Formula One Group

Good morning and welcome to the Liberty Media 2023 Q2 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star 1 on your telephone keypad. As a reminder, this conference will be recorded on August 4th. I would now like to turn the call over to Shane Kleinstein, Vice President, Investor Relations. Please go ahead.

Thank you and good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q and registration statement on Form S-4, followed by Liberty Media and Atlanta Braves Holdings with the SEC on June 8, 2023. These forward-looking statements speak only as of the date of this call. and Liberty Media and Atlanta Braves Holdings expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media or Atlanta Braves Holdings 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 for Liberty Media, SiriusXM, and Atlanta Braves Holdings, including adjusted OIBDA and adjusted EBITDA. The required definitions and reconciliations for Liberty Media, SiriusXM, and Atlanta Braves Holdings, Schedules 1 through 3, can be found at the end of the earnings press release issued today, which is available on Liberty Media and Atlanta Braves Holdings websites. Now I'd like to turn the call over to Greg Maffei, Liberty's President and CEO.

Thank you. Good morning. Today, speaking in the call, we will also have Formula One's President and CEO, Stefano Domenicali, Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling, Also during Q&A, we will be able to answer questions related to Atlanta Brave Holdings and the Braves management will be available too. Starting with some corporate updates, Atlanta Braves Holdings began trading as a C-Corp on July 19th. We believe this split-off will better highlight value at the Braves and its real estate. For example, the Batter A shares and the K shares are up 38% since the split announced last November. We also settled all of the remaining intergroup interests in connection with this split off. Today marks the first day of trading for our new trackers, and we expect more focused equities, more focused equities, and increased future flexibility will trade better and be easier for investors to follow. Beginning with Liberty Sirius XM, this simplified tracker consists only of an 83% interest in Siri, cash, and debt. And we continue to reduce debt in the second quarter, retiring the remaining $275 million of our two and one-eighth exchangeables for CERI, and having the $1.8 million new battery shares at LSXM exchanged for debt retirement in the near term. We reiterate the focus on rationalizing the CERI and LSXM structures in the near term. Looking at CERI-SXM itself, It reported strong financial results with an improvement over the first quarter, as was expected. We had a sequential improvement in self-pay net ads, and we do expect a positive back half in the aggregate in self-pay net ads. Siri has sustained a historically low churn of 1.5%, and the business is focused on improved efficiency and cost structure, and that will benefit EBITDA in the coming quarters. During their announcement, Siri increased its full-year free cash flow guidance by $50 million up to $1.15 billion. During the quarter, we experienced continued progress on lowering the streaming costs for customer acquisition, and it was down 20% over the prior year. Data shows that this app is a great accelerant for in-car conversion as well, and we are making progress on our next generation SXM mobile app, which will launch this fall. Sirius is maintaining its focus on enhancing its in-car position, and I know EV manufacturers, which are a growth area, are an area of new success for us as demonstrated by our agreement with Volvo. Turning to Formula One Group, at the corporate level, I'd remind you that the assets consist of F1 ownership and the motorsport-related assets we have, including the Vegas property. During the quarter, we effectively repurchased 1.1 million FWANA shares in settling the intergroup interest that were previously held at LSXM for $67.50 a share. At F1 itself, the number of fans engaging with F1 content across the platforms is bigger than ever. Stefano will give you more stats in a moment, but to name a few, we continue to have sellouts at almost all races. The sprint weekends are driving year-over-year growth in viewership. For example, the SPA total audience across race, sprint, shootout, and qualifying was up versus the Belgian GP last year. I'd note we've seen particularly solid growth in the U.S. Viewership on ESPN is up season-to-date versus the 2022 average viewership with strong F1 TV performance as well. The 2023 season has already seen three of the four largest live audiences in F1 history on U.S. TV, including Miami, Monaco, and the Canadian GPs. All but two of our races have averaged more than 1 million viewers, huge numbers for the U.S. market. On the financial side, oil bidder was up slightly quarter over quarter, despite one less race due to improved operating leverage on team payments and freight. And now turning to LVGP, excitement for the race grows as demonstrated by momentum across social platforms. For example, LVGP had over 11 million social impressions and over 1 million engagements in July. The Las Vegas team is pulling together an event of unprecedented complexity and scale. It will be the largest and our argument would be the most premium sporting event of 2023. And it's a view that's a testament to our Super Bowl aspirations for all our Grand Prix events. I am pleased to say preparations are running on schedule. And despite inflationary cost pressures, we expect no change in revenue and profitability assumptions that we laid out previously. We are increasing CapEx estimates for the paddock building and track work, and Brian will go into that in more detail in a moment. We remain confident in the return profile of this incredible project, which will support the incremental capital investment that we are making. I'd note we've also been already receiving inbounds with attractive economics for use of the Paddock building within the next year, and we look forward to sharing those commercial plans once they're finalized. We expect to learn a lot from our inaugural race and look forward to racing Las Vegas for many years to come. Turning now to Liberty Live Group, Live Nation experienced its strongest second quarter ever, and they're confident in continued growth into the balance of the year in 2024. Revenue for the quarter was up 27% and AOI was up 23% over the prior year. Growth was driven by international man, a real opportunity for live. International fans were up 46% and more artists are touring globally. And lastly, on the international front, our Assessa acquisition in Mexico is outperforming expectations. Overall attendance and per fan profitability were both up double digits for the quarter overall at Live Nation. Turning now to the Braves. Now a separate public company, but business as usual is continuing in Braves country. We've seen continued momentum in demand, having sold 56% of our ticket capacity season to date, tied for MOB's best. We've made it to 40 sellouts already, the fastest we've ever hit this milestone in a season of truest. and concession revenue is up season to date despite shorter game times. We announced a jersey patch sponsorship with Quikrete in a multi-year deal, and most importantly, on field, the Braves lead the NL East and the entire MLB. A franchise record eight players were in the All-Star game, including our entire infield. All eight of these players are locked up through 2023 and most even longer. Excuse me, 2025 with most even longer. The battery is also seeing continued growth. Adjusted OIBDA for the mixed-use development was up 18% in the first six months versus the prior year. And with that, I will turn it over to Brian for more on our financial results.