Liberty(LLYVK) - 2023 Q4 - Annual Report

Part I Business Overview Liberty Media operates in media and entertainment via Sirius XM, Formula 1, and Live Nation, reflecting segment performance through tracking stocks - Liberty Media's principal businesses include consolidated subsidiaries Sirius XM Holdings and Formula 1, and equity affiliate Live Nation[27] - On July 18, 2023, the Company completed the split-off of its wholly owned subsidiary, Atlanta Braves Holdings, Inc.[30] - On August 3, 2023, the Company reclassified its common stock into three new tracking stocks: Liberty SiriusXM, Liberty Formula One, and Liberty Live common stock[31] - Tracking stock groups (Liberty SiriusXM, Formula One, Liberty Live) are not separate legal entities; holders are stockholders of the parent corporation[33] - The Liberty SiriusXM Group primarily includes Liberty's 83% interest in Sirius XM Holdings, corporate cash, and certain debt obligations[34][46] - The Formula One Group includes Liberty's interest in Formula 1, cash, and Liberty's 2.25% Convertible Senior Notes due 2027[35] - The Liberty Live Group is primarily comprised of Liberty's interest in Live Nation, cash, and certain debt obligations[36] - Sirius XM Holdings operates two audio entertainment businesses: Sirius XM (subscription-based satellite and streaming radio) and Pandora and Off-platform (ad-supported and subscription streaming)[46][50][54] - Formula 1 holds exclusive commercial rights to the FIA Formula One World Championship, generating revenue from race promotion, media rights, and sponsorship arrangements[120][125] - Live Nation Entertainment, Inc. is a leading live entertainment company with segments in Concerts, Ticketing, and Sponsorship & Advertising[149][150][151][152] - Liberty Media's strategy for Formula 1 includes maximizing commercial rights value, augmenting its fanbase, driving growth in key strategic markets, and achieving Net Zero by 2030[149][150] Risk Factors This section outlines significant investment risks, covering company-wide, tracking stock-specific, and proposed SiriusXM Split-Off and Merger risks - Historical financial information of Liberty's tracking stock groups may not reflect their results had they been separate companies[184] - Liberty Media has substantial corporate-level debt of $3.6 billion as of December 31, 2023, with servicing dependent on subsidiary cash flows potentially restricted by covenants[185][186] - The success of businesses like Sirius XM Holdings, Formula 1, and Live Nation is highly dependent on audience popularity, which is difficult to predict[188][190] - Cybersecurity threats, including hacking and data breaches, pose increasing risks to information systems, potentially leading to service disruptions and reputational damage[200][201] - Sirius XM Holdings faces significant competition from traditional radio and streaming services, potentially leading to lower revenue and increased expenses[205][206][209] - A substantial number of Sirius XM service subscribers periodically cancel, and customer retention, especially for promotional or used vehicle sales, is uncertain[228][229][230] - Formula 1's business is highly dependent on the continued popularity of the World Championship, influenced by rival motor sports and economic climate[301] - The proposed Liberty Sirius XM Holdings Split-Off and Merger may not be completed, potentially leading to significant costs and management distraction[381][382][383][386][387] - Liberty's tracking stock structure means holders are common stockholders of the company as a whole, with assets of one group potentially used for another's liabilities[350][357] Unresolved Staff Comments The company has no unresolved staff comments to report - The company has no unresolved staff comments[390] Cybersecurity Liberty Media implements a comprehensive cybersecurity risk management program based on the NIST Framework, with Board oversight and no material incidents to date - Liberty Media's cybersecurity program is designed and assessed based on the NIST Cybersecurity Framework to manage material risks[391][394] - Cybersecurity risks are identified and assessed through monitoring threat environments, vulnerability scanning, and internal/external audits[395] - Mitigation measures include risk assessments, incident detection, vulnerability management, disaster recovery, encryption, and employee training[396] - As of the report date, no cybersecurity threats have materially affected Liberty Media's business strategy or financial condition[399] - The Board of Directors, through its Audit Committee, provides overall risk oversight for cybersecurity, receiving quarterly updates[402] - A cross-functional Information Security Steering Committee (ISSC) provides management oversight for technology and operational risks, including cybersecurity[404] Properties Liberty Media owns its Colorado headquarters, Sirius XM owns and leases various facilities, and Formula 1 leases offices while owning land for the Las Vegas Grand Prix - Liberty Media owns its corporate headquarters in Englewood, Colorado[410] - Sirius XM Holdings owns office, production, and engineering facilities in Washington D.C. and New Jersey, and leases over 1,000 terrestrial repeaters[411] - Formula 1 leases offices and production facilities in England, and the Company owns land and a building for the Las Vegas Grand Prix[412] Legal Proceedings Legal proceedings information is incorporated by reference to note 17 in the consolidated financial statements - Legal proceedings information is detailed in note 17 of the consolidated financial statements[414] Mine Safety Disclosures This item is not applicable to Liberty Media Corporation - Mine Safety Disclosures are not applicable[415] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities This section details Liberty Media's common equity market, including Series B tracking stock prices, dividend policy, and share repurchase program status - Liberty Media's Series A, B, and C Liberty SiriusXM, Liberty Formula One, and Liberty Live common stocks trade on Nasdaq or OTC Markets[417] Series B Liberty SiriusXM Common Stock (LSXMB) High and Low Sales Prices | Year | Quarter | High ($) | Low ($) | | :--- | :------ | :------- | :------ | | 2022 | First | 53.04 | 44.92 | | 2022 | Second | 47.14 | 40.00 | | 2022 | Third | 46.75 | 36.50 | | 2022 | Fourth | 47.43 | 39.03 | | 2023 | First | 42.00 | 25.35 | | 2023 | Second | 31.51 | 26.18 | | 2023 | Third | 34.80 | 22.19 | | 2023 | Fourth | 28.90 | 24.08 | Series B Liberty Formula One Common Stock (FWONB) High and Low Sales Prices | Year | Quarter | High ($) | Low ($) | | :--- | :------ | :------- | :------ | | 2022 | First | 54.75 | 54.75 | | 2022 | Second | 70.26 | 56.65 | | 2022 | Third | 63.00 | 53.59 | | 2022 | Fourth | 48.75 | 47.78 | | 2023 | First | 68.02 | 54.31 | | 2023 | Second | 68.00 | 63.00 | | 2023 | Third | 66.00 | 55.00 | | 2023 | Fourth | 56.02 | 56.02 | Series B Liberty Live Common Stock (LLYVB) High and Low Sales Prices (2023) | Year | Quarter | High ($) | Low ($) | | :--- | :------------------------------------------ | :------- | :------ | | 2023 | Third (from initial quoting Aug 4, 2023) | 34.35 | 28.38 | | 2023 | Fourth | 33.50 | 31.18 | - As of January 31, 2024, Liberty SiriusXM common stock had 893 (Series A), 45 (Series B), and 942 (Series C) record holders[421] - The Company has not paid any cash dividends on its common stock and has no present intention of doing so[422] - As of December 31, 2023, approximately $1.1 billion was available for future share repurchases[425] Reserved This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes Liberty Media's financial performance, condition, and strategic direction, covering consolidated operating results, liquidity, and segment-specific analyses - Liberty Media's most significant operating subsidiary is Sirius XM Holdings, with Formula 1 as a wholly-owned consolidated subsidiary and Live Nation as an equity method investment[429][430][431] - The Split-Off of Atlanta Braves Holdings (July 18, 2023) and the Reclassification of tracking stocks (August 3, 2023) were intended to be tax-free[433][434][436] Consolidated Operating Results (2023 vs. 2022) | Metric | 2023 (millions) | 2022 (millions) | Change (millions) | | :----------------- | :-------------- | :-------------- | :---------------- | | Total Revenue | $12,525 | $12,164 | +$361 | | Operating Income | $2,063 | $2,064 | -$1 | | Adjusted OIBDA | $3,423 | $3,419 | +$4 | - Consolidated revenue increased by $361 million in 2023, driven by a $649 million increase at Formula 1[451] - Consolidated operating income decreased by $1 million in 2023, primarily due to an $82 million decrease in Sirius XM Holdings' operating results, offset by a $153 million increase in Formula 1's operating results[452] Consolidated Other Income and Expense (2023 vs. 2022) | Item | 2023 (millions) | 2022 (millions) | Change (millions) | | :-------------------------------------------- | :-------------- | :-------------- | :---------------- | | Interest expense | $(782) | $(689) | -$(93) | | Share of earnings (losses) of affiliates | $138 | $99 | +$39 | | Realized/unrealized gains (losses) on financial instruments, net | $(323) | $599 | -$(922) | | Gains (losses) on dilution of investment in affiliate | $(4) | $10 | -$(14) | | Other, net | $93 | $110 | -$(17) | - Consolidated interest expense increased by $93 million in 2023, mainly due to higher interest rates on Formula 1's Senior Loan Facility and Liberty SiriusXM Group's margin loan[461] - Net earnings decreased from $2,029 million in 2022 to $962 million in 2023[469] Cash and Cash Equivalents by Group (December 31, 2023) | Group | Cash and Cash Equivalents (millions) | | :------------------- | :----------------------------------- | | Liberty SiriusXM Group | $306 | | Formula One Group | $1,408 | | Liberty Live Group | $305 | | Total Liberty | $2,019 | - Liberty's primary uses of corporate cash in 2023 included $659 million for net debt repayments, $314 million for capital expenditures, and $140 million for equity investments[479] Material Cash Requirements (December 31, 2023) | Category | Total (millions) | Less than 1 year (millions) | 2 - 3 years (millions) | 4 - 5 years (millions) | After 5 years (millions) | | :------------------------------ | :--------------- | :-------------------------- | :--------------------- | :--------------------- | :----------------------- | | Long-term debt | $15,258 | $542 | $1,799 | $5,154 | $7,763 | | Interest payments | $4,388 | $666 | $1,255 | $980 | $1,487 | | Programming and royalty fees | $2,169 | $854 | $989 | $262 | $64 | | Operating and finance lease obligations | $463 | $73 | $147 | $111 | $132 | | Short-term leases | $138 | $65 | $71 | $2 | — | | Other obligations | $864 | $446 | $354 | $52 | $12 | | Total consolidated | $23,280 | $2,646 | $4,615 | $6,561 | $9,458 | Sirius XM Holdings Revenue by Source (2023 vs. 2022) | Revenue Source | 2023 (millions) | 2022 (millions) | Change (%) | | :----------------------- | :-------------- | :-------------- | :--------- | | Sirius XM Subscriber | $6,342 | $6,370 | -0.4% | | Sirius XM Advertising | $169 | $196 | -13.7% | | Sirius XM Equipment | $193 | $189 | +2.1% | | Sirius XM Other | $136 | $150 | -9.3% | | Pandora & Off-platform Subscriber | $524 | $522 | +0.4% | | Pandora & Off-platform Advertising | $1,589 | $1,576 | +0.8% | | Total Sirius XM Holdings | $8,953 | $9,003 | -0.6% | Formula 1 Operating Results (2023 vs. 2022) | Metric | 2023 (millions) | 2022 (millions) | Change (millions) | | :------------------------- | :-------------- | :-------------- | :---------------- | | Primary Formula 1 revenue | $2,560 | $2,107 | +$453 | | Other Formula 1 revenue | $662 | $466 | +$196 | | Total Formula 1 revenue | $3,222 | $2,573 | +$649 | | Operating income (loss) | $392 | $239 | +$153 | | Adjusted OIBDA | $725 | $593 | +$132 | | Number of Events | 22 | 22 | 0 | Quantitative and Qualitative Disclosures About Market Risk Liberty Media faces market risks from stock prices and interest rates, managed through debt mix, interest rate swaps, and equity instruments - Liberty Media is exposed to market risk from changes in stock prices and interest rates due to borrowing and investment activities[541][544] - The company manages interest rate exposure through a mix of fixed and variable rate debt and may use interest rate swap arrangements[542] Debt Composition by Group (December 31, 2023) | Group | Variable rate debt (Principal, millions) | Variable rate debt (Weighted avg interest rate) | Fixed rate debt (Principal, millions) | Fixed rate debt (Weighted avg interest rate) | | :------------------- | :------------------------------------- | :-------------------------------------------- | :------------------------------------ | :------------------------------------------- | | Liberty SiriusXM Group | $1,195 | 7.1% | $9,911 | 4.2% | | Formula One Group | $757 | 7.4% | $2,183 | 4.3% | | Live Group | NA | NA | $1,212 | 2.3% | - As of December 31, 2023, marketable equity securities had a fair value of $113 million; a 10% decrease would reduce this by $11 million[545] Financial Statements and Supplementary Data Consolidated financial statements are included in this item, with schedules filed under Item 15 - Consolidated financial statements are filed under this item, starting on page II-31[546] - Financial statement schedules are filed under Item 15[546] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There are no changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure[547] Controls and Procedures As of December 31, 2023, management concluded disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - As of December 31, 2023, the Company's disclosure controls and procedures were effective to ensure timely and accurate reporting[548] - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2023[550] Other Information No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the fiscal quarter ended December 31, 2023 - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the fiscal quarter ended December 31, 2023[551] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to Liberty Media Corporation - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[552] Notes to Consolidated Financial Statements (1) Basis of Presentation This note outlines the basis for Liberty Media's consolidated financial statements, including subsidiaries, equity affiliates, the 2023 Braves Holdings split-off, and intercompany agreements - Liberty Media's consolidated financial statements include Sirius XM Holdings and Formula 1 as significant subsidiaries, and Live Nation as an equity method investment[600] - Braves Holdings was a subsidiary until its split-off on July 18, 2023, and is not presented as a discontinued operation[601] - Liberty acquired an 83% controlling interest in Sirius XM Holdings on January 18, 2013, and they became part of the same consolidated federal income tax group on November 3, 2021[602][114] - Liberty has intercompany agreements with Qurate Retail, Liberty Broadband, TripCo, and ABH for services, facilities sharing, and tax matters[603][604] Reimbursed Allocated Expenses | Year | Amount (millions) | | :--- | :---------------- | | 2023 | $24 | | 2022 | $21 | | 2021 | $27 | (2) Tracking Stocks This note explains Liberty Media's tracking stock structure (Liberty SiriusXM, Formula One, Live), detailing the 2023 split-off, reclassification, and attributed assets/liabilities - Liberty Media uses tracking stocks (Liberty SiriusXM, Liberty Formula One, Liberty Live) to reflect economic performance, but these are not separate legal entities[608][612] - The Split-Off of Atlanta Braves Holdings occurred on July 18, 2023, and the Reclassification of common stock took place on August 3, 2023[609][610] - As of December 31, 2023, the Liberty SiriusXM Group's primary assets include Liberty's interest in Sirius XM Holdings and $306 million in corporate cash[613] - As of December 31, 2023, the Formula One Group's primary assets include Liberty's interest in Formula 1, $1,408 million in cash, and 2.25% Convertible Senior Notes due 2027[614][616] - As of December 31, 2023, the Liberty Live Group is primarily comprised of Liberty's interest in Live Nation and $305 million in cash[617] - Intergroup interests in the Braves Group were settled and extinguished in connection with the Split-Off through the attribution of ABH Series C common stock[621] (3) Summary of Significant Accounting Policies This note details Liberty Media's significant accounting policies, covering cash, receivables, investments, property, intangibles, revenue recognition, stock-based compensation, income taxes, and recent pronouncements - Cash equivalents are investments readily convertible to cash with maturities of three months or less[626] Changes in Allowance for Credit Losses and Sales Returns | Year | Balance, beginning of period (millions) | Provision charged to expense (millions) | Write-offs, net of recoveries (millions) | Foreign currency translation adjustments (millions) | Balance, end of period (millions) | | :--- | :-------------------------------------- | :-------------------------------------- | :--------------------------------------- | :------------------------------------------------ | :------------------------------ | | 2023 | $14 | $59 | $(56) | — | $17 | | 2022 | $13 | $59 | $(59) | $1 | $14 | | 2021 | $17 | $54 | $(58) | — | $13 | - Marketable equity and debt securities are carried at fair value, with changes reported in realized and unrealized gains/losses; the equity method is used for investments with significant influence[628][629] - Property and equipment are depreciated using the straight-line method over estimated useful lives, with interest on satellite construction funds capitalized[638][639][496] - Goodwill and indefinite-lived intangible assets are tested for impairment at least annually, while amortizable intangible assets are amortized over their useful lives[640][641][645] - Revenue is recognized in accordance with ASC 606, with prepayments recorded as deferred revenue and recognized as services are provided[648][650] Sirius XM Holdings Revenue by Source (2023-2021) | Revenue Source | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :------------- | :-------------- | :-------------- | :-------------- | | Subscriber | $6,866 | $6,892 | $6,614 | | Advertising | $1,758 | $1,772 | $1,730 | | Equipment | $193 | $189 | $201 | | Other | $136 | $150 | $151 | | Total | $8,953 | $9,003 | $8,696 | Formula 1 Revenue by Source (2023-2021) | Revenue Source | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :------------- | :-------------- | :-------------- | :-------------- | | Primary | $2,560 | $2,107 | $1,850 | | Other | $662 | $466 | $286 | | Total | $3,222 | $2,573 | $2,136 | Braves Holdings Revenue by Source (2023-2021) | Revenue Source | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :------------------ | :-------------- | :-------------- | :-------------- | | Baseball | $318 | $535 | $526 | | Mixed-Use Development | $32 | $53 | $42 | | Total | $350 | $588 | $568 | - Sirius XM Holdings' cost of services includes revenue share and royalties, programming and content costs, and customer service and billing expenses[672][673][679] - Subscriber acquisition costs for Sirius XM's satellite radio service include hardware subsidies, device royalties, and commissions[681] - Advertising expense for Liberty Media aggregated $449 million in 2023, $537 million in 2022, and $532 million in 2021, primarily from Sirius XM Holdings[685] Stock-Based Compensation Expense (2023-2021) | Category | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :------------------------------------- | :-------------- | :-------------- | :-------------- | | Cost of Sirius XM Holdings services | $45 | $46 | $45 | | Other operating expense | $46 | $39 | $36 | | Selling, general and administrative | $141 | $152 | $175 | | Total Stock-based compensation | $232 | $237 | $256 | - The Company adopted ASU 2020-06 on January 1, 2022, requiring the if-converted method for diluted EPS and decreasing diluted EPS for Liberty SiriusXM and Liberty Formula One in 2022[693] - Recent accounting pronouncements include ASU 2023-02, ASU 2023-07, and ASU 2023-09, with varying effective dates and ongoing evaluation[717][720][721] (4) Supplemental Disclosures to Consolidated Statements of Cash Flows This note provides supplemental cash flow disclosures, including cash paid for acquisitions, interest, income taxes, and reconciliation of cash and restricted cash Cash Paid for Acquisitions, Interest, and Income Taxes (2023-2021) | Item | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :---------------------------------- | :-------------- | :-------------- | :-------------- | | Cash paid for acquisitions, net of cash acquired | $0 | $136 | $14 | | Cash paid for interest, net of amounts capitalized | $738 | $656 | $607 | | Cash paid for income taxes, net | $203 | $168 | $97 | Cash, Cash Equivalents and Restricted Cash Reconciliation (December 31, 2023-2021) | Item | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :---------------------------------------- | :-------------- | :-------------- | :-------------- | | Cash and cash equivalents | $2,019 | $2,246 | $2,814 | | Restricted cash included in other current assets | $0 | $22 | $88 | | Restricted cash included in other assets | $9 | $8 | $22 | | Total cash, cash equivalents and restricted cash | $2,028 | $2,276 | $2,924 | - Non-cash investing and financing activities in 2023 included $61 million for settlement of debt obligations with equity securities[722] (5) Restructurings Sirius XM Holdings initiated 2023 restructuring, reducing workforce by 8% and incurring $34 million in severance, plus impairments for software projects and vacated leases - In 2023, Sirius XM Holdings reduced its workforce by approximately 475 roles (8%), incurring a $34 million charge for severance[725] - Sirius XM Holdings recorded $15 million in impairments for terminated software projects and $12 million for vacated leased office spaces in 2023[725] - In 2022, Sirius XM Holdings recorded $43 million in restructuring costs for terminated software projects and $16 million for impaired vacated office spaces[727] (6) Assets and Liabilities Measured at Fair Value This note details Liberty Media's assets and liabilities measured at fair value, categorized by GAAP's three-level hierarchy, and presents realized/unrealized gains and losses on financial instruments - Liberty Media's assets and liabilities measured at fair value are categorized into Level 1 and Level 2, with no Level 3 instruments[729] Assets and Liabilities Measured at Fair Value (December 31, 2023 vs. 2022) | Description | 2023 Total (millions) | 2023 Level 1 (millions) | 2023 Level 2 (millions) | 2022 Total (millions) | 2022 Level 1 (millions) | 2022 Level 2 (millions) | | :---------------------- | :-------------------- | :---------------------- | :---------------------- | :-------------------- | :---------------------- | :---------------------- | | Cash equivalents | $1,142 | $1,142 | — | $2,026 | $2,026 | — | | Debt and equity securities | $113 | $113 | — | $80 | $80 | — | | Financial instrument assets | $141 | $117 | $24 | $393 | $86 | $307 | | Debt | $3,059 | — | $3,059 | $3,331 | — | $3,331 | | Financial instrument liabilities | $13 | — | $13 | $0 | — | $0 | Realized and Unrealized Gains (Losses) on Financial Instruments, net (2023-2021) | Item | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :---------------------------------- | :-------------- | :-------------- | :-------------- | | Debt and equity securities | $12 | $(7) | $204 | | Debt measured at fair value | $(259) | $717 | $(886) | | Change in fair value of bond hedges | $(114) | $(236) | $193 | | Other | $38 | $125 | $38 | | Total | $(323) | $599 | $(451) | - Changes in unrealized gains/losses on debt measured at fair value are primarily driven by changes in the fair value of underlying exchangeable shares[464] (7) Investments in Affiliates Accounted for Using the Equity Method This note details Liberty Media's equity method investments, including Sirius XM Canada, Live Nation, and SoundCloud, providing carrying amounts, market values, and summarized financial information Investments in Affiliates (December 31, 2023 vs. 2022) | Affiliate | Percentage ownership | 2023 Fair Value (Level 1, millions) | 2023 Carrying amount (millions) | 2022 Carrying amount (millions) | | :------------------- | :------------------- | :---------------------------------- | :------------------------------ | :------------------------------ | | Sirius XM Canada | 70% | NA | $611 | $597 | | Live Nation (Liberty Live Group) | 30% | $6,519 | $307 | NA | | Other (Liberty SiriusXM Group) | various | NA | $104 | $68 | | Other (Formula One Group) | various | NA | $41 | $34 | | Other (Liberty Live Group) | | NA | $26 | NA | | Consolidated Liberty | | | $1,089 | $952 | Share of Earnings (Losses) of Affiliates (2023-2021) | Affiliate | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :------------------- | :-------------- | :-------------- | :-------------- | | Sirius XM Canada | $2 | $0 | $4 | | Live Nation (Liberty SiriusXM Group) | $127 | $72 | $(235) | | Other (Liberty SiriusXM Group) | $(21) | $(5) | $(22) | | Other (Formula One Group) | $(4) | $0 | $23 | | Live Nation (Liberty Live Group) | $21 | NA | NA | | Other (Liberty Live Group) | $1 | NA | NA | | Other (Braves Group) | $12 | $32 | $30 | | Consolidated Liberty | $138 | $99 | $(200) | Live Nation Consolidated Statements of Operations (2023-2021) | Metric | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :-------------------------------------- | :-------------- | :-------------- | :-------------- | | Revenue | $22,749 | $16,681 | $6,268 | | Operating income (loss) | $1,066 | $732 | $(418) | | Net earnings (loss) attributable to Live Nation stockholders | $563 | $296 | $(651) | - Sirius XM Holdings holds a 70% equity and 33% voting interest in Sirius XM Canada, which paid $1 million in dividends in 2023[747][750] - Sirius XM Holdings made a $75 million investment in SoundCloud in February 2020, with Pandora serving as SoundCloud's exclusive U.S. ad sales representative[751][752] (8) Goodwill and Other Intangible Assets This note details Liberty Media's goodwill and other intangible assets, including indefinite-lived and amortizable assets, amortization expense, and accumulated goodwill impairment losses Changes in Goodwill Carrying Amount (2022-2023) | Segment | Balance at Jan 1, 2022 (millions) | Acquisitions (millions) | Other (millions) | Balance at Dec 31, 2022 (millions) | Split-Off (millions) | Balance at Dec 31, 2023 (millions) | | :----------------- | :-------------------------------- | :---------------------- | :--------------- | :--------------------------------- | :------------------- | :--------------------------------- | | Sirius XM Holdings | $15,112 | $97 | — | $15,209 | — | $15,209 | | Formula 1 | $3,956 | — | — | $3,956 | — | $3,956 | | Other | $180 | — | $(4) | $176 | $(176) | — | | Total | $19,248 | $97 | $(4) | $19,341 | $(176) | $19,165 | - Other intangible assets not subject to amortization include trademarks ($1,242 million) and FCC licenses ($8,600 million) as of December 31, 2023[756] Intangible Assets Subject to Amortization (December 31, 2023 vs. 2022) | Asset Category | 2023 Gross carrying amount (millions) | 2023 Accumulated amortization (millions) | 2023 Net carrying amount (millions) | 2022 Gross carrying amount (millions) | 2022 Accumulated amortization (millions) | 2022 Net carrying amount (millions) | | :-------------------- | :------------------------------------ | :--------------------------------------- | :---------------------------------- | :------------------------------------ | :--------------------------------------- | :---------------------------------- | | FIA Agreement | $3,630 | $(1,304) | $2,326 | $3,630 | $(1,125) | $2,505 | | Customer relationships | $3,054 | $(2,180) | $874 | $3,054 | $(1,936) | $1,118 | | Licensing agreements | $317 | $(243) | $74 | $359 | $(272) | $87 | | Other | $2,512 | $(1,914) | $598 | $2,191 | $(1,613) | $578 | | Total | $9,513 | $(5,641) | $3,872 | $9,234 | $(4,946) | $4,288 | - Amortization expense was $760 million in 2023, $782 million in 2022, and $802 million in 2021[759] Projected Amortization Expense for Next Five Years | Year | Amount (millions) | | :--- | :---------------- | | 2024 | $627 | | 2025 | $575 | | 2026 | $413 | | 2027 | $279 | | 2028 | $202 | - Accumulated goodwill impairment losses totaled $956 million as of December 31, 2023, all related to the Sirius XM Holdings segment[760] (9) Debt This note summarizes Liberty Media's debt obligations, including corporate and subsidiary debt, detailing convertible notes, margin loans, senior notes, 2023 changes, and covenant compliance Debt Summary (December 31, 2023 vs. 2022) | Debt Category | 2023 Outstanding Principal (millions) | 2023 Carrying value (millions) | 2022 Carrying value (millions) | | :------------------------------------------ | :------------------------------------ | :----------------------------- | :----------------------------- | | Liberty SiriusXM Group | | | | | 1.375% Cash Convertible Senior Notes due 2023 | $0 | $0 | $968 | | 3.75% Convertible Senior Notes due 2028 | $575 | $688 | $0 | | 2.125% Exchangeable Senior Debentures due 2048 | $0 | $0 | $382 | | 2.75% Exchangeable Senior Debentures due 2049 | $586 | $574 | $559 | | 0.5% Exchangeable Senior Debentures due 2050 | $0 | $0 | $920 | | Sirius XM Holdings Margin Loan | $695 | $695 | $875 | | Sirius XM Senior Notes (various) | $8,750 | $8,735 | $8,686 | | Sirius XM Incremental Term Loan | $500 | $500 | $500 | | Formula One Group | | | | | 1% Cash Convertible Notes due 2023 | $0 | $0 | $44 | | 2.25% Convertible Senior Notes due 2027 | $475 | $480 | $458 | | Senior Loan Facility | $2,407 | $2,377 | $2,389 | | Liberty Live Group | | | | | 0.5% Exchangeable Senior Debentures due 2050 | $62 | $69 | NA | | 2.375% Exchangeable Senior Debentures due 2053 | $1,150 | $1,248 | NA | | Total Debt | $15,258 | $15,360 | $16,632 | - In 2023, Liberty repurchased $790 million of 1.375% Cash Convertible Senior Notes due 2023 and $387 million of 2.125% Exchangeable Senior Debentures due 2048[765][773] - Liberty issued $575 million of 3.75% Convertible Senior Notes due 2028 and $1.15 billion of 2.375% Exchangeable Senior Debentures due 2053 in 2023[772][778] - Formula 1 refinanced its Senior Loan Facility in November 2022, including a new $725 million Term Loan A, a refinanced $1.7 billion Term Loan B, and a new $500 million revolving credit facility[795] - As of December 31, 2023, Liberty, Sirius XM Holdings, and Formula 1 were in compliance with all debt covenants[796] Fair Value of Sirius XM Holdings Publicly Traded Debt (December 31, 2023) | Debt Instrument | Fair Value (millions) | | :------------------------------------ | :-------------------- | | Sirius XM 3.125% Senior Notes due 2026 | $932 | | Sirius XM 5.0% Senior Notes due 2027 | $1,444 | | Sirius XM 4.0% Senior Notes due 2028 | $1,827 | | Sirius XM 5.50% Senior Notes due 2029 | $1,202 | | Sirius XM 4.125% Senior Notes due 2030 | $1,326 | | Sirius XM 3.875% Senior Notes due 2031 | $1,277 | Annual Principal Maturities of Outstanding Debt (Next Five Years) | Year | Amount (millions) | | :--- | :---------------- | | 2024 | $542 | | 2025 | $43 | | 2026 | $1,756 | | 2027 | $2,069 | | 2028 | $3,085 | (10) Leases This note details Liberty Media's lease accounting for operating and finance leases, including right-of-use assets, liabilities, total lease cost, and future minimum payments - Liberty Media recognizes operating lease right-of-use assets and liabilities based on the present value of future lease payments, excluding short-term leases[801] Components of Lease Expense (2023-2021) | Component | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :-------------------- | :-------------- | :-------------- | :-------------- | | Finance lease cost | $24 | $37 | $41 | | Operating lease cost | $71 | $89 | $89 | | Short-term operating lease cost | $67 | $0 | $0 | | Sublease income | $(3) | $(3) | $(4) | | Total lease cost | $159 | $123 | $126 | Weighted-Average Lease Terms and Discount Rates (2023-2021) | Metric | 2023 | 2022 | 2021 | | :----------------------------------- | :------ | :------ | :------ | | Weighted-average remaining lease term (years): | | | | | Finance leases | 3.0 | 24.4 | 27.7 | | Operating leases | 7.3 | 8.2 | 8.4 | | Weighted-average discount rate: | | | | | Finance leases | 2.3% | 4.5% | 4.7% | | Operating leases | 5.2% | 5.3% | 5.2% | Future Minimum Payments Under Noncancelable Leases (December 31, 2023) | Year | Finance leases (millions) | Operating leases (millions) | | :-------- | :------------------------ | :-------------------------- | | 2024 | $4 | $69 | | 2025 | $6 | $72 | | 2026 | $5 | $64 | | 2027 | $0 | $59 | | 2028 | $0 | $52 | | Thereafter | $0 | $132 | | Total lease payments | $15 | $448 | | Less: implied interest | $0 | $72 | | Present value of lease liabilities | $15 | $376 | (11) Income Taxes This note details Liberty Media's income tax expense, deferred tax assets/liabilities, effective tax rate, unrecognized tax benefits, and the tax sharing agreement with Sirius XM Holdings Income Tax Benefit (Expense) (2023-2021) | Category | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :------- | :-------------- | :-------------- | :-------------- | | Current | $(209) | $(151) | $(86) | | Deferred | $(14) | $(13) | $41 | | Total| $(223) | $(164) | $(45) | - Liberty Media's effective tax rate was 19% in 2023 and 7% in 2022[469] - In 2023, the effective tax rate was lower than the 21% U.S. federal tax rate due to tax credits from alternative energy investments[812] Deferred Income Tax Assets and Liabilities (December 31, 2023 vs. 2022) | Item | 2023 (millions) | 2022 (millions) | | :------------------------ | :-------------- | :-------------- | | Deferred tax assets | $1,507 | $1,696 | | Valuation allowance | $(96) | $(116) | | Net deferred tax assets | $1,411 | $1,580 | | Deferred tax liabilities | $2,884 | $3,096 | | Net deferred tax liabilities | $1,473 | $1,516 | - As of December 31, 2023, the Company had $1,062 million in deferred tax assets for federal, state, and foreign NOLs and tax credit carryforwards[818] Reconciliation of Unrecognized Tax Benefits (2023-2021) | Item | 2023 (millions) | 2022 (millions) | 2021 (millions) | | :------------------------------------ | :-------------- | :-------------- | :-------------- | | Balance at beginning of year | $198 | $179 | $432 | | Decrease for tax positions of prior years | $(60) | $(17) | $(2) | | Increase (decrease) in tax positions for current year | $29 | $31 | $(10) | | Increase in tax positions from prior years | $4 | $5 | $9 | | Settlements with tax authorities | $0 | $0 | $(250) | | Balance at end of year | $171 | $198 | $179 | - As of December 31, 2023, the Company had $171 million in unrecognized tax benefits, which would affect tax expense if recognized[821] - Liberty and Sirius XM Holdings became members of the same consolidated federal income tax group on November 3, 2021, governed by a tax sharing agreement[825] (12) Stockholders' Equity This note details Liberty Media's stockholders' equity, including common stock voting rights, share repurchases, Sirius XM Holdings dividends, and the dissolution of LMAC - Liberty Media's common stock includes Series A (one vote/share), Series B (ten votes/share), and Series C (no votes/share) for each tracking group[830] - The Company did not repurchase any of its common stock during the year ended December 31, 2023[833] Sirius XM Holdings Cash Dividends Paid | Year | Aggregate Amount Paid (millions) | Amount Received by Liberty (millions) | | :--- | :------------------------------- | :------------------------------------ | | 2023 | $383 | $318 | | 2022 | $1,339 | $1,090 | | 2021 | $268 | $210 | - Liberty Media Acquisition Corporation (LMAC) was dissolved in December 2022 after failing to complete an initial business combination[837][840] (13) Related Party Transactions with Officers and Directors This note details CEO Gregory B. Maffei's compensation, including salary, bonuses, and equity awards, along with Chairman John C. Malone's exchange agreement and deferred compensation - Liberty Media's CEO, Gregory B. Maffei, has a five-year employment term (2020-2024) with a $3 million annual base salary, a $5 million one-time cash bonus, and a $17 million annual target cash performance bonus[845] - The CEO received Upfront Equity Awards with an aggregate grant date fair value (GDFV) of $90 million, vesting on December 31, 2023, and December 31, 2024[846] - Beginning in 2020, the CEO receives annual equity awards with an aggregate GDFV of $17.5 million, consisting of time-vested options and/or performance-based restricted stock units[847] - An exchange agreement with Chairman John C. Malone aims to maintain his aggregate voting power at or below 49.5% through Series B and Series C common stock exchanges[850][851][852] - Mr. Malone receives monthly installments from two deferred compensation plans (8% Plan and 13% Plan) and a salary continuation plan, which began in February 2009[856] (14) Stock-Based Compensation This note details Liberty Media's stock-based compensation plans, including grants of restricted stock, RSUs, and stock options, along with adjustments, outstanding awards, and unrecognized compensation costs - Liberty Media grants restricted stock, restricted stock units, and stock options to directors and employees, generally vesting over 1-5 years with 7-10 year terms[857][858] - Option awards were adjusted due to the Formula One Distribution and Reclassification to preserve intrinsic value and exercise price to market price ratio[859][860][863] Liberty Stock Option Grants (2023-2021) | Stock Type / Recipient | 2023 Options Granted (000's) | 2023 Weighted Average GDFV ($) | 2022 Options Granted (000's) | 2022 Weighted Average GDFV ($) | 2021 Options Granted (000's) | 2021 Weighted Average GDFV ($) | | :--------------------------------- | :--------------------------- | :----------------------------- | :--------------------------- | :----------------------------- | :--------------------------- | :----------------------------- | | Series C Liberty SiriusXM (employees/directors) | 19 | 8.98 | 42 | 13.31 | 66 | 14.54 | | Series C Liberty SiriusXM (CEO) | 370 | 10.34 | 212 | 14.45 | 257 | 13.73 | | Series C Liberty Formula One (employees/directors) | 246 | 25.78 | 34 | 23.94 | 55 | 18.79 | | Series C Liberty Formula One (CEO) | 0 | 0 | 181 | 21.31 | 0 | 0 | | Series C Liberty Formula One (Formula 1 employees) | 71 | 30.70 | 86 | 21.31 | 718 | 15.96 | | Series C Liberty Live (employees/directors) | 74 | 13.71 | NA | NA | NA | NA | | Series C Liberty Braves (employees/directors) | 3 | 14.24 | 10 | 12.40 | 23 | 9.93 | | Series C Liberty Braves (CEO) | 0 | 0 | 95 | 9.16 | 0 | 0 | Liberty SiriusXM Series C Options Outstanding (December 31, 2023) | Status | Options (000's) | WAEP ($) | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value (millions) | | :---------------------- | :-------------- | :------- | :-------------------------------------- | :----------------------------------- | | Outstanding at Dec 31, 2023 | 5,863 | 29.13 | 2.8 | $6 | | Exercisable at Dec 31, 2023 | 5,051 | 29.08 | 2.6 | $6 | Liberty Formula One Series C Options Outstanding (December 31, 2023) | Status | Options (000's) | WAEP ($) | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value (millions) | | :---------------------- | :-------------- | :------- | :-------------------------------------- | :----------------------------------- | | Outstanding at Dec 31, 2023 | 6,599 | 37.62 | 3.2 | $169 | | Exercisable at Dec 31, 2023 | 5,717 | 35.94 | 2.9 | $156 | Liberty Live Series C Options Outstanding (December 31, 2023) | Status | Options (000's) | WAEP ($) | Weighted Average Remaining Life (years) | Aggregate Intrinsic Value (millions) | | :---------------------- | :-------------- | :------- | :-------------------------------------- | :----------------------------------- | | Outstanding at Dec 31, 2023 | 1,652 | 42.36 | 3.0 | $3 | | Exercisable at Dec 31, 2023 | 1,348 | 42.86 | 2.6 | $2 | - The aggregate intrinsic value of all options exercised by Liberty employees during 2023 was $43 million[879] - As of December 31, 2023, total unrecognized compensation cost for Liberty's unvested awards was approximately $29 million, to be recognized over 1.7 years[877] - As of December 31, 2023, total unrecognized compensation cost for Sirius XM Holdings' unvested stock options was $423 million, to be recognized over approximately 2.6 years[884] (15) Employee Benefit Plans Liberty Media sponsors a 401(k) Savings Plan with matching contributions; total employer cash contributions were $30 million in 2023 - Liberty Media sponsors the Liberty Media 401(k) Savings Plan, offering employees investment opportunities in company stock and mutual funds[885] Employer Cash Contributions to Employee Benefit Plans | Year | Amount (millions) | | :--- | :---------------- | | 2023 | $30 | | 2022 | $32 | | 2021 | $35 | (16) Other Comprehensive Earnings (Loss) This note outlines the components of accumulated other comprehensive earnings (loss) (AOCI), including foreign currency adjustments, unrealized gains/losses, and tax effects - AOCI includes foreign currency translation adjustments, unrealized holding gains/losses on debt and equity securities, and Liberty's share of affiliates' AOCI[886] Change in Components of Accumulated Other Comprehensive Earnings (Loss) (AOCI) (2021-2023) | Item | Balance at Jan 1, 2021 (millions) | Other comprehensive earnings (loss) attributable to Liberty stockholders (millions) | Balance at Dec 31, 2021 (millions) | Other comprehensive earnings (loss) attributable to Liberty stockholders (millions) | Balance at Dec 31, 2022 (millions) | Other comprehensive earnings (loss) attributable to Liberty stockholders (millions) | Balance at Dec 31, 2023 (millions) | | :---------------------------------- | :-------------------------------- | :-------------------------------------------------------------------------------- | :--------------------------------- | :-------------------------------------------------------------------------------- | :--------------------------------- | :-------------------------------------------------------------------------------- | :--------------------------------- | | Unrealized holding gains (losses) on securities | $(19) | $(1) | $(20) | $18 | $(2) | — | $(2) | | Foreign currency translation adjustment | $(7) | $(4) | $(11) | $(65) | $(76) | $19 | $(57) | | Other | $104 | $(78) | $26 | $13 | $39 | $32 | $71 | | AOCI | $78 | $(83) | $(5) | $(34) | $(39) | $51 | $12 | Tax Effects Related to Components of Other Comprehensive Earnings (Loss) (2023-2021) | Item | Before-tax amount (millions) | Tax (expense) benefit (millions) | Net-of-tax amount (millions) | | :---------------------------------- | :--------------------------- | :------------------------------- | :--------------------------- | | Year ended December 31, 2023: | |