Liberty Media CEO Discusses Q3 2010 Results – Earnings Call Transcript
Liberty Media Corporation (
)
Q3 2010 Earnings Conference Call
November 5, 2010 12:00 PM ET
Executives
Gregory Maffei – President and CEO
Christopher Shean – Controller
Michael George – CEO, QVC
Chris Albrecht – CEO, Starz
Bill Myers – President, Starz Entertainment
Glen Curtis – CFO
Analysts
Barton Crockett – Lazard Capital Markets
Doug Anmuth – Barclays Capital
Tom Egan – Collins Stewart
James Ratcliffe – Barclays Capital
David Gober – Morgan Stanley
Matthew Harrigan – Wunderlich Securities
John Teeker – Maxim
Martin Pyykkonen – Wedge Partners
Murray Arenson – BGB Securities
Presentation
Operator
Compare to:
Previous Statements by LCAPA
»
Liberty Media Capital Q2 2010 Earnings Call Transcript
»
Liberty Media Capital Q1 2010 Earnings Call Transcript
»
Liberty Media Corporation Q4 2009 Earnings Call Transcript
»
Liberty Media Corporation Q3 2009 Earnings Call Transcript
Good day and welcome everyone to the Liberty Media Corporation quarterly earnings conference call. Today’s call is being recorded. This call includes certain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including statements about financial guidance, business strategies, market potential, future financial performance, new service and product launches, the anticipated split off of the Liberty Capital and Liberty Starz Groups 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 and implied by such statements including, without limitation, possible changes in market, acceptance of new products or services, competitive issues, regulatory issues, continued access to capital on terms acceptable to Liberty Media and the satisfaction of the conditions of the post-split off.
These forward looking statements speak only as of the date of this call 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’s 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 including adjusted EBITDA. Required definitions and conciliations (inaudible) schedules 1-2-3 can be found at the end of the 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. Gregory Maffei. Please go ahead, sir.
Gregory Maffei
Thank you very much and thank you all on the call today for joining us and your continued interest in Liberty Media. Today speaking on the call, besides myself, we’ll have our controller Chris Shean; the QVC CEO, Mike George and the Starz CEO, Chris Albrecht. Also assembled here we have several senior Liberty QVC and Starz executives and we’ll all be available to answer questions after the prepared remarks.
So turn to slide three in the Q3 highlights. I think we had another strong quarter with solid operating performance across our businesses led by our strong management teams. We had good progress at the Liberty level, we think towards improving our clarity and moving forward on some structural items.
At Liberty Media we filed the preliminary proxy for the split off of Liberty Capital and Liberty Starz. Prior to the split off, the Time Warner exchangeable debentures, the principal amount of which is $1.1 billion will be reattributed from Liberty Capital to Liberty Interactive along with cash and the stock underlying the exchangeable which is approximately 21.18 TWX shares, 5.5 million TWC shares and 2 million AOL shares.
Looking at Liberty Interactive, QVC again displayed good strength in operations. Revenue was up 7%, adjusted OIBDA was up 8%. Predictably notable was the fact that adjusted OIBDA included $9 million dollars of startup expense for Italy which had not been in the prior year. As you may recall, we launched Italy on October 1
st,
you’ll hear more about all of that from our CEO, Michael George.
The revenue growth attribucacy was impressive in many ways. It outperformed the industries for the mid-market luxury department stores, specialty and discount retailers. And notable, once again, we grew QVC.com’s business, the online portion of our business, much faster than Comscore and the major video commerce competitor as we have for the several last few quarters.
Importantly, we continue to add new names. (Inaudible) stock for future growth and on a structural level, we refinanced QVC’s bad credit facilities, extending maturities, lowering rates and providing us more flexible security.
QVC continues to reduce leverage. Since Q1 2010, LINTA has reduced leverage by almost $1.4 billion dollars. QVC’s leverage ratio at the end of Q3 was approximately 1.9 times. And after the close of the quarter, in fact yesterday, we paid down an additional $250 million dollars against the revolving credit facility although I note we may need to withdraw some of this prior to year-end.
In the LINTA category as well our eCommerce companies posted excellent 19% revenue growth. Once again we outpaced Comscore’s eCommerce growth estimate for Q3 of 9% by a substantial amount.
Looking at Liberty Starz, adjusted OIBDA went down slightly year over year primarily due to the timing of certain marketing and release expenses and original programming expenses. Chris will go into those in further detail, Chris Albrecht. Despite that, we remain comfortable with our 2010 guidance, which we offered up in November of 2009. The guidance range of 3% to 4% growth in revenue and 5% to 10% growth in OIBDA. But I would note, we think that OIBDA growth will be near the low end of the range.
We did also complete a new affiliation agreement with DISH, importantly a multi-year agreement. We increased subscriber accounts both sequentially and year over year versus declined in some of the other premium categories. And we changed the attribution of Starz Media from Liberty Capital to Liberty Starz, better reflecting, in our judgment, how we operate the businesses.
Read the rest of this transcript for free on seekingalpha.com
