | 听 | 1,200 | 听 | ||||||||
Net increase (decrease) in cash and cash equivalents | (129 | ) | 1,297 | |||||||||
Cash and cash equivalents at beginning of period | 970 | 听 | 听 | 603 | 听 | |||||||
Cash and cash equivalents at end of period | $ | 841 | 听 | 听 | 1,900 | 听 | ||||||
听 | ||||||||||||
听 |
NON-GAAP FINANCIAL MEASURES
SCHEDULE 1
This press release includes a presentation of adjusted OIBDA, which is a non-GAAP financial measure, for jvid视频, together with a reconciliation to operating income, as determined under GAAP. Liberty Media defines adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses, excluding all stock based compensation, and excludes from that definition depreciation and amortization, restructuring and impairment charges and legal settlements that are included in the measurement of operating income pursuant to GAAP.
jvid视频 believes adjusted OIBDA is an important indicator of the operational strength and performance of its businesses, including each business鈥 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. Because adjusted OIBDA is used as a measure of operating performance, jvid视频 views operating income as the most directly comparable GAAP measure. Adjusted OIBDA is not meant to replace or supersede operating income or any other GAAP measure, but rather to supplement such GAAP measures in order to present investors with the same information that jvid视频's management considers in assessing the results of operations and performance of its assets. Please see the attached schedules for applicable reconciliations.
The following table provides a reconciliation of adjusted OIBDA for jvid视频 to operating income calculated in accordance with GAAP for the three months ended March 31, 2012, June 30, 2012, September 30, 2012, December 31, 2012 and March 31, 2013, respectively.
QUARTERLY SUMMARY |
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(amounts in millions) | 听 | 听 | 1Q12 | 听 | 听 | 2Q12 | 听 | 听 | 3Q12 | 听 | 听 | 4Q12 | 听 | 听 | 1Q13 | ||||||||||
jvid视频 | |||||||||||||||||||||||||
Revenue | $ | 35 | $ | 135 | $ | 154 | $ | 44 | $ | 789 | |||||||||||||||
听 | |||||||||||||||||||||||||
Adjusted OIBDA | (17 | ) | 17 | 30 | (24 | ) | 271 | ||||||||||||||||||
Depreciation and amortization | (9 | ) | (11 | ) | (13 | ) | (9 | ) | (70 | ) | |||||||||||||||
Stock compensation expense | 听 | (6 | ) | 听 | (5 | ) | 听 | (7 | ) | 听 | (28 | ) | 听 | (41 | ) | ||||||||||
Operating Income (Loss) | $ | (32 | ) | $ | 1 | 听 | $ | 10 | 听 | $ | (61 | ) | $ | 160 | 听 | ||||||||||
听 |
SCHEDULE 2
This press release also includes a presentation of Adjusted EBITDA, which is a non-GAAP financial measure used by SiriusXM, together with a reconciliation to SiriusXM鈥檚 stand-alone net income, as determined under GAAP. SiriusXM defines Adjusted EBITDA as follows: EBITDA is defined as net income before interest and investment income (loss); interest expense, net of amounts capitalized; income tax expense and depreciation and amortization. SiriusXM adjusts EBITDA to remove the impact of other income and expense, loss on extinguishment of debt as well as certain other charges discussed below. This measure is one of the primary non-GAAP financial measures on which SiriusXM (i) evaluates the performance of its businesses, (ii) bases its internal budgets and (iii) compensates management. Adjusted EBITDA is a non-GAAP financial performance measure that excludes (if applicable): (i) certain adjustments as a result of the purchase price accounting for the merger of Sirius and XM, (ii) depreciation and amortization and (iii) share-based payment expense. The purchase price accounting adjustments include: (i) the elimination of deferred revenue associated with the investment in XM Canada, (ii) recognition of deferred subscriber revenues not recognized in purchase price accounting, and (iii) elimination of the benefit of deferred credits on executory contracts, which are primarily attributable to third party arrangements with an OEM and programming providers. SiriusXM believes adjusted EBITDA is a useful measure of the underlying trend of SiriusXM鈥檚 operating performance, which provides useful information about its business apart from the costs associated with its physical plant, capital structure and purchase price accounting. SiriusXM believes investors find this non-GAAP financial measure useful when analyzing its results and comparing its operating performance to the performance of other communications, entertainment and media companies. SiriusXM believes investors use current and projected adjusted EBITDA to estimate its current and prospective enterprise value and to make investment decisions. Because SiriusXM funds and builds-out its satellite radio system through the periodic raising and expenditure of large amounts of capital, its results of operations reflect significant charges for depreciation expense. The exclusion of depreciation and amortization expense is useful given significant variation in depreciation and amortization expense that can result from the potential variations in estimated useful lives, all of which can vary widely across different industries or among companies within the same industry. We also believe the exclusion of share-based payment expense is useful given the significant variation in expense that can result from changes in the fair value as determined using the Black-Scholes-Merton model which varies based on assumptions used for the expected life, expected stock price volatility and risk-free interest rates.
Adjusted EBITDA has certain limitations in that it does not take into account the impact to SiriusXM鈥檚 statements of comprehensive income of certain expenses, including share-based payment expense and certain purchase price accounting for the merger of Sirius and XM. SiriusXM endeavors to compensate for the limitations of the non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the Non-GAAP measure. Investors that wish to compare and evaluate SiriusXM鈥檚 operating results after giving effect for these costs, should refer to net income as disclosed in its consolidated statements of comprehensive income. Since adjusted EBITDA is a non-GAAP financial performance measure, SiriusXM鈥檚 calculation of adjusted EBITDA may be susceptible to varying calculations; may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. The reconciliation of SiriusXM鈥檚 stand-alone net income to adjusted EBITDA is calculated as follows (in thousands):
听 | 听 | 听 | 听 | Unaudited | ||||||||
For the Three Months Ended |
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2013 | 听 | 听 | 2012 | |||||||||
听 | ||||||||||||
Net income (GAAP): | $ | 123,602 | $ | 107,774 | ||||||||
Add back items excluded from Adjusted EBITDA: | ||||||||||||
Purchase price accounting adjustments: | ||||||||||||
Revenues | 1,813 | 1,880 | ||||||||||
Operating expenses | (68,409 | ) | (74,024 | ) | ||||||||
Share-based payment expense (GAAP) | 14,518 | 14,951 | ||||||||||
Depreciation and amortization (GAAP) | 67,018 | 66,117 | ||||||||||
Interest expense, net of amounts capitalized (GAAP) | 46,174 | 76,971 | ||||||||||
Loss on extinguishment of debt and credit facilities, net (GAAP) | - | 9,971 | ||||||||||
Interest and investment (income) loss (GAAP) | (1,638 | ) | 1,142 | |||||||||
Other (income) loss (GAAP) | (247 | ) | 578 | |||||||||
Income tax expense (GAAP) | 听 | 79,040 | 听 | 听 | 2,802 | 听 | ||||||
Adjusted EBITDA | $ | 261,871 | 听 | $ | 208,162 | 听 |
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Courtnee Ulrich, 720-875-5420
Source: jvid视频
Released May 8, 2013