Quarterly report pursuant to Section 13 or 15(d)

Investments In Affiliates Accounted For Using The Equity Method

v3.21.2
Investments In Affiliates Accounted For Using The Equity Method
9 Months Ended
Sep. 30, 2021
Investments In Affiliates Accounted For Using The Equity Method

(6)   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 September 30, 2021 and the carrying amount at December 31, 2020:

September 30, 2021

December 31, 2020

    

Percentage

    

Fair Value

    

Carrying

    

Carrying

 

ownership

(Level 1)

amount

amount

dollar amounts in millions

Liberty SiriusXM Group

Live Nation (a)(b)

31

%

$

6,347

$

149

163

Sirius XM Canada

70

%

$

NA

648

 

643

Other

NA

77

80

Total Liberty SiriusXM Group

874

886

Braves Group

Other

various

NA

108

94

Total Braves Group

108

94

Formula One Group

Other

 

various

 

NA

 

34

 

38

Total Formula One Group

34

38

Consolidated Liberty

$

1,016

 

1,018

(a) See note 8 for details regarding the number and fair value of shares pledged as collateral as of September 30, 2021 pursuant to Liberty’s margin loan secured by shares of Live Nation (the “Live Nation Margin Loan”).
(b) Due to Live Nation’s significant losses driven by COVID-19, Liberty’s basis in Live Nation was approximately zero as of June 30, 2021. In September 2021, Live Nation completed an offering of approximately 5.2 million shares of its common stock, resulting in a gain on dilution of our investment in Live Nation.

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

Three months ended

Nine months ended

September 30,

September 30,

    

2021

    

2020

    

2021

    

2020

 

amounts in millions

Liberty SiriusXM Group

Live Nation (a)

$

9

(177)

(169)

(321)

Sirius XM Canada

(1)

 

 

6

 

8

Other

(6)

(6)

(18)

(18)

Total Liberty SiriusXM Group

2

(183)

(181)

(331)

Braves Group

Other

9

 

(5)

20

(2)

Total Braves Group

9

(5)

20

(2)

Formula One Group

Live Nation (a)

 

NA

 

NA

 

NA

 

(112)

Other

 

(2)

 

1

 

27

 

3

Total Formula One Group

(2)

1

27

(109)

Consolidated Liberty

$

9

 

(187)

 

(134)

 

(442)

(a) Liberty’s interest in Live Nation was reattributed from the Formula One Group to the Liberty SiriusXM Group effective April 22, 2020.

Sirius XM Canada

As of September 30, 2021, Sirius XM Holdings holds a 70% equity interest and 33% voting interest in Sirius XM Canada Holdings Inc. (“Sirius XM Canada”). Sirius XM Canada is accounted for as an equity method investment as Sirius XM Holdings does not have the ability to direct the most significant activities that impact Sirius XM Canada's economic performance.

Sirius XM Holdings has a loan to Sirius XM Canada in the aggregate amount of $121 million as of September 30, 2021. 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.

Sirius XM Holdings 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 currently pays Sirius XM Holdings 25% of its gross revenue on a monthly basis and pursuant to the Advisory Services Agreement, Sirius XM Canada pays Sirius XM Holdings 5% of its gross revenue on a monthly basis.

Sirius XM Holdings has approximately $10 million in related party current assets as of September 30, 2021. Sirius XM Holdings recorded approximately $26 million and $25 million in revenue for the three months ended September 30, 2021 and 2020, respectively, and $76 million and $73 million in revenue for the nine months ended September 30, 2021 and 2020, respectively, associated with these various agreements. Sirius XM Canada paid gross dividends to Sirius XM Holdings of less than $1 million during both of the three months ended September 30, 2021 and 2020, and $1 million during both of the nine months ended September 30, 2021 and 2020.

SoundCloud

In February 2020, Sirius XM Holdings completed a $75 million investment in Series G Membership Units of SoundCloud Holdings, LLC (“SoundCloud”). The investment in SoundCloud is accounted for as an equity method investment as Sirius XM Holdings does not have the ability to direct the most significant activities that impact SoundCloud's economic performance.

In addition to Sirius XM Holdings’ investment in SoundCloud, Pandora has an agreement with SoundCloud to be its exclusive U.S. ad sales representative. Through this arrangement, Pandora offers advertisers the ability to execute campaigns in the U.S. across the Pandora and SoundCloud listening platforms. Sirius XM Holdings recorded revenue share expense related to this agreement of $15 million and $13 million during the three months ended September 30, 2021 and 2020, respectively, and $42 million and $36 million during the nine months ended September 30, 2021 and 2020, respectively. Sirius XM Holdings also had related party liabilities of $19 million as of September 30, 2021 related to this agreement.