Liberty Media Corporation ( LINTA) Q2 2011 Earnings Call August 9, 2011 12:00 am ET Executives Gregory B. Maffei – President and Chief Executive Officer Christopher W. Shean – Senior Vice President, Controller Mike George – President and Chief Executive Officer, QVC, Inc. Chris Albrecht – President and Chief Executive Officer, Starz, LLC Analysts Barton Crockett – Lazard Capital Markets Thomas Eagan – Collins Stewart LLC Thomas Forte – Telsey Advisory Group Richard Greenfield – BTIG Matthew Harrigan – Wunderlich Securities Benjamin Swinburne – Morgan Stanley Ben Mogil – Stifel Nicolaus Presentation Operator
On today’s call, we will discuss certain non-GAAP financial measures, including adjusted EBITDA. The required definitions and reconciliations, preliminary notes and schedules one through three 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. Please go ahead, sir.Gregory B. Maffei Thank you. Good morning to all of you and thank you for joining us today and for your continued interest in Liberty. Today, speaking on the call besides myself, we have Liberty’s controller, Chris Shean; QVC CEO, Mike George; and the Starz CEO, Chris Albrecht, also available to answer questions after our prepared remarks, are several senior Liberty, QVC and Starz executives. So looking at the second quarter highlights, the Liberty Media, right now we continue to pursue the split-off of Liberty Capital and Liberty Starz from Liberty Interactive. Counselors for ourselves will appear in front of the Delaware Supreme Court on 14 th of September, we hope to get a favorable ruling and close in Q3. I’d note that the shareholder vote that we previously received is valid until the 23 rd of September. We remain confident that we will be able to close in that timeframe. Looking out at the marketplace, I’d note we’re also well capitalized with cash, low leverage and long maturities on our existing debt to whether the turmoil and hopefully to take advantage of opportunities. Looking now at Liberty Interactive, starting with QVC, which had very solid results and revenue growth in all markets up about 8% in revenue and excluding Italy and the impact of our GECC contract around 8% adjusted OIBDA, as well. In the US, after a relatively slow April, we saw rising demand in May and then again, in June and continuing into July.
We saw local currency growth in Japan, its outstanding now quickly that market has rebounded since the tragedies of the spring.Germany’s results were truly strong and impressive. Mike George will comment more on that as we go forward. And positively we continue to pay down debt reducing the bank credit facility, revolving credit facility at QVC by $117 million in the quarter continuing to drive our leverage down. The e-commerce companies also had good results up about 18% in revenue; outpace in comp score indices for e-commerce growth which were up about 14%. Those results were lead by great performances at BackCountry and Bodybuilding. Looking now at Liberty Starz, we’re very excited yesterday to announce, our partnership with BBC Worldwide, Chris Albrecht will go into that in further detail and discuss how that partnership covers development, production and distribution of original contents. Really, this is the completion in a form of the turbo project about which we've been talking for the last several quarters. Starz also experienced strong revenue and adjusted OBIDA results and increased its subscribers at Starz and Encore by 10% and 3% respectively. Looking lastly at Liberty Capital, Sirius XM posted very strong financial results driven by excellent operating performance and in the quarter with over 21 million subs, solid churn and ARPU results and good expense management led to adjusted EBITDA growth up 20% and they continue to decrease their leverage. I’d also note that Live Nation reported very good results, handily beating estimates with a strong 23% revenue growth for the quarter. So with those highlight comments, let me turn it over to Chris Shean, to talk first about LINTA’s financial results in more detail. Christopher W. Shean Thanks, Greg. Liberty Interactive group's revenue increased 9% in the second quarter while adjusted OIBDA increased 5%. QVC increased total revenue by 8% for the quarter while adjusted OIBDA increased 4%.
Liberty Interactive’s other e-commerce businesses grew revenue 18% for the quarter and adjusted OIBDA grew 29%. The second quarter of 2010 included the results of Lockerz, which is a start up that we have which was deconsolidated in the third quarter of 2010. And if you exclude the results of Lockerz from the numbers adjusted OIBDA increased 11%.Read the rest of this transcript for free on seekingalpha.com