| | | Part I | | Page | |
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| Item 1. | | Business | | I‑4 | |
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| Item 1A. | | Risk Factors | | I-26 | |
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| Item 1B. | | Unresolved Staff Comments | | I-66 | |
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| Item 1C. | | Cybersecurity | | I-66 | |
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| Item 2. | | Properties | | I-68 | |
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| Item 3. | | Legal Proceedings | | I-68 | |
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| Item 4. | | Mine Safety Disclosures | | I-68 | |
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| | | Part II | | | |
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| Item 5. | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | II‑1 | |
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| Item 6. | | [Reserved] | | II‑3 | |
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| Item 7. | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | II‑4 | |
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| Item 7A. | | Quantitative and Qualitative Disclosures About Market Risk | | II‑25 | |
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| Item 8. | | Financial Statements and Supplementary Data | | II‑25 | |
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| Item 9. | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | II‑25 | |
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| Item 9A. | | Controls and Procedures | | II‑26 | |
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| Item 9B. | | Other Information | | II‑26 | |
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| Item 9C. | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | II‑26 | |
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| | | Part III | | | |
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| Item 10. | | Directors, Executive Officers and Corporate Governance | | III‑1 | |
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| Item 11. | | Executive Compensation | | III‑1 | |
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| Item 12. | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | III‑1 | |
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| Item 13. | | Certain Relationships and Related Transactions, and Director Independence | | III‑1 | |
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| Item 14. | | Principal Accountant Fees and Services | | III‑1 | |
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| | | Part IV | | | |
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| Item 15. | | Exhibits and Financial Statement Schedules | | IV‑1 | |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS
Certain statements in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding business, product and marketing plans, strategies and initiatives; new service offerings; renewal of licenses and authorizations; revenue growth and subscriber trends at Sirius XM Holdings Inc. (“Sirius XM Holdings”); the proposed Transactions (as defined below); our ownership interest in Sirius XM Holdings; the recoverability of goodwill and other long-lived assets; the performance of our equity affiliates; projected sources and uses of cash; the payment of dividends by Sirius XM Holdings; the anticipated non-material impact of certain contingent liabilities related to legal and tax proceedings; and other matters arising in the ordinary course of business. In particular, statements under Item 1. “Business,” Item 1A. “Risk Factors,” Item 2. “Properties,” Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” contain forward-looking statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors (as they relate to our consolidated subsidiaries and equity affiliates) that could cause actual results or events to differ materially from those anticipated:
| ● | the historical financial information of the Liberty SiriusXM Group, the Liberty Formula One Group (the “Formula One Group”) and the Liberty Live Group may not necessarily reflect their results had they been separate companies; |
| ● | our ability to obtain additional financing on acceptable terms and cash in amounts sufficient to service debt and other financial obligations; |
| ● | our and our subsidiaries’ indebtedness could adversely affect operations and could limit the ability of our subsidiaries to react to changes in the economy or our industry; |
| ● | the success of businesses attributed to each of our tracking stock groups and their popularity with audiences; |
| ● | our and Sirius XM Holdings’ ability to realize the benefits of acquisitions or other strategic investments; |
| ● | the impact of weak and uncertain economic conditions on consumer demand for products, services and events offered by our businesses attributed to each of our tracking stock groups; |
| ● | our overlapping directors and management with Qurate Retail, Inc. (“Qurate Retail”), Liberty Broadband Corporation (“Liberty Broadband”), Liberty TripAdvisor Holdings, Inc. (“TripCo”) and Atlanta Braves Holdings, Inc. (“ABH”); |
| ● | the outcome of pending or future litigation; |
| ● | the operational risks of our subsidiaries and business affiliates with operations outside of the United States (“U.S.”); |
| ● | our ability to use net operating loss, disallowed business interest and tax credit carryforwards to reduce future tax payments; |
| ● | the degradation, failure or misuse of our information systems; |
| ● | the ability of our subsidiaries and business affiliates to comply with government regulations, including, without limitation, Federal Communications Commission (“FCC”) requirements, consumer protection laws and competition laws, and adverse outcomes from regulatory proceedings; |
| ● | the regulatory and competitive environment of the industries in which we, and the entities in which we have interests, operate; |
| ● | changes in the nature of key strategic relationships with partners, vendors and joint venturers; |
| ● | the impact of a future pandemic and other public health related risks and events, such as COVID-19, on our customers, vendors and businesses generally; |
| ● | competition faced by Sirius XM Holdings; |
| ● | the ability of Sirius XM Holdings to attract and retain subscribers and listeners; |
| ● | the ability of Sirius XM Holdings to market its services and sell advertising; |
| ● | the ability of Sirius XM Holdings to maintain revenue growth from its advertising products; |
| ● | the ability of Sirius XM Holdings to protect the security of personal information about its customers; |
| ● | the interruption or failure of Sirius XM Holdings’ information technology (“IT”) and communication systems; |
| ● | the impact of the market for music rights on Sirius XM Holdings and the rates Sirius XM Holdings must pay for rights to use musical works; |
| ● | the ability of Sirius XM Holdings to successfully monetize and generate revenue from podcasts and other non-music content; |
| ● | reliance on intellectual property and the ability to protect intellectual property; |
| ● | reliance on third parties; |
| ● | the ability to attract and retain qualified personnel; |
| ● | the impact of our equity method investment in Live Nation Entertainment, Inc. (“Live Nation”) on our net earnings and the net earnings of the Liberty Live Group; |
| ● | termination of or changes in any of the agreements, commitments or policies Formula 1 relies on to operate and the limitations such agreements, commitments and policies impose on Formula 1; |
| ● | challenges by tax authorities in the jurisdictions where Formula 1 operates; |
| ● | changes in tax laws that affect Formula 1 and the Formula One Group; |
| ● | the ability of Formula 1 to expand into new markets; |
| ● | changes in laws and regulations and/or their interpretations related to advertising, media rights and the environment; |
| ● | the relationship between the United Kingdom (“U.K.”) and the European Union (“E.U.”) following Brexit; |
| ● | the establishment of rival motorsports events or other circumstances that impact the competitive position of Formula 1; |
| ● | the impact of cancelations or postponements of events or accidents or terrorist attacks during events; |
| ● | changes in consumer viewing habits and the emergence of new content distribution platforms; |
| ● | fluctuations in currencies against the U.S. dollar; |
| ● | the risks associated with the Company as a whole and our use of tracking stock groups, even if a holder does not own shares of common stock of all of our groups; |
| ● | market confusion that results from misunderstandings about our capital structure; |
| ● | market price of our tracking stocks may be volatile; |
| ● | we may not pay dividends equally to our tracking stocks or at all; |
| ● | our directors’ or officers’ equity ownership may create the appearance of conflicts of interest; |
| ● | geopolitical incidents, accidents, terrorist acts, international conflicts, natural disasters, including the effects of climate change, or other events that cause one or more events to be cancelled or postponed, are not covered by insurance, or cause reputational damage to our subsidiaries and business affiliates; |
| ● | challenges related to assessing the future prospects of tracking stock groups based on past performance; |
| ● | our ability to recognize anticipated benefits from the Split-Off and the Reclassification, each as defined below; |
| ● | our ability to recognize the anticipated benefits from the proposed Transactions; |
| ● | the possibility that we may be unable to obtain stockholder approval required for the Transactions; |
| ● | the possibility that our business may suffer as a result of uncertainty surrounding the Transactions; and |
| ● | the possibility that the Transactions may have unexpected costs. |
These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Annual Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based. When considering such forward-looking statements, you should keep in mind the factors described in Item 1A, “Risk Factors” and other cautionary statements contained in this Annual Report. Such risk factors and statements describe circumstances that could cause actual results to differ materially from those contained in any forward-looking statement.
This Annual Report includes information concerning public companies in which we have controlling and non-controlling interests that file reports and other information with the Securities and Exchange Commission (the “SEC”) in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Information in this Annual Report concerning those companies has been derived from the reports and other information filed by them with the SEC. If you would like further information about these companies, the reports and other information they file with the SEC can be accessed on the Internet website maintained by the SEC at www.sec.gov. Those reports and other information are not incorporated by reference in this Annual Report.
