Liberty Media Capital Q1 2010 Earnings Call Transcript

Liberty Media Capital Q1 2010 Earnings Call Transcript
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Liberty Media Capital (CLAPA)

Q1 2010 Earnings Call

Ma 7, 2010 12:00 pm ET

Executives

Gregory Maffei – President, Chief Executive Officer

David Flowers – Senior Vice President, Treasurer

Christopher Shean – Senior Vice President

Michael George – Chief Executive Officer, QVC

Chris Albrecht – Chief Executive Officer Starz

Analysts

James Ratcliffe – Barclays Capital

Barton Crockett – Lazard Capital Markets

Doug Mitchelson – Deutsche Bank

Doug Anmuth – Barclays Capital

Jason Bazinet – Citygroup

David Gober – Morgan Stanley

Matthew Harrigan – Wunderlich Securities

Jeffrey Wlodarczak – Pivotal Research

Presentation

Operator

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Previous Statements by LCAPA
» Liberty Media Corporation Q4 2009 Earnings Call Transcript
» Liberty Media Corporation Q3 2009 Earnings Call Transcript
» Liberty Media Q2 2009 Earnings Call Transcript

Welcome to the Liberty Media Corporation quarterly earnings conference call. This presentation includes certain forward-looking statements within the meaning of the Private Securities and Litigation Reform Act of 1995 including statements about financial guidance, business strategies, market potential, future financial performance, new service and product launches and other matters that are not historical facts.

These forward-looking statements involved many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These forward-looking statements speak only as of the date of this presentation and Liberty Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Liberty Media expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement is based.

On today’s call, we will discuss certain non-GAAP financial measures included adjusted EIBTDA. The required definitions and reconciliations, preliminary notes and schedules can be found at the end of this presentation.

At this time for opening remarks and introductions, I would like to turn the call over to the President and Chief Executive Officer, Mr. Greg Maffei.

Gregory Maffei

Good morning and thank you to all out on the call for joining us today and for your continued interest in Liberty Media. Today, we’ll review the year and the quarter by tracker. We’ll discuss the operating performance at our controlled subsidiaries. We’ll cover transactions and other development.

Liberty’s Controller Chris Shean will discuss the attributed businesses financial performance and liquidity picture for each of those and QVC’s CEO Mike George will discuss operating developments and results at QVC. Starz CEO Chris Albrecht will review recent events there at Starz. Also on the call today we have QVC’s CFO Dan O’Connell, Starz Entertainment President, Bill Meyers, Starz’ CFO Glenn Curtis and several other assembled Liberty senior executives. We’ll all be available for questions after the prepared remarks.

Looking at the first quarter, in general we had excellent and continued momentum from what we experienced in Q4. At Liberty Interactive, QVC experienced a good first quarter with top tier retail revenue results and industry-leading revenue results among home shopping networks.

We continued to expand our margins and we continue to drive internet adaptation and evolution of the business with U.S. QVC.com growing about 24% year over year and globally dot com revenue growing about 23% year over year.

Our e-commerce companies posted 10% revenue growth despite a change in our non-transaction revenue programs that reduced revenue and more dramatically, impacted adjusted OIBIDA. Chris Shean will talk a little bit more about that in detail in a moment.

At Liberty Interactive, we continue to clarify the story, continue to enhance liquidity by selling our shares in Via Sat, GSI and our logoed shares in IAC. We also extended maturities with issuances of $500 million tranches of seven-year bonds and ten-year bonds. We used some of that liquidity for our recently announced Dutch Option Tender for $4 million of our senior debt, senior notes maturing in 2013.

At Liberty Starz, we had good revenue and adjusted OIBIDA results despite a lack of significant CPI adjusters and a programming write down that Chris Albrecht will discuss in a little more detail.

We were very pleased with the response to Spartacus throughout the 13 weeks. I think the script got stronger and the audience grew and was strong. It’s a good example of what exclusive, original programming can do, and we see the positive results in the sequential trend in subscribers that is at least partially a result of that.

There’s a virtuous push/pull cycle with our distribution partners being more apt to feature us because of original programming like Spartacus and our end use consumers being more apt to ask for us because of original programming like Spartacus.

We’re working on the development new and exciting series. Perhaps you’ve read or heard about our coming debut of Pillars of the Earth which will be on in July, the gripping historical novel that was an Oprah Book Club selection and sold over 15 million copies. We think it’s going to be a great event for our Starz subscribers this summer.

At Liberty Capital, Sirius XM posted very strong financial results driven by good operating performance including 171,000 net adds, churn falling down to 2%, being reduced to 2%, and increased conversion, particularly at some of our growing partners on the audio side.

Despite the market correction of the last few days, we have very strong gains there and remain very excited about the business and its opportunities going forward.

We’re also excited about the opportunities for and the stock performance of Live Nation. While we had mixed results for our tender, garnering a little less than 1% of the 34 million shares that we sought, it’s a typical Liberty story in that we were somewhat pleased with the 35% to 40% stock price increase because we already own 15% of the stock.

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