Quarterly report pursuant to Section 13 or 15(d)

Investments In Affiliates Accounted For Using The Equity Method

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Investments In Affiliates Accounted For Using The Equity Method
3 Months Ended
Mar. 31, 2017
Investments in Affiliates Accounted for Using the Equity Method  
Investments In Affiliates Accounted For Using The Equity Method

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8)   Investments in Affiliates Accounted for Using the Equity Method

Liberty has various investments accounted for using the equity method. The following table includes the Company's carrying amount and percentage ownership of the more significant investments in affiliates at March 31, 2017 and the carrying amount at December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2017

 

December 31, 2016

 

 

    

Percentage

    

Fair Value

    

Carrying

    

Carrying

 

 

 

ownership

 

(Level 1)

 

amount

 

amount

 

 

 

dollar amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

 

 

 

 

 

SIRIUS XM Canada

 

37

%

$

196

 

$

165

 

164

 

Total Liberty SiriusXM Group

 

 

 

 

 

 

 

165

 

164

 

 

 

 

 

 

 

 

 

 

 

 

 

Braves Group

 

 

 

 

 

 

 

 

 

 

 

Other

 

various

 

 

NA

 

 

48

 

61

 

Total Braves Group

 

 

 

 

 

 

 

48

 

61

 

 

 

 

 

 

 

 

 

 

 

 

 

Formula One Group

 

 

 

 

 

 

 

 

 

 

 

Live Nation (a)

 

34

%

$

2,115

 

 

721

 

731

 

Other

 

various

 

 

NA

 

 

167

 

161

 

Total Formula One Group

 

 

 

 

 

 

 

888

 

892

 

Consolidated Liberty

 

 

 

 

 

 

$

1,101

 

1,117

 


(a)

See note 10 for details regarding the number and fair value of shares pledged as collateral pursuant to certain margin loan agreements as of March 31, 2017.  

 

The following table presents the Company's share of earnings (losses) of affiliates:

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

 

March 31,

 

 

    

2017

    

2016

 

 

 

amounts in millions

 

Liberty SiriusXM Group

 

 

 

 

 

 

SIRIUS XM Canada

 

$

 3

 

 7

 

Total Liberty SiriusXM Group

 

 

 3

 

 7

 

 

 

 

 

 

 

 

Braves Group

 

 

 

 

 

 

Other

 

 

 3

 

 2

 

Total Braves Group

 

 

 3

 

 2

 

 

 

 

 

 

 

 

Formula One Group

 

 

 

 

 

 

Live Nation

 

 

(15)

 

(17)

 

Other

 

 

 5

 

(4)

 

Total Formula One Group

 

 

(10)

 

(21)

 

Consolidated Liberty

 

$

(4)

 

(12)

 

 

 

SIRIUS XM Canada

 

SIRIUS XM has entered into agreements to provide Sirius XM Canada Holdings Inc. (“SIRIUS XM Canada”) with the right to offer SIRIUS XM satellite radio service in Canada. The various license and services agreements with SIRIUS XM Canada will expire in 2017 and 2020. SIRIUS XM receives a percentage based royalty of 10% and 15% for certain types of subscription revenue earned by SIRIUS XM Canada for the distribution of Sirius and XM platforms, respectively, royalties for activation fees and premium services and reimbursement for other charges. At March 31, 2017, SIRIUS XM has approximately $3 million and $7 million in current and noncurrent related party liabilities, respectively, related to these agreements described above with SIRIUS XM Canada which are recorded in current and noncurrent other liabilities, respectively, in the Company’s condensed consolidated balance sheet.  Additionally, SIRIUS XM has approximately $7 million in current related party assets at March 31, 2017 due to activation fees and streaming and chipset costs for which SIRIUS XM Canada reimburses SIRIUS XM that are recorded in other current assets in the Company’s condensed consolidated balance sheet. SIRIUS XM recorded approximately $12 million and $10 million in revenue for the three months ended March 31, 2017 and 2016, respectively, associated with these various agreements in the other revenue line in the condensed consolidated statements of operations. SIRIUS XM Canada declared dividends to SIRIUS XM of $4 million during each of the three months ended March 31, 2017 and 2016. 

On May 12, 2016, a subsidiary of SIRIUS XM, Sirius XM Radio Inc. (“Sirius XM Radio”), entered into an arrangement agreement (the “Arrangement Agreement”) with SIRIUS XM Canada. Pursuant to the Arrangement Agreement, SIRIUS XM Radio and certain Canadian shareholders will form a new company to acquire shares of SIRIUS XM Canada not already owned by them pursuant to a plan of arrangement (the “Transaction”). In connection with the Transaction, SIRIUS XM Canada’s shareholders will be entitled to elect to receive, for each share of SIRIUS XM Canada held, C$4.50 (U.S.$3.50 as of May 12, 2016) in (i) cash, (ii) shares of SIRIUS XM’s common stock, (iii) a security exchangeable for shares of SIRIUS XM’s common stock, or (iv) a combination thereof; provided that no more than 50% of the total consideration in the Transaction (or up to 35 million shares) will be issued in SIRIUS XM common stock and exchangeable shares. All of the obligations of SIRIUS XM Radio under the Arrangement Agreement are guaranteed by SIRIUS XM.

Following the Transaction, SIRIUS XM Radio is expected to hold a 70%  equity interest and 33% voting interest in SIRIUS XM Canada, with the remainder of the voting power and equity interest held by Slaight Communications and Obelysk Media, two of SIRIUS XM Canada’s current Canadian shareholders. SIRIUS XM Radio expects to contribute to SIRIUS XM Canada approximately U.S. $275 million in connection with the Transaction (assuming that all shareholders elect to receive cash in connection with the Transaction), which amount is expected to be used to pay the cash consideration to SIRIUS XM Canada’s shareholders and will be decreased proportionately if shareholders elect to receive consideration in shares of SIRIUS XM common stock or securities exchangeable for SIRIUS XM common stock.

The Transaction has been approved by the shareholders of SIRIUS XM Canada and has received the required court approval and approval by the Canadian Radio-Television and Telecommunications Commission.  The Transaction is expected to close in May 2017.