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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM __________ TO ________
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Delaware
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38-3916511
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification Number)
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1221 Avenue of the Americas, 36th Floor
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New York, New York
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10020
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class:
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Name of Each Exchange on Which Registered:
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Common Stock, par value $0.001 per share
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The Nasdaq Global Select Market
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Item No.
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Description
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subscribers under our regular and discounted pricing plans;
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subscribers that have prepaid, including payments made or due from automakers for subscriptions included in the sale or lease price of a vehicle;
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subscribers to our Internet services who do not also have satellite radio subscriptions; and
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certain subscribers to our weather, traffic, data and Backseat TV services.
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an extensive selection of music genres, ranging from rock, pop and hip-hop to country, dance, jazz, Latin and classical;
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live play-by-play sports from major leagues and colleges;
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a multitude of talk and entertainment channels for a variety of audiences;
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a wide range of national, international and financial news; and
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continuous, local traffic reports for 22 metropolitan markets throughout the United States.
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satellites, terrestrial repeaters and other satellite facilities;
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studios; and
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radios.
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the licensing of our satellite systems;
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preventing interference with or to other users of radio frequencies; and
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compliance with FCC rules established specifically for U.S. satellites and satellite radio services.
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Name
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Age
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Position
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James E. Meyer
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59
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Chief Executive Officer
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Scott A. Greenstein
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54
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President and Chief Content Officer
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Dara F. Altman
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55
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Executive Vice President and Chief Administrative Officer
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Stephen Cook
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58
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Executive Vice President, Sales and Automotive
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Patrick L. Donnelly
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52
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Executive Vice President, General Counsel and Secretary
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David J. Frear
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57
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Executive Vice President and Chief Financial Officer
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Enrique Rodriguez
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51
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Executive Vice President, Operations and Products
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Katherine Kohler Thomson
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47
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Executive Vice President, Chief Marketing Officer
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ITEM 1A.
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RISK FACTORS
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•
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the price of our service;
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the health of the economy;
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the production and sale of new vehicles in the United States;
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the rate at which existing self-pay subscribers buy and sell new and used vehicles in the United States;
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our ability to convince owners and lessees of new and previously owned vehicles that include satellite radios to purchase subscriptions to our service;
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•
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the effectiveness of our marketing programs;
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the entertainment value of our programming; and
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actions by our competitors, such as terrestrial radio and other audio entertainment and information providers.
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the value consumers perceive in our service;
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our ability to add and retain compelling programming;
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the increasing competition we experience from terrestrial and Internet radio and other audio entertainment and information providers;
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•
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our ability to increase prices; and
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discounted offers we may make to attract new subscribers and retain existing subscribers.
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degradation and durability of solar panels;
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quality of construction;
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random failure of satellite components, which could result in significant damage to or loss of a satellite;
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amount of fuel the satellite consumes; and
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damage or destruction by electrostatic storms, collisions with other objects in space or other events, such as nuclear detonations, occurring in space.
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•
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manufacturers that build and distribute satellite radios;
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companies that manufacture and sell integrated circuits for satellite radios;
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programming providers and on-air talent;
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vendors that operate our call centers;
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retailers that market and sell satellite radios and promote subscriptions to our services; and
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vendors that have designed or built, and vendors that support or operate, other important elements of our systems.
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•
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increases our vulnerability to general adverse economic and industry conditions;
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requires us to dedicate a portion of our cash flow from operations to payments on indebtedness, reducing the availability of cash flow to fund capital expenditures, marketing and other general corporate activities;
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limits our ability to borrow additional funds;
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limits our flexibility in planning for, or reacting to, changes in our business and the audio entertainment industry; and
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may place us at a competitive disadvantage compared to other competitors.
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Location
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Purpose
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Own/Lease
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New York, NY
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Corporate headquarters and studio/production facilities
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Lease
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New York, NY
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Office facilities
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Lease
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Washington, DC
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Office and studio/production facilities
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Own
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Washington, DC
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Office facilities and data center
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Own
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Lawrenceville, NJ
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Office and technical/engineering facilities
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Lease
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Deerfield Beach, FL
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Office and technical/engineering facilities
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Lease
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Farmington Hills, MI
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Office and technical/engineering facilities
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Lease
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Nashville, TN
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Studio/production facilities
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Lease
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Vernon, NJ
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Technical/engineering facilities
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Own
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Ellenwood, GA
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Technical/engineering facilities
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Lease
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Los Angeles, CA
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Studio/production facilities
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Lease
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Irving, TX
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Office and engineering facilities/call center
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Lease
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High
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Low
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Year Ended December 31, 2012
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First Quarter
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$2.36
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$1.80
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Second Quarter
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$2.41
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$1.78
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Third Quarter
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$2.64
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$1.84
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Fourth Quarter
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$3.01
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$2.55
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Year Ended December 31, 2013
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First Quarter
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$3.25
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$2.95
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Second Quarter
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$3.63
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$2.95
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Third Quarter
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$3.99
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$3.30
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Fourth Quarter
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$4.18
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$3.32
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Period
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Total Number of Shares Purchased
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Average Price Paid Per Share (1)
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
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||||||
October 1, 2013 - October 31, 2013
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—
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$
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—
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—
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$
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2,397,639,899
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November 1, 2013 - November 30, 2013
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43,712,265
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$
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3.66
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43,712,265
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$
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2,237,639,895
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December 1, 2013 - December 31, 2013
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—
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$
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—
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—
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$
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2,237,639,895
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Total
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43,712,265
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$
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3.66
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43,712,265
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$
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2,237,639,895
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(1)
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These amounts include fees and commissions associated with the shares repurchased.
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NASDAQ Telecommunications Index
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S&P 500 Index
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Sirius XM Holdings Inc.
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December 31, 2008
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$100.00
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$100.00
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$100.00
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December 31, 2009
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$148.24
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$123.45
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$500.00
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December 31, 2010
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$154.06
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$139.23
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$1,358.33
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December 31, 2011
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$134.62
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$139.23
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$1,516.67
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December 31, 2012
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$137.31
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$157.90
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$2,408.33
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December 31, 2013
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$170.29
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$204.63
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$2,908.33
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(shares in thousands)
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Column (a) Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
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Column (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
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Column (c) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding Securities Reflected in Column (a))
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Plan Category
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Equity compensation plans approved by security holders
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282,694
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$
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2.43
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82,806
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Equity compensation plans not approved by security holders
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—
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—
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—
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Total
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282,694
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$
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2.43
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82,806
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Sirius XM Holdings Inc.
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As of and for the Years Ended December 31,
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||||||||||||||||||
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2013 (1)
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2012 (2)
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2011
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2010
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2009 (3)
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(in thousands, except per share data)
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Statements of Comprehensive Income Data:
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Total revenue
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$
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3,799,095
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$
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3,402,040
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$
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3,014,524
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$
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2,816,992
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$
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2,472,638
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Net income (loss)
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$
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377,215
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$
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3,472,702
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$
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426,961
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$
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43,055
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$
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(538,226
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)
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Net income (loss) per share – basic
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$
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0.06
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$
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0.55
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$
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0.07
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$
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0.01
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$
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(0.15
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)
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Net income (loss) per share – diluted
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$
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0.06
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$
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0.51
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$
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0.07
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$
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0.01
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$
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(0.15
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)
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Weighted average common shares outstanding – basic
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6,227,646
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4,209,073
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3,744,606
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3,693,259
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3,585,864
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|||||
Weighted average common shares outstanding – diluted
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6,384,791
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6,873,786
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6,500,822
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6,391,071
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3,585,864
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|||||
Cash dividends per share
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$
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—
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$
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0.05
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$
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—
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$
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—
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$
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—
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Balance Sheet Data:
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||||||||||
Cash and cash equivalents
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$
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134,805
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$
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520,945
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$
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773,990
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$
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586,691
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$
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383,489
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Restricted investments
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$
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5,718
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$
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3,999
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$
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3,973
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$
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3,396
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|
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$
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3,400
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Total assets
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$
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8,844,780
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$
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9,054,843
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$
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7,495,996
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$
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7,383,086
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$
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7,322,206
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Long-term debt, net of current portion
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$
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3,093,821
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$
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2,430,986
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$
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3,012,351
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$
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3,021,763
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|
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$
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3,063,281
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Stockholders' equity
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$
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2,745,742
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$
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4,039,565
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$
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704,145
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$
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207,636
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$
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95,522
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(1)
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The selected financial data for 2013 includes the balances and approximately two months of activity related to the acquisition of the connected vehicle business of Agero, Inc. in November 2013.
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(2)
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A special cash dividend was paid during 2012.
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(3)
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The 2009 results and balances reflect the adoption of ASU 2009-15,
Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing
.
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Sirius XM Radio Inc.
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||||||||||||||||||
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As of and for the Years Ended December 31,
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||||||||||||||||||
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2013 (1) (2)
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2012 (3)
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2011
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2010
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2009 (4)
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||||||||||
(in thousands, except per share data)
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||||||||||
Statements of Comprehensive Income Data:
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||||||||||
Total revenue
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$
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3,799,095
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$
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3,402,040
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$
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3,014,524
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$
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2,816,992
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$
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2,472,638
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Net (loss) income attributable to Sirius XM Radio Inc.'s stockholder
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$
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(66,494
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)
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$
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3,472,702
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$
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426,961
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|
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$
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43,055
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$
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(538,226
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)
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Cash dividends per share
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$
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—
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$
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0.05
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|
|
$
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—
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|
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$
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—
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|
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$
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—
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Balance Sheet Data:
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|
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||||||||||
Cash and cash equivalents
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$
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134,805
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|
$
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520,945
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$
|
773,990
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|
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$
|
586,691
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|
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$
|
383,489
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Restricted investments
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$
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5,718
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|
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$
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3,999
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|
|
$
|
3,973
|
|
|
$
|
3,396
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|
|
$
|
3,400
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Total assets
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$
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8,851,496
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|
|
$
|
9,054,843
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|
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$
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7,495,996
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$
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7,383,086
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$
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7,322,206
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Long-term debt, net of current portion
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$
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3,093,821
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$
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2,430,986
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$
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3,012,351
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$
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3,021,763
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|
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$
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3,063,281
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Stockholder equity
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$
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2,301,346
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$
|
4,039,565
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|
|
$
|
704,145
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|
|
$
|
207,636
|
|
|
$
|
95,522
|
|
(1)
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The selected financial data for 2013 includes the balances and approximately two months of activity related to the acquisition of the connected vehicle business of Agero, Inc. in November 2013 and the fair value adjustments for debt and equity related instruments.
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(2)
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Net income per share for Sirius XM is not presented since Sirius XM is a wholly-owned subsidiary of Holdings.
|
(3)
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A special cash dividend was paid during 2012.
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(4)
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The 2009 results and balances reflect the adoption of ASU 2009-15,
Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing
.
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•
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2013 vs. 2012
: For the years ended December 31, 2013 and 2012, subscriber revenue was
$3,284,660
and
$2,962,665
, respectively,
an increase
of
11%
, or
$321,995
. The increase was primarily attributable to a 9% increase in the daily weighted average number of subscribers, the impact of the increase in certain of our subscription rates beginning in January 2012 as more subscribers migrated to the higher rates, and an increase in subscriptions to premium services, premier channels and Internet streaming, as well as the inclusion of connected vehicle subscription revenue in 2013. These increases were partially offset by subscription discounts offered through customer acquisition and retention programs, and an increasing number of lifetime subscription plans that have reached full revenue recognition.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, subscriber revenue was
$2,962,665
and
$2,595,414
, respectively,
an increase
of
14%
, or
$367,251
. The increase was primarily attributable to a 9% increase in daily weighted average number of subscribers, the increase in certain of our subscription rates beginning in January 2012, and an increase in subscriptions to premium services, including premier channels, data services and Internet streaming. The increase was partially offset by subscription discounts offered through customer acquisition and retention programs.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, advertising revenue was
$89,288
and
$82,320
, respectively,
an increase
of
8%
, or
$6,968
. The increase was primarily due to a greater number of advertising spots sold and broadcast, as well as increases in rates charged per spot.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, advertising revenue was
$82,320
and
$73,672
, respectively,
an increase
of
12%
, or
$8,648
. The increase was primarily due to a greater number of advertising spots sold and broadcast, as well as increases in rates charged per spot.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, equipment revenue was
$80,573
and
$73,456
, respectively,
an increase
of
10%
, or
$7,117
. The increase was driven by royalties from higher OEM production, the mix of royalty eligible radios and, to a lesser extent, improved aftermarket subsidies.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, equipment revenue was
$73,456
and
$71,051
, respectively,
an increase
of
3%
, or
$2,405
. The increase was driven by royalties from higher OEM production, offset by lower direct to consumer sales.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, other revenue was
$344,574
and
$283,599
, respectively,
an increase
of
22%
, or
$60,975
. The increase was driven by revenues from the U.S. Music Royalty Fee as the number of subscribers increased and subscribers on the 12.5% rate increased, and higher royalty revenue from Sirius XM Canada.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, other revenue was
$283,599
and
$274,387
, respectively,
an increase
of
3%
, or
$9,212
. The increase was driven by revenues from the U.S. Music Royalty Fee as the number of subscribers increased, and higher royalty revenue from Sirius XM Canada.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, revenue share and royalties were
$677,642
and
$551,012
, respectively,
an increase
of
23%
, or
$126,630
, and
increased
as a percentage of total revenue. The increase was primarily attributable to greater revenues subject to royalty and/or revenue sharing arrangements and a 12.5% increase in the statutory royalty rate for the performance of sound recordings as well as a decrease in the benefit to earnings from the amortization of deferred credits on executory contracts initially recognized in purchase price accounting associated with the Merger.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, revenue share and royalties were
$551,012
and
$471,149
, respectively,
an increase
of
17%
, or
$79,863
, and
increased
as a percentage of total revenue. The increase was primarily attributable to greater revenues subject to royalty and/or revenue sharing arrangements and a 7% increase in the statutory royalty rate for the performance of sound recordings, partially offset by an increase in the benefit to earnings from the amortization of deferred credits on executory contracts initially recognized in purchase price accounting associated with the Merger.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, programming and content expenses were
$290,323
and
$278,997
, respectively,
an increase
of
4%
, or
$11,326
, but
decreased
as a percentage of total revenue. The increase was primarily due to reductions in the benefit to earnings from purchase price accounting adjustments associated with the Merger attributable to the amortization of the deferred credit on acquired programming executory contracts and increased personnel costs.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, programming and content expenses were
$278,997
and
$281,234
, respectively,
a decrease
of
1%
, or
$2,237
, and
decreased
as a percentage of total revenue. The decrease was primarily due to savings in content agreements, partially offset by increases in personnel costs and reductions in the benefit to earnings from purchase price accounting adjustments associated with the Merger attributable to the amortization of the deferred credit on acquired programming executory contracts.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, customer service and billing expenses were
$320,755
and
$294,980
, respectively,
an increase
of
9%
, or
$25,775
, but
remained flat
as a percentage of total revenue. The increase was primarily due to efforts to improve our customer service experience, resulting in higher spend on customer service agents, staffing and training, higher subscriber volume driving increased subscriber contacts, increased bad debt expense and higher technology costs.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, customer service and billing expenses were
$294,980
and
$259,719
, respectively,
an increase
of
14%
, or
$35,261
, but
remained flat
as a percentage of total revenue. The increase was primarily due to longer average handle time per call and higher subscriber volume driving increased subscriber contacts and higher technology costs.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, satellite and transmission expenses were
$79,292
and
$72,615
, respectively,
an increase
of
9%
, or
$6,677
, but
remained flat
as a percentage of total revenue. The increase was primarily due to increased costs associated with our Internet streaming operations.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, satellite and transmission expenses were
$72,615
and
$75,902
, respectively,
a decrease
of
4%
, or
$3,287
, and
decreased
as a percentage of total revenue. The decrease was primarily due to a reduction of satellite in-orbit insurance expense as we elected not to renew insurance policies on certain satellites.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, cost of equipment was
$26,478
and
$31,766
, respectively,
a decrease
of
17%
, or
$5,288
, and
decreased
as a percentage of equipment revenue. The decrease was primarily due to lower average cost per product sold and lower inventory reserves, partially offset by higher direct to consumer volume compared to prior year periods.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, cost of equipment was
$31,766
and
$33,095
, respectively,
a decrease
of
4%
, or
$1,329
, and
decreased
as a percentage of equipment revenue. The decrease was primarily due to lower direct to consumer sales, partially offset by higher inventory reserves.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, subscriber acquisition costs were
$495,610
and
$474,697
, respectively,
an increase
of
4%
, or
$20,913
, but
decreased
as a percentage of total revenue. The increase was primarily a result of higher subsidies related to increased OEM installations and lower benefit to earnings from the amortization of the deferred credit for acquired executory contracts recognized in purchase price accounting associated with the Merger, partially offset by improved OEM subsidy rates per vehicle.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, subscriber acquisition costs were
$474,697
and
$434,482
, respectively,
an increase
of
9%
, or
$40,215
, but
decreased
as a percentage of total revenue. The increase was primarily a result of higher subsidies related to increased OEM installations occurring in advance of acquiring the subscriber, partially offset by improved OEM subsidy rates per vehicle and increases in the benefit to earnings from the amortization of the deferred credit for acquired executory contracts recognized in purchase price accounting associated with the Merger.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, sales and marketing expenses were
$291,024
and
$248,905
, respectively,
an increase
of
17%
, or
$42,119
, and
increased
as a percentage of total revenue. The increase was primarily due to additional subscriber communications and retention programs associated with a greater number of subscribers and promotional trials.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, sales and marketing expenses were
$248,905
and
$222,773
, respectively,
an increase
of
12%
, or
$26,132
, and
remained flat
as a percentage of total revenue. The increase was primarily due to additional subscriber communications and retention programs associated with a greater number of subscribers and promotional trials, and higher OEM cooperative marketing.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, engineering, design and development expenses were
$57,969
and
$48,843
, respectively,
an increase
of
19%
, or
$9,126
, but remained flat as a percentage of total revenue. The increase was driven primarily by higher product development costs, costs related to enhanced subscriber features and functionality for our service, and by the reversal of certain non-recurring engineering charges that were recorded in the second quarter of 2012.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, engineering, design and development expenses were
$48,843
and
$53,435
, respectively,
a decrease
of
9%
, or
$4,592
, and
decreased
as a percentage of total revenue. The decrease was driven primarily by a reversal of certain non-recurring engineering charges, partially offset by higher product development costs, costs related to the development of enhanced subscriber features and functionality for our service and higher personnel costs.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, general and administrative expenses were
$262,135
and
$261,905
, respectively,
an increase
of less than 1%, or
$230
, but
decreased
as a percentage of total revenue. The increase was primarily due to higher information technology costs, offset by lower legal costs.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, general and administrative expenses were
$261,905
and
$238,738
, respectively,
an increase
of
10%
, or
$23,167
, but
remained flat
as a percentage of total revenue. The increase was primarily due to higher personnel costs, including share-based payment expenses, office rent expenses and professional fees, partially offset by lower litigation settlement charges.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, depreciation and amortization expense was
$253,314
and
$266,295
, respectively,
a decrease
of
5%
, or
$12,981
, and
decreased
as a percentage of total revenue. The decrease was driven by certain satellites reaching the end of their estimated service lives, partially offset by additional assets placed in-service.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, depreciation and amortization expense was
$266,295
and
$267,880
, respectively,
a decrease
of
1%
, or
$1,585
, and
decreased
as a percentage of total revenue. The decrease was driven by reductions in the amortization of subscriber relationships and depreciation recognized on assets placed in-service as certain assets reached the end of their estimated service lives.
|
•
|
2013 vs. 2012
: For the years ended December 31, 2013 and 2012, interest expense was
$204,671
and
$265,321
, respectively,
a decrease
of
23%
, or
$60,650
. The decrease was primarily due to lower average interest rates resulting from the redemption or repayment of $2,535,500 of higher interest rate debt throughout 2012 and 2013, which was replaced with $2,650,000 of lower interest rate debt.
|
•
|
2012 vs. 2011
: For the years ended December 31, 2012 and 2011, interest expense was
$265,321
and
$304,938
, respectively,
a decrease
of
13%
, or
$39,617
. The decrease was primarily due to a lower average outstanding debt balance and a mix of outstanding debt with lower interest rates.
|
•
|
2013 vs. 2012
: For the year ended December 31, 2013, loss on extinguishment of debt and credit facilities, net, was
$190,577
. The loss in 2013 was recorded on the repayment and redemption of our 7.625% Senior Notes due 2018 and our 8.75% Senior Notes due 2015. During the year ended December 31, 2012, a
$132,726
loss was recorded on the repayment of our 13% Senior Notes due 2013 and our 9.75% Senior Secured Notes due 2015.
|
•
|
2012 vs. 2011
: For the year ended December 31, 2012, loss on extinguishment of debt and credit facilities, net, was
$132,726
. The loss was recorded on the repayment of our 13% Senior Notes due 2013 and our 9.75% Senior Secured Notes due 2015. During the year ended December 31, 2011, a
$7,206
loss was recorded on the repayment of our 11.25% Senior Secured Notes due 2013 and our 3.25% Convertible Notes due 2011.
|
•
|
2013 vs. 2012
: For the year ended December 31, 2013, interest and investment income was
$6,976
compared to
$716
in 2012. The interest and investment income for 2013 and 2012 was primarily due to our share of Sirius XM Canada's net income, partially offset by the amortization expense related to our equity method intangible assets.
|
•
|
2012 vs. 2011
: For the year ended December 31, 2012, interest and investment income was
$716
compared to
$73,970
in 2011. The interest and investment income for 2012 was primarily due to interest on our investments and our share of Sirius XM Canada's net income, partially offset by the amortization expense related to our equity method intangible assets. The interest and investment income for 2011 was primarily due to income from our interests in Sirius XM Canada due to the realized net gain from the XM Canada and Sirius Canada merger in the second quarter of 2011.
|
•
|
2013 vs. 2012
: For the year ended December 31, 2013, net loss on change in value of derivatives was
$20,393
which resulted from the change in value of the shares to be repurchased under the share repurchase agreement with Liberty Media. We expect to repurchase approximately 92,889,000 shares of common stock from Liberty Media on April 25, 2014 at a price of $3.66 per share. The value of the derivative will fluctuate based on the movement of our stock price. For the years ended December 31, 2012 and 2011, we did not record any losses on change in value of derivatives.
|
•
|
2013 vs. 2012
: For the year ended December 31, 2013, income tax expense was
$259,877
compared to income tax benefit of
$2,998,234
for 2012. Our annual effective tax rate for the year ending December 31, 2013 was 41% primarily as a result of
$9,545
of non-deductible expenses related to the loss on change in value of derivatives. For the year ended December 31, 2012, we released $3,195,651 of valuation allowance due to the cumulative positive evidence that it is more likely than not that our deferred tax assets will be realized.
|
•
|
2012 vs. 2011
: For the year ended December 31, 2012, income tax benefit was
$2,998,234
compared to income tax expense of
$14,234
for 2011. For the year ended December 31, 2012, we released $3,195,651 of valuation allowance due to the cumulative positive evidence that it is more likely than not that our deferred tax assets will be realized.
|
|
|
Unaudited
|
|||||||
|
|
For the Years Ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Beginning subscribers
|
|
23,900,336
|
|
|
21,892,824
|
|
|
20,190,964
|
|
Gross subscriber additions
|
|
10,136,381
|
|
|
9,617,771
|
|
|
8,696,020
|
|
Deactivated subscribers
|
|
(8,477,407
|
)
|
|
(7,610,259
|
)
|
|
(6,994,160
|
)
|
Net additions
|
|
1,658,974
|
|
|
2,007,512
|
|
|
1,701,860
|
|
Ending subscribers
|
|
25,559,310
|
|
|
23,900,336
|
|
|
21,892,824
|
|
Self-pay
|
|
21,081,817
|
|
|
19,570,274
|
|
|
17,908,742
|
|
Paid promotional
|
|
4,477,493
|
|
|
4,330,062
|
|
|
3,984,082
|
|
Ending subscribers
|
|
25,559,310
|
|
|
23,900,336
|
|
|
21,892,824
|
|
Self-pay
|
|
1,511,543
|
|
|
1,661,532
|
|
|
1,221,943
|
|
Paid promotional
|
|
147,431
|
|
|
345,980
|
|
|
479,917
|
|
Net additions
|
|
1,658,974
|
|
|
2,007,512
|
|
|
1,701,860
|
|
Daily weighted average number of subscribers
|
|
24,886,300
|
|
|
22,794,170
|
|
|
20,903,908
|
|
Average self-pay monthly churn
|
|
1.8
|
%
|
|
1.9
|
%
|
|
1.9
|
%
|
New vehicle consumer conversion rate
|
|
44
|
%
|
|
45
|
%
|
|
45
|
%
|
Note: See pages 39 through 45 for glossary.
|
|
|
|
|
|
|
•
|
2013 vs. 2012:
For the
years ended
December 31, 2013
and
2012
, net additions were
1,658,974
and
2,007,512
, respectively, a decrease of
17%
, or
348,538
. The increase in gross subscriber additions was primarily due to increases in new car sales and new subscriptions in previously owned vehicles. These increases were offset in part by a change from a paid trial to an unpaid trial in the fourth quarter of 2013 pursuant to an agreement with an OEM. The increase in deactivated subscribers was due to an increase in paid promotional trial deactivations driven by the growth of paid trial expirations, along with an increase in self-pay deactivations due to an increase in the subscriber base.
|
•
|
2012 vs. 2011:
For the
years ended
December 31, 2012
and
2011
, net additions were
2,007,512
and
1,701,860
, respectively, an increase of
18%
, or
305,652
. The improvement was due to the increase in gross subscriber additions, primarily resulting from higher new vehicle shipments and light vehicle sales, as well as an increase in the number of conversions from unpaid promotional trials and returning subscriber activations, including consumers in previously owned vehicles.
This increase in gross additions was partially offset by an increase in deactivations. The increase in deactivations was primarily due to paid promotional trial deactivations stemming from the growth of paid trials and increased self-pay deactivations from our larger subscriber base.
|
•
|
2013 vs. 2012:
For the
years ended
December 31, 2013
and
2012
, our average self-pay monthly churn rate was
1.8%
and
1.9%
, respectively. The decrease was due to a higher mix of existing subscribers migrating to paid trials in new vehicles which are not included in average self-pay churn.
|
•
|
2012 vs. 2011:
For the
years ended
December 31, 2012
and
2011
, our average self-pay monthly churn rate was
1.9%
.
|
•
|
2013 vs. 2012:
For the
years ended
December 31, 2013
and
2012
, the new vehicle consumer conversion rate was
44%
and
45%
, respectively. The decrease in the new vehicle consumer conversion rate for the twelve month period was primarily due to the mix of sales by OEMs.
|
•
|
2012 vs. 2011:
For the
years ended
December 31, 2012
and
2011
, the new vehicle consumer conversion rate was
45%
.
|
|
Unaudited Adjusted
|
||||||||||
|
For the Years Ended December 31,
|
||||||||||
(in thousands, except for per subscriber amounts)
|
2013
|
|
2012
|
|
2011
|
||||||
ARPU
|
$
|
12.27
|
|
|
$
|
12.00
|
|
|
$
|
11.58
|
|
SAC, per gross subscriber addition
|
$
|
50
|
|
|
$
|
54
|
|
|
$
|
55
|
|
Customer service and billing expenses, per average subscriber
|
$
|
1.07
|
|
|
$
|
1.07
|
|
|
$
|
1.03
|
|
Free cash flow
|
$
|
927,496
|
|
|
$
|
709,446
|
|
|
$
|
415,742
|
|
Adjusted EBITDA
|
$
|
1,166,140
|
|
|
$
|
920,343
|
|
|
$
|
731,018
|
|
Note: See pages 39 through 45 for a reconciliation to GAAP in the accompanying glossary.
|
•
|
2013 vs. 2012
: For the
years ended
December 31, 2013
and
2012
, ARPU was
$12.27
and
$12.00
, respectively. The increase was driven primarily by the contribution of the U.S. Music Royalty Fee, the impact of the increase in certain of our subscription rates beginning in January 2012, and an increase in subscriptions to premium services, partially offset by subscription discounts offered through customer acquisition and retention programs, and lifetime subscription plans that have reached full revenue recognition.
|
•
|
2012 vs. 2011
: For the
years ended
December 31, 2012
and
2011
, ARPU was
$12.00
and
$11.58
, respectively. The increase was driven primarily by the increase in certain of our subscription rates beginning in January 2012, and an increase in subscriptions to premium services, partially offset by subscription discounts offered through customer acquisition and retention programs and a decrease in the contribution from the U.S. Music Royalty Fee.
|
•
|
2013 vs. 2012
: For the
years ended
December 31, 2013
and
2012
, SAC, per gross subscriber addition, was
$50
and
$54
, respectively. The decrease was primarily due to lower subsidies per vehicle.
|
•
|
2012 vs. 2011
: For the
years ended
December 31, 2012
and
2011
, SAC, per gross subscriber addition, was
$54
and
$55
, respectively. The decrease was primarily due to improved OEM subsidy rates per vehicle, partially offset by higher subsidies related to increased OEM installations occurring in advance of acquiring a subscriber.
|
•
|
2013 vs. 2012
: For the
years ended
December 31, 2013
and
2012
, customer service and billing expenses, per average subscriber, were
$1.07
.
|
•
|
2012 vs. 2011
: For the
years ended
December 31, 2012
and
2011
, customer service and billing expenses, per average subscriber, were
$1.07
and
$1.03
, respectively. The increase was primarily due to longer average handle time per call and higher technology costs.
|
•
|
2013 vs. 2012
: For the
years ended
December 31, 2013
and
2012
, free cash flow was
$927,496
and
$709,446
, respectively, an increase of
$218,050
. The increase was primarily driven by higher net cash provided by operating activities from improved operating performance, lower interest payments, and higher collections from subscribers and distributors, partially offset by payments related to the launch of our FM-6 satellite and the purchase of certain long-lead parts for a future satellite.
|
•
|
2012 vs. 2011
: For the
years ended
December 31, 2012
and
2011
, free cash flow was
$709,446
and
$415,742
, respectively, an increase of
$293,704
. The increase was primarily driven by higher net cash provided by operating activities from improved operating performance and higher collections from subscribers and distributors, as well as a decrease in capital expenditures resulting from lower satellite and related launch vehicle construction costs.
|
•
|
2013 vs. 2012
: For the
years ended
December 31, 2013
and
2012
, adjusted EBITDA was
$1,166,140
and
$920,343
, respectively, an increase of
27%
, or
$245,797
. The increase was primarily due to increases in adjusted revenues, partially offset by increases in expenses included in adjusted EBITDA. The increase in adjusted revenues was primarily due to the increase in our subscriber base and certain of our subscription rates. The increase in expenses was primarily driven by higher revenue share and royalties expenses associated with growth in revenues, sales and marketing costs related to subscriber communications and retention marketing, customer service and billing costs related to increased agent training and staffing as well as subscriber volume and subscriber acquisition costs.
|
•
|
2012 vs. 2011
: For the
years ended
December 31, 2012
and
2011
, adjusted EBITDA was
$920,343
and
$731,018
, respectively, an increase of
26%
, or
$189,325
. The increase was primarily due to increases in adjusted revenues, partially offset by increases in expenses included in adjusted EBITDA. The increase in adjusted revenues was primarily due to the increase in our subscriber base and in certain of our subscription rates. The increase in expenses was primarily driven by higher revenue share and royalties expenses associated with growth in revenues, subscriber acquisition costs related to increased gross subscriber additions and subsidies related to increased OEM installations, customer service and billing costs related to longer average handle times and higher subscriber volume, and sales and marketing costs related to subscriber communications and cooperative marketing, partially offset by lower programming and content costs.
|
|
For the Years Ended December 31,
|
|
|
|
|
||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Net cash provided by operating activities
|
$
|
1,102,832
|
|
|
$
|
806,765
|
|
|
$
|
543,630
|
|
|
$
|
296,067
|
|
|
$
|
263,135
|
|
Net cash used in investing activities
|
(700,688
|
)
|
|
(97,319
|
)
|
|
(127,888
|
)
|
|
(603,369
|
)
|
|
30,569
|
|
|||||
Net cash used in financing activities
|
(788,284
|
)
|
|
(962,491
|
)
|
|
(228,443
|
)
|
|
174,207
|
|
|
(734,048
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(386,140
|
)
|
|
(253,045
|
)
|
|
187,299
|
|
|
(133,095
|
)
|
|
(440,344
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
520,945
|
|
|
773,990
|
|
|
586,691
|
|
|
(253,045
|
)
|
|
187,299
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
134,805
|
|
|
$
|
520,945
|
|
|
$
|
773,990
|
|
|
$
|
(386,140
|
)
|
|
$
|
(253,045
|
)
|
|
Unaudited
|
||||||||||
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income (GAAP):
|
$
|
377,215
|
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
Add back items excluded from Adjusted EBITDA:
|
|
|
|
|
|
||||||
Purchase price accounting adjustments:
|
|
|
|
|
|
||||||
Revenues (see pages 41-43)
|
7,251
|
|
|
7,479
|
|
|
10,910
|
|
|||
Operating expenses (see pages 41-43)
|
(207,854
|
)
|
|
(289,278
|
)
|
|
(277,258
|
)
|
|||
Share-based payment expense, net of purchase price accounting adjustments
|
68,876
|
|
|
63,822
|
|
|
53,369
|
|
|||
Depreciation and amortization (GAAP)
|
253,314
|
|
|
266,295
|
|
|
267,880
|
|
|||
Interest expense, net of amounts capitalized (GAAP)
|
204,671
|
|
|
265,321
|
|
|
304,938
|
|
|||
Loss on extinguishment of debt and credit facilities, net (GAAP)
|
190,577
|
|
|
132,726
|
|
|
7,206
|
|
|||
Interest and investment (income) (GAAP)
|
(6,976
|
)
|
|
(716
|
)
|
|
(73,970
|
)
|
|||
Loss on change in value of derivatives (GAAP)
|
20,393
|
|
|
—
|
|
|
—
|
|
|||
Other (income) loss (GAAP)
|
(1,204
|
)
|
|
226
|
|
|
(3,252
|
)
|
|||
Income tax expense (benefit) (GAAP)
|
259,877
|
|
|
(2,998,234
|
)
|
|
14,234
|
|
|||
Adjusted EBITDA
|
$
|
1,166,140
|
|
|
$
|
920,343
|
|
|
$
|
731,018
|
|
|
Unaudited
|
||||||||||
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Subscriber revenue (GAAP)
|
$
|
3,284,660
|
|
|
$
|
2,962,665
|
|
|
$
|
2,595,414
|
|
Add: advertising revenue (GAAP)
|
89,288
|
|
|
82,320
|
|
|
73,672
|
|
|||
Add: other subscription-related revenue (GAAP)
|
290,895
|
|
|
237,868
|
|
|
231,902
|
|
|||
Add: purchase price accounting adjustments
|
—
|
|
|
228
|
|
|
3,659
|
|
|||
|
$
|
3,664,843
|
|
|
$
|
3,283,081
|
|
|
$
|
2,904,647
|
|
Daily weighted average number of subscribers
|
24,886,300
|
|
|
22,794,170
|
|
|
20,903,908
|
|
|||
ARPU
|
$
|
12.27
|
|
|
$
|
12.00
|
|
|
$
|
11.58
|
|
|
Unaudited
|
||||||||||
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Customer service and billing expenses (GAAP)
|
$
|
320,755
|
|
|
$
|
294,980
|
|
|
$
|
259,719
|
|
Less: share-based payment expense, net of purchase price accounting adjustments
|
(2,219
|
)
|
|
(1,847
|
)
|
|
(1,502
|
)
|
|||
Add: purchase price accounting adjustments
|
—
|
|
|
—
|
|
|
18
|
|
|||
|
$
|
318,536
|
|
|
$
|
293,133
|
|
|
$
|
258,235
|
|
Daily weighted average number of subscribers
|
24,886,300
|
|
|
22,794,170
|
|
|
20,903,908
|
|
|||
Customer service and billing expenses, per average subscriber
|
$
|
1.07
|
|
|
$
|
1.07
|
|
|
$
|
1.03
|
|
|
Unaudited
|
||||||||||
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash Flow information
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
1,102,832
|
|
|
$
|
806,765
|
|
|
$
|
543,630
|
|
Net cash used in investing activities
|
$
|
(700,688
|
)
|
|
$
|
(97,319
|
)
|
|
$
|
(127,888
|
)
|
Net cash used in financing activities
|
$
|
(788,284
|
)
|
|
$
|
(962,491
|
)
|
|
$
|
(228,443
|
)
|
Free Cash Flow
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
1,102,832
|
|
|
$
|
806,765
|
|
|
$
|
543,630
|
|
Additions to property and equipment
|
(173,617
|
)
|
|
(97,293
|
)
|
|
(137,429
|
)
|
|||
Purchases of restricted and other investments
|
(1,719
|
)
|
|
(26
|
)
|
|
9,541
|
|
|||
Free cash flow
|
$
|
927,496
|
|
|
$
|
709,446
|
|
|
$
|
415,742
|
|
|
Unaudited
|
||||||||||
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Subscriber acquisition costs (GAAP)
|
$
|
495,610
|
|
|
$
|
474,697
|
|
|
$
|
434,482
|
|
Less: margin from direct sales of radios and accessories (GAAP)
|
(54,095
|
)
|
|
(41,690
|
)
|
|
(37,956
|
)
|
|||
Add: purchase price accounting adjustments
|
64,365
|
|
|
90,503
|
|
|
85,491
|
|
|||
|
$
|
505,880
|
|
|
$
|
523,510
|
|
|
$
|
482,017
|
|
Gross subscriber additions
|
10,136,381
|
|
|
9,617,771
|
|
|
8,696,020
|
|
|||
SAC, per gross subscriber addition
|
$
|
50
|
|
|
$
|
54
|
|
|
$
|
55
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income attributable to Holdings
|
$
|
377,215
|
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
Loss on change in value of derivative for forward contract with Liberty Media included in Holdings' consolidated statements of comprehensive income (a)
|
23,106
|
|
|
—
|
|
|
—
|
|
|||
Loss on change in fair value of 7% Exchangeable Senior Subordinated Notes due 2014 included in Sirius XM's consolidated statements of comprehensive income (b)
|
(466,815
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Sirius XM's sole stockholder
|
$
|
(66,494
|
)
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
(a)
|
The fair value of the Share Repurchase Agreement with Liberty Media is recorded in Holdings' consolidated balance sheet, with changes in fair value recorded in Holdings' statements of comprehensive income. The impact of the Share Repurchase Agreement is excluded from Sirius XM's financial statements as the publicly traded common stock being repurchased by Liberty Media resides at Holdings, effective November 15, 2013.
|
(b)
|
The additional fair value in excess of the carrying amount associated with the
7%
Exchangeable Senior Subordinated Notes due 2014 is recorded in Sirius XM's consolidated balance sheet, with changes in fair value recorded in Sirius XM's statements of comprehensive income. This is eliminated in Holdings' consolidated balance sheets and statements of comprehensive income.
|
|
|
SIRIUS XM HOLDINGS INC.
|
|
|
|
By:
|
/s/ D
AVID
J. F
REAR
|
|
David J. Frear
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ G
REGORY
B. M
AFFEI
|
|
Chairman of the Board of Directors and Director
|
February 4, 2014
|
(Gregory B. Maffei)
|
|
||
/s/ J
AMES
E.
M
EYER
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
February 4, 2014
|
(
James E. Meyer)
|
|
||
/s/ D
AVID
J. F
REAR
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
February 4, 2014
|
(
David J. Frear)
|
|
||
/s/ T
HOMAS
D. B
ARRY
|
|
Senior Vice President and Controller
(Principal Accounting Officer)
|
February 4, 2014
|
(Thomas D. Barry)
|
|
||
/s/ J
OAN
L. A
MBLE
|
|
Director
|
February 4, 2014
|
(Joan L. Amble)
|
|
||
/s/ A
NTHONY
J. B
ATES
|
|
Director
|
February 4, 2014
|
(Anthony J. Bates
)
|
|
||
/s/ G
EORGE
W. B
ODENHEIMER
|
|
Director
|
February 4, 2014
|
(George W. Bodenheimer)
|
|
||
/s/ D
AVID
J. A. F
LOWERS
|
|
Director
|
February 4, 2014
|
(
David J. A. Flowers)
|
|
||
/s/ E
DDY
W. H
ARTENSTEIN
|
|
Director
|
February 4, 2014
|
(Eddy W. Hartenstein)
|
|
||
/s/ J
AMES
P. H
OLDEN
|
|
Director
|
February 4, 2014
|
(James P. Holden)
|
|
||
/s/ E
VAN
D. M
ALONE
|
|
Director
|
February 4, 2014
|
(Evan D
. Malone)
|
|
||
/s/ J
AMES
F. M
OONEY
|
|
Director
|
February 4, 2014
|
(James F. Mooney)
|
|
||
/s/ C
ARL
E. V
OGEL
|
|
Director
|
February 4, 2014
|
(Carl E. Vogel)
|
|
||
/s/ V
ANESSA
A. W
ITTMAN
|
|
Director
|
February 4, 2014
|
(Vanessa A. Wittman)
|
|
||
/s/ D
AVID
Z
ASLAV
|
|
Director
|
February 4, 2014
|
(David Zaslav)
|
|
|
|
SIRIUS XM HOLDINGS INC.
|
|
|
|
SIRIUS XM RADIO INC.
|
|
|
|
|
|
|
/s/ KPMG LLP
|
|
/s/ KPMG LLP
|
|
/s/ KPMG LLP
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Subscriber revenue
|
$
|
3,284,660
|
|
|
$
|
2,962,665
|
|
|
$
|
2,595,414
|
|
Advertising revenue
|
89,288
|
|
|
82,320
|
|
|
73,672
|
|
|||
Equipment revenue
|
80,573
|
|
|
73,456
|
|
|
71,051
|
|
|||
Other revenue
|
344,574
|
|
|
283,599
|
|
|
274,387
|
|
|||
Total revenue
|
3,799,095
|
|
|
3,402,040
|
|
|
3,014,524
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of services:
|
|
|
|
|
|
||||||
Revenue share and royalties
|
677,642
|
|
|
551,012
|
|
|
471,149
|
|
|||
Programming and content
|
290,323
|
|
|
278,997
|
|
|
281,234
|
|
|||
Customer service and billing
|
320,755
|
|
|
294,980
|
|
|
259,719
|
|
|||
Satellite and transmission
|
79,292
|
|
|
72,615
|
|
|
75,902
|
|
|||
Cost of equipment
|
26,478
|
|
|
31,766
|
|
|
33,095
|
|
|||
Subscriber acquisition costs
|
495,610
|
|
|
474,697
|
|
|
434,482
|
|
|||
Sales and marketing
|
291,024
|
|
|
248,905
|
|
|
222,773
|
|
|||
Engineering, design and development
|
57,969
|
|
|
48,843
|
|
|
53,435
|
|
|||
General and administrative
|
262,135
|
|
|
261,905
|
|
|
238,738
|
|
|||
Depreciation and amortization
|
253,314
|
|
|
266,295
|
|
|
267,880
|
|
|||
Total operating expenses
|
2,754,542
|
|
|
2,530,015
|
|
|
2,338,407
|
|
|||
Income from operations
|
1,044,553
|
|
|
872,025
|
|
|
676,117
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense, net of amounts capitalized
|
(204,671
|
)
|
|
(265,321
|
)
|
|
(304,938
|
)
|
|||
Loss on extinguishment of debt and credit facilities, net
|
(190,577
|
)
|
|
(132,726
|
)
|
|
(7,206
|
)
|
|||
Interest and investment income
|
6,976
|
|
|
716
|
|
|
73,970
|
|
|||
Loss on change in value of derivatives
|
(20,393
|
)
|
|
—
|
|
|
—
|
|
|||
Other income (loss)
|
1,204
|
|
|
(226
|
)
|
|
3,252
|
|
|||
Total other expense
|
(407,461
|
)
|
|
(397,557
|
)
|
|
(234,922
|
)
|
|||
Income before income taxes
|
637,092
|
|
|
474,468
|
|
|
441,195
|
|
|||
Income tax (expense) benefit
|
(259,877
|
)
|
|
2,998,234
|
|
|
(14,234
|
)
|
|||
Net income
|
$
|
377,215
|
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
Realized loss on XM Canada investment foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
6,072
|
|
|||
Foreign currency translation adjustment, net of tax
|
(428
|
)
|
|
49
|
|
|
(140
|
)
|
|||
Total comprehensive income
|
$
|
376,787
|
|
|
$
|
3,472,751
|
|
|
$
|
432,893
|
|
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.06
|
|
|
$
|
0.55
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.51
|
|
|
$
|
0.07
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
6,227,646
|
|
|
4,209,073
|
|
|
3,744,606
|
|
|||
Diluted
|
6,384,791
|
|
|
6,873,786
|
|
|
6,500,822
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
(in thousands, except share and per share data)
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
134,805
|
|
|
$
|
520,945
|
|
Accounts receivable, net
|
103,937
|
|
|
106,142
|
|
||
Receivables from distributors
|
88,975
|
|
|
104,425
|
|
||
Inventory, net
|
13,863
|
|
|
25,337
|
|
||
Prepaid expenses
|
110,530
|
|
|
122,157
|
|
||
Related party current assets
|
9,145
|
|
|
13,167
|
|
||
Deferred tax asset
|
937,598
|
|
|
923,972
|
|
||
Other current assets
|
20,160
|
|
|
12,037
|
|
||
Total current assets
|
1,419,013
|
|
|
1,828,182
|
|
||
Property and equipment, net
|
1,594,574
|
|
|
1,571,922
|
|
||
Long-term restricted investments
|
5,718
|
|
|
3,999
|
|
||
Deferred financing fees, net
|
12,604
|
|
|
38,677
|
|
||
Intangible assets, net
|
2,700,062
|
|
|
2,519,610
|
|
||
Goodwill
|
2,204,553
|
|
|
1,815,365
|
|
||
Related party long-term assets
|
30,164
|
|
|
44,954
|
|
||
Long-term deferred tax asset
|
868,057
|
|
|
1,219,256
|
|
||
Other long-term assets
|
10,035
|
|
|
12,878
|
|
||
Total assets
|
$
|
8,844,780
|
|
|
$
|
9,054,843
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
578,333
|
|
|
$
|
587,652
|
|
Accrued interest
|
42,085
|
|
|
33,954
|
|
||
Current portion of deferred revenue
|
1,586,611
|
|
|
1,474,138
|
|
||
Current portion of deferred credit on executory contracts
|
3,781
|
|
|
207,854
|
|
||
Current maturities of long-term debt
|
496,815
|
|
|
4,234
|
|
||
Current maturities of long-term related party debt
|
10,959
|
|
|
—
|
|
||
Related party current liabilities
|
20,320
|
|
|
6,756
|
|
||
Total current liabilities
|
2,738,904
|
|
|
2,314,588
|
|
||
Deferred revenue
|
149,026
|
|
|
159,501
|
|
||
Deferred credit on executory contracts
|
1,394
|
|
|
5,175
|
|
||
Long-term debt
|
3,093,821
|
|
|
2,222,080
|
|
||
Long-term related party debt
|
—
|
|
|
208,906
|
|
||
Related party long-term liabilities
|
16,337
|
|
|
18,966
|
|
||
Other long-term liabilities
|
99,556
|
|
|
86,062
|
|
||
Total liabilities
|
6,099,038
|
|
|
5,015,278
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Convertible perpetual preferred stock, series B-1, par value $0.001 (liquidation preference of $0.001 per share); 50,000,000 authorized and 0 and 6,250,100 shares issued and outstanding at December 31, 2013 and 2012, respectively
|
—
|
|
|
6
|
|
||
Common stock, par value $0.001; 9,000,000,000 shares authorized at December 31, 2013 and 2012; 6,096,220,526 and 5,262,440,085 shares issued and outstanding at December 31, 2013 and 2012, respectively
|
6,096
|
|
|
5,263
|
|
||
Accumulated other comprehensive (loss) income, net of tax
|
(308
|
)
|
|
120
|
|
||
Additional paid-in capital
|
8,674,129
|
|
|
10,345,566
|
|
||
Accumulated deficit
|
(5,934,175
|
)
|
|
(6,311,390
|
)
|
||
Total stockholders’ equity
|
2,745,742
|
|
|
4,039,565
|
|
||
Total liabilities and stockholders’ equity
|
$
|
8,844,780
|
|
|
$
|
9,054,843
|
|
|
Convertible Perpetual
Preferred Stock,
Series B-1
|
|
Common Stock
|
|
|
|
|
|
Treasury Stock
|
|
|
|
|
|||||||||||||||||||||||
(in thousands, except share data)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Additional
Paid-in
Capital
|
|
Shares
|
|
Amount
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||||||||
Balance at January 1, 2011
|
12,500,000
|
|
|
$
|
13
|
|
|
3,933,195,112
|
|
|
$
|
3,933
|
|
|
$
|
(5,861
|
)
|
|
$
|
10,420,604
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(10,211,053
|
)
|
|
$
|
207,636
|
|
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,932
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
426,961
|
|
|
432,893
|
|
|||||||
Issuance of common stock to employees and employee benefit plans, net of forfeitures
|
—
|
|
|
—
|
|
|
1,882,801
|
|
|
2
|
|
|
—
|
|
|
3,480
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,482
|
|
|||||||
Share-based payment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,581
|
|
|||||||
Exercise of options and vesting of restricted stock units
|
—
|
|
|
—
|
|
|
13,401,048
|
|
|
13
|
|
|
—
|
|
|
11,540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,553
|
|
|||||||
Issuance of common stock upon exercise of warrants
|
—
|
|
|
—
|
|
|
7,122,951
|
|
|
7
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Return of shares under share borrow agreements
|
—
|
|
|
—
|
|
|
(202,399,983
|
)
|
|
(202
|
)
|
|
—
|
|
|
202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2011
|
12,500,000
|
|
|
$
|
13
|
|
|
3,753,201,929
|
|
|
$
|
3,753
|
|
|
$
|
71
|
|
|
$
|
10,484,400
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(9,784,092
|
)
|
|
$
|
704,145
|
|
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,472,702
|
|
|
3,472,751
|
|
|||||||
Issuance of common stock to employees and employee benefit plans, net of forfeitures
|
—
|
|
|
—
|
|
|
1,571,175
|
|
|
2
|
|
|
—
|
|
|
3,521
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,523
|
|
|||||||
Share-based payment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,299
|
|
|||||||
Exercise of options
|
—
|
|
|
—
|
|
|
214,199,297
|
|
|
214
|
|
|
—
|
|
|
125,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,909
|
|
|||||||
Cash dividends paid on common shares ($0.05)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(262,387
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(262,387
|
)
|
|||||||
Cash dividends paid on preferred shares on as-converted basis
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64,675
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64,675
|
)
|
|||||||
Conversion of preferred stock to common stock
|
(6,249,900
|
)
|
|
(7
|
)
|
|
1,293,467,684
|
|
|
1,294
|
|
|
—
|
|
|
(1,287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2012
|
6,250,100
|
|
|
$
|
6
|
|
|
5,262,440,085
|
|
|
$
|
5,263
|
|
|
$
|
120
|
|
|
$
|
10,345,566
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,311,390
|
)
|
|
$
|
4,039,565
|
|
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(428
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
377,215
|
|
|
376,787
|
|
|||||||
Share-based payment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,876
|
|
|||||||
Exercise of options and vesting of restricted stock units
|
—
|
|
|
—
|
|
|
32,841,381
|
|
|
32
|
|
|
—
|
|
|
19,396
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,428
|
|
|||||||
Minimum withholding taxes on net share settlement of stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,342
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,342
|
)
|
|||||||
Conversion of preferred stock to common stock
|
(6,250,100
|
)
|
|
(6
|
)
|
|
1,293,509,076
|
|
|
1,293
|
|
|
—
|
|
|
(1,287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Conversion of Exchangeable Notes to common stock
|
—
|
|
|
—
|
|
|
27,687,850
|
|
|
28
|
|
|
—
|
|
|
45,069
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,097
|
|
|||||||
Common stock repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
520,257,866
|
|
|
(1,764,969
|
)
|
|
—
|
|
|
(1,764,969
|
)
|
|||||||
Common stock retired
|
—
|
|
|
—
|
|
|
(520,257,866
|
)
|
|
(520
|
)
|
|
—
|
|
|
(1,764,449
|
)
|
|
(520,257,866
|
)
|
|
1,764,969
|
|
|
—
|
|
|
—
|
|
|||||||
Initial fair value of forward contract
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,300
|
|
|||||||
Balance at December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
6,096,220,526
|
|
|
$
|
6,096
|
|
|
$
|
(308
|
)
|
|
$
|
8,674,129
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,934,175
|
)
|
|
$
|
2,745,742
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
377,215
|
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
253,314
|
|
|
266,295
|
|
|
267,880
|
|
|||
Non-cash interest expense, net of amortization of premium
|
21,698
|
|
|
35,924
|
|
|
39,515
|
|
|||
Provision for doubtful accounts
|
39,016
|
|
|
34,548
|
|
|
33,164
|
|
|||
Amortization of deferred income related to equity method investment
|
(2,776
|
)
|
|
(2,776
|
)
|
|
(2,776
|
)
|
|||
Loss on extinguishment of debt and credit facilities, net
|
190,577
|
|
|
132,726
|
|
|
7,206
|
|
|||
Gain on merger of unconsolidated entities
|
—
|
|
|
—
|
|
|
(75,768
|
)
|
|||
(Gain) loss on unconsolidated entity investments, net
|
(5,865
|
)
|
|
420
|
|
|
6,520
|
|
|||
Dividend received from unconsolidated entity investment
|
22,065
|
|
|
1,185
|
|
|
—
|
|
|||
Loss on disposal of assets
|
351
|
|
|
657
|
|
|
269
|
|
|||
Loss on change in value of derivative
|
20,393
|
|
|
—
|
|
|
—
|
|
|||
Share-based payment expense
|
68,876
|
|
|
63,822
|
|
|
53,190
|
|
|||
Deferred income taxes
|
259,787
|
|
|
(3,001,818
|
)
|
|
8,264
|
|
|||
Other non-cash purchase price adjustments
|
(207,854
|
)
|
|
(289,050
|
)
|
|
(275,338
|
)
|
|||
Distribution from investment in unconsolidated entity
|
—
|
|
|
—
|
|
|
4,849
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(36,189
|
)
|
|
(38,985
|
)
|
|
(13,211
|
)
|
|||
Receivables from distributors
|
20,944
|
|
|
(19,608
|
)
|
|
(17,241
|
)
|
|||
Inventory
|
11,474
|
|
|
11,374
|
|
|
(14,793
|
)
|
|||
Related party assets
|
2,031
|
|
|
9,523
|
|
|
30,036
|
|
|||
Prepaid expenses and other current assets
|
16,788
|
|
|
647
|
|
|
8,525
|
|
|||
Other long-term assets
|
2,973
|
|
|
22,779
|
|
|
36,490
|
|
|||
Accounts payable and accrued expenses
|
(44,009
|
)
|
|
46,043
|
|
|
(32,010
|
)
|
|||
Accrued interest
|
8,131
|
|
|
(36,451
|
)
|
|
(2,048
|
)
|
|||
Deferred revenue
|
73,593
|
|
|
101,311
|
|
|
55,336
|
|
|||
Related party liabilities
|
(1,991
|
)
|
|
(7,545
|
)
|
|
(1,542
|
)
|
|||
Other long-term liabilities
|
12,290
|
|
|
3,042
|
|
|
152
|
|
|||
Net cash provided by operating activities
|
1,102,832
|
|
|
806,765
|
|
|
543,630
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(173,617
|
)
|
|
(97,293
|
)
|
|
(137,429
|
)
|
|||
Purchases of restricted and other investments
|
(1,719
|
)
|
|
(26
|
)
|
|
(826
|
)
|
|||
Acquisition of business, net of cash acquired
|
(525,352
|
)
|
|
—
|
|
|
—
|
|
|||
Release of restricted investments
|
—
|
|
|
—
|
|
|
250
|
|
|||
Return of capital from investment in unconsolidated entity
|
—
|
|
|
—
|
|
|
10,117
|
|
|||
Net cash used in investing activities
|
(700,688
|
)
|
|
(97,319
|
)
|
|
(127,888
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from exercise of stock options
|
21,968
|
|
|
123,369
|
|
|
11,553
|
|
|||
Taxes paid in lieu of shares issued for stock-based compensation
|
(46,342
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from long-term borrowings and revolving credit facility, net of costs
|
3,156,063
|
|
|
383,641
|
|
|
—
|
|
|||
Payment of premiums on redemption of debt
|
(175,453
|
)
|
|
(100,615
|
)
|
|
(5,020
|
)
|
|||
Repayment of long-term borrowings and revolving credit facility
|
(1,782,160
|
)
|
|
(915,824
|
)
|
|
(234,976
|
)
|
|||
Repayment of related party long-term borrowings
|
(200,000
|
)
|
|
(126,000
|
)
|
|
—
|
|
|||
Common stock repurchased and retired
|
(1,762,360
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
—
|
|
|
(327,062
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(788,284
|
)
|
|
(962,491
|
)
|
|
(228,443
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(386,140
|
)
|
|
(253,045
|
)
|
|
187,299
|
|
|||
Cash and cash equivalents at beginning of period
|
520,945
|
|
|
773,990
|
|
|
586,691
|
|
|||
Cash and cash equivalents at end of period
|
$
|
134,805
|
|
|
$
|
520,945
|
|
|
$
|
773,990
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2013
|
|
2012
|
|
2011
|
||||||
Supplemental Disclosure of Cash and Non-Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
169,781
|
|
|
$
|
262,039
|
|
|
$
|
258,676
|
|
Income taxes paid
|
2,783
|
|
|
4,935
|
|
|
—
|
|
|||
Acquisition related costs
|
2,902
|
|
|
—
|
|
|
—
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital lease obligations incurred to acquire assets
|
11,966
|
|
|
12,781
|
|
|
—
|
|
|||
Conversion of Series B preferred stock to common stock
|
1,293
|
|
|
1,294
|
|
|
—
|
|
|||
Common stock issuance upon exercise of warrants
|
—
|
|
|
—
|
|
|
7
|
|
|||
Conversion of 7% Exchangeable Notes to common stock, net of debt issuance and deferred financing costs
|
45,097
|
|
|
—
|
|
|
—
|
|
|||
Performance incentive payments
|
16,900
|
|
|
—
|
|
|
—
|
|
|||
Goodwill reduced for the exercise and vesting of certain stock awards
|
274
|
|
|
19,491
|
|
|
—
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Subscriber revenue
|
$
|
3,284,660
|
|
|
$
|
2,962,665
|
|
|
$
|
2,595,414
|
|
Advertising revenue
|
89,288
|
|
|
82,320
|
|
|
73,672
|
|
|||
Equipment revenue
|
80,573
|
|
|
73,456
|
|
|
71,051
|
|
|||
Other revenue
|
344,574
|
|
|
283,599
|
|
|
274,387
|
|
|||
Total revenue
|
3,799,095
|
|
|
3,402,040
|
|
|
3,014,524
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of services:
|
|
|
|
|
|
||||||
Revenue share and royalties
|
677,642
|
|
|
551,012
|
|
|
471,149
|
|
|||
Programming and content
|
290,323
|
|
|
278,997
|
|
|
281,234
|
|
|||
Customer service and billing
|
320,755
|
|
|
294,980
|
|
|
259,719
|
|
|||
Satellite and transmission
|
79,292
|
|
|
72,615
|
|
|
75,902
|
|
|||
Cost of equipment
|
26,478
|
|
|
31,766
|
|
|
33,095
|
|
|||
Subscriber acquisition costs
|
495,610
|
|
|
474,697
|
|
|
434,482
|
|
|||
Sales and marketing
|
291,024
|
|
|
248,905
|
|
|
222,773
|
|
|||
Engineering, design and development
|
57,969
|
|
|
48,843
|
|
|
53,435
|
|
|||
General and administrative
|
262,135
|
|
|
261,905
|
|
|
238,738
|
|
|||
Depreciation and amortization
|
253,314
|
|
|
266,295
|
|
|
267,880
|
|
|||
Total operating expenses
|
2,754,542
|
|
|
2,530,015
|
|
|
2,338,407
|
|
|||
Income from operations
|
1,044,553
|
|
|
872,025
|
|
|
676,117
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense, net of amounts capitalized
|
(204,671
|
)
|
|
(265,321
|
)
|
|
(304,938
|
)
|
|||
Loss on extinguishment of debt and credit facilities, net
|
(190,577
|
)
|
|
(132,726
|
)
|
|
(7,206
|
)
|
|||
Interest and investment income
|
6,976
|
|
|
716
|
|
|
73,970
|
|
|||
Loss on fair value of debt and equity instruments
|
(464,102
|
)
|
|
—
|
|
|
—
|
|
|||
Other income (loss)
|
1,204
|
|
|
(226
|
)
|
|
3,252
|
|
|||
Total other expense
|
(851,170
|
)
|
|
(397,557
|
)
|
|
(234,922
|
)
|
|||
Income before income taxes
|
193,383
|
|
|
474,468
|
|
|
441,195
|
|
|||
Income tax (expense) benefit
|
(259,877
|
)
|
|
2,998,234
|
|
|
(14,234
|
)
|
|||
Net (loss) income attributable to Sirius XM Radio Inc.'s sole stockholder
|
$
|
(66,494
|
)
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
Realized loss on XM Canada investment foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
6,072
|
|
|||
Foreign currency translation adjustment, net of tax
|
(428
|
)
|
|
49
|
|
|
(140
|
)
|
|||
Total comprehensive (loss) income attributable to Sirius XM Radio Inc.'s sole stockholder
|
$
|
(66,922
|
)
|
|
$
|
3,472,751
|
|
|
$
|
432,893
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
(in thousands, except share and per share data)
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
134,805
|
|
|
$
|
520,945
|
|
Accounts receivable, net
|
103,937
|
|
|
106,142
|
|
||
Receivables from distributors
|
88,975
|
|
|
104,425
|
|
||
Inventory, net
|
13,863
|
|
|
25,337
|
|
||
Prepaid expenses
|
110,530
|
|
|
122,157
|
|
||
Related party current assets
|
15,861
|
|
|
13,167
|
|
||
Deferred tax asset
|
937,598
|
|
|
923,972
|
|
||
Other current assets
|
20,160
|
|
|
12,037
|
|
||
Total current assets
|
1,425,729
|
|
|
1,828,182
|
|
||
Property and equipment, net
|
1,594,574
|
|
|
1,571,922
|
|
||
Long-term restricted investments
|
5,718
|
|
|
3,999
|
|
||
Deferred financing fees, net
|
12,604
|
|
|
38,677
|
|
||
Intangible assets, net
|
2,700,062
|
|
|
2,519,610
|
|
||
Goodwill
|
2,204,553
|
|
|
1,815,365
|
|
||
Related party long-term assets
|
30,164
|
|
|
44,954
|
|
||
Long-term deferred tax asset
|
868,057
|
|
|
1,219,256
|
|
||
Other long-term assets
|
10,035
|
|
|
12,878
|
|
||
Total assets
|
$
|
8,851,496
|
|
|
$
|
9,054,843
|
|
LIABILITIES AND STOCKHOLDER EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
578,332
|
|
|
$
|
587,652
|
|
Accrued interest
|
42,085
|
|
|
33,954
|
|
||
Current portion of deferred revenue
|
1,586,611
|
|
|
1,474,138
|
|
||
Current portion of deferred credit on executory contracts
|
3,781
|
|
|
207,854
|
|
||
Current maturities of long-term debt
|
963,630
|
|
|
4,234
|
|
||
Current maturities of long-term related party debt
|
10,959
|
|
|
—
|
|
||
Related party current liabilities
|
4,618
|
|
|
6,756
|
|
||
Total current liabilities
|
3,190,016
|
|
|
2,314,588
|
|
||
Deferred revenue
|
149,026
|
|
|
159,501
|
|
||
Deferred credit on executory contracts
|
1,394
|
|
|
5,175
|
|
||
Long-term debt
|
3,093,821
|
|
|
2,222,080
|
|
||
Long-term related party debt
|
—
|
|
|
208,906
|
|
||
Related party long-term liabilities
|
16,337
|
|
|
18,966
|
|
||
Other long-term liabilities
|
99,556
|
|
|
86,062
|
|
||
Total liabilities
|
6,550,150
|
|
|
5,015,278
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
||||
Stockholder equity:
|
|
|
|
||||
Convertible perpetual preferred stock, series B-1, par value $0.001 (liquidation preference of $0.001 per share); 0 and 50,000,000 authorized and 0 and 6,250,100 shares issued and outstanding at December 31, 2013 and 2012, respectively
|
—
|
|
|
6
|
|
||
Common stock, par value $0.001; 1,000 and 9,000,000,000 shares authorized and 1,000 and 5,262,440,085 shares issued and outstanding at December 31, 2013 and 2012, respectively
|
—
|
|
|
5,263
|
|
||
Accumulated other comprehensive (loss) income, net of tax
|
(308
|
)
|
|
120
|
|
||
Additional paid-in capital
|
8,679,538
|
|
|
10,345,566
|
|
||
Accumulated deficit
|
(6,377,884
|
)
|
|
(6,311,390
|
)
|
||
Total stockholder equity
|
2,301,346
|
|
|
4,039,565
|
|
||
Total liabilities and stockholder equity
|
$
|
8,851,496
|
|
|
$
|
9,054,843
|
|
|
Convertible Perpetual
Preferred Stock,
Series B-1
|
|
Common Stock
|
|
|
|
|
|
Treasury Stock
|
|
|
|
|
|||||||||||||||||||||||
(in thousands, except share data)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Additional
Paid-in
Capital
|
|
Shares
|
|
Amount
|
|
Accumulated
Deficit
|
|
Total
Stockholder
Equity
|
|||||||||||||||||
Balance at January 1, 2011
|
12,500,000
|
|
|
$
|
13
|
|
|
3,933,195,112
|
|
|
$
|
3,933
|
|
|
$
|
(5,861
|
)
|
|
$
|
10,420,604
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(10,211,053
|
)
|
|
$
|
207,636
|
|
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,932
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
426,961
|
|
|
432,893
|
|
|||||||
Issuance of common stock to employees and employee benefit plans, net of forfeitures
|
—
|
|
|
—
|
|
|
1,882,801
|
|
|
2
|
|
|
—
|
|
|
3,480
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,482
|
|
|||||||
Share-based payment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,581
|
|
|||||||
Exercise of options and vesting of restricted stock units
|
—
|
|
|
—
|
|
|
13,401,048
|
|
|
13
|
|
|
—
|
|
|
11,540
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,553
|
|
|||||||
Issuance of common stock upon exercise of warrants
|
—
|
|
|
—
|
|
|
7,122,951
|
|
|
7
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Return of shares under share borrow agreements
|
—
|
|
|
—
|
|
|
(202,399,983
|
)
|
|
(202
|
)
|
|
—
|
|
|
202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2011
|
12,500,000
|
|
|
$
|
13
|
|
|
3,753,201,929
|
|
|
$
|
3,753
|
|
|
$
|
71
|
|
|
$
|
10,484,400
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(9,784,092
|
)
|
|
$
|
704,145
|
|
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
|
|
|
—
|
|
|
—
|
|
|
3,472,702
|
|
|
3,472,751
|
|
|||||||
Issuance of common stock to employees and employee benefit plans, net of forfeitures
|
—
|
|
|
—
|
|
|
1,571,175
|
|
|
2
|
|
|
—
|
|
|
3,521
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,523
|
|
|||||||
Share-based payment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,299
|
|
|||||||
Exercise of options
|
—
|
|
|
—
|
|
|
214,199,297
|
|
|
214
|
|
|
—
|
|
|
125,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,909
|
|
|||||||
Cash dividends paid on common shares ($0.05)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(262,387
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(262,387
|
)
|
|||||||
Cash dividends paid on preferred shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64,675
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64,675
|
)
|
|||||||
Conversion of preferred stock to common stock on as-converted basis
|
(6,249,900
|
)
|
|
(7
|
)
|
|
1,293,467,684
|
|
|
1,294
|
|
|
—
|
|
|
(1,287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2012
|
6,250,100
|
|
|
$
|
6
|
|
|
5,262,440,085
|
|
|
$
|
5,263
|
|
|
$
|
120
|
|
|
$
|
10,345,566
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,311,390
|
)
|
|
$
|
4,039,565
|
|
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(428
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,494
|
)
|
|
(66,922
|
)
|
|||||||
Share-based payment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,903
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,903
|
|
|||||||
Exercise of options and vesting of restricted stock units
|
—
|
|
|
—
|
|
|
29,157,786
|
|
|
28
|
|
|
—
|
|
|
19,249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,277
|
|
|||||||
Minimum withholding taxes on net share settlement of stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,941
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,941
|
)
|
|||||||
Conversion of preferred stock to common stock
|
(6,250,100
|
)
|
|
(6
|
)
|
|
1,293,509,076
|
|
|
1,293
|
|
|
—
|
|
|
(1,287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Conversion of Exchangeable Notes to common stock
|
—
|
|
|
—
|
|
|
27,687,850
|
|
|
28
|
|
|
—
|
|
|
45,069
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,097
|
|
|||||||
Common stock repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
520,257,866
|
|
|
(1,764,969
|
)
|
|
—
|
|
|
(1,764,969
|
)
|
|||||||
Common stock retired
|
—
|
|
|
—
|
|
|
(520,257,866
|
)
|
|
(520
|
)
|
|
—
|
|
|
(1,764,449
|
)
|
|
(520,257,866
|
)
|
|
1,764,969
|
|
|
—
|
|
|
—
|
|
|||||||
Transfer of common stock to Sirius XM Holdings Inc.
|
—
|
|
|
—
|
|
|
(6,092,536,931
|
)
|
|
(6,092
|
)
|
|
—
|
|
|
6,092
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfer of forward contract to Sirius XM Holdings Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,964
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,964
|
)
|
|||||||
Initial value of forward contract
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,300
|
|
|||||||
Common stock issued by Sirius XM Radio Inc. to Sirius XM Holdings Inc.
|
—
|
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance at December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
1,000
|
|
|
$
|
—
|
|
|
$
|
(308
|
)
|
|
$
|
8,679,538
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,377,884
|
)
|
|
$
|
2,301,346
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
(66,494
|
)
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
253,314
|
|
|
266,295
|
|
|
267,880
|
|
|||
Non-cash interest expense, net of amortization of premium
|
21,698
|
|
|
35,924
|
|
|
39,515
|
|
|||
Provision for doubtful accounts
|
39,016
|
|
|
34,548
|
|
|
33,164
|
|
|||
Amortization of deferred income related to equity method investment
|
(2,776
|
)
|
|
(2,776
|
)
|
|
(2,776
|
)
|
|||
Loss on extinguishment of debt and credit facilities, net
|
190,577
|
|
|
132,726
|
|
|
7,206
|
|
|||
Gain on merger of unconsolidated entities
|
—
|
|
|
—
|
|
|
(75,768
|
)
|
|||
(Gain) loss on unconsolidated entity investments, net
|
(5,865
|
)
|
|
420
|
|
|
6,520
|
|
|||
Dividend received from unconsolidated entity investment
|
22,065
|
|
|
1,185
|
|
|
—
|
|
|||
Loss on disposal of assets
|
351
|
|
|
657
|
|
|
269
|
|
|||
Loss on fair value of debt and equity instruments
|
464,102
|
|
|
—
|
|
|
—
|
|
|||
Share-based payment expense
|
58,903
|
|
|
63,822
|
|
|
53,190
|
|
|||
Deferred income taxes
|
259,787
|
|
|
(3,001,818
|
)
|
|
8,264
|
|
|||
Other non-cash purchase price adjustments
|
(207,854
|
)
|
|
(289,050
|
)
|
|
(275,338
|
)
|
|||
Distribution from investment in unconsolidated entity
|
—
|
|
|
—
|
|
|
4,849
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(36,189
|
)
|
|
(38,985
|
)
|
|
(13,211
|
)
|
|||
Receivables from distributors
|
20,944
|
|
|
(19,608
|
)
|
|
(17,241
|
)
|
|||
Inventory
|
11,474
|
|
|
11,374
|
|
|
(14,793
|
)
|
|||
Related party assets
|
(2,246
|
)
|
|
9,523
|
|
|
30,036
|
|
|||
Prepaid expenses and other current assets
|
16,788
|
|
|
647
|
|
|
8,525
|
|
|||
Other long-term assets
|
2,973
|
|
|
22,779
|
|
|
36,490
|
|
|||
Accounts payable and accrued expenses
|
(44,009
|
)
|
|
46,043
|
|
|
(32,010
|
)
|
|||
Accrued interest
|
8,131
|
|
|
(36,451
|
)
|
|
(2,048
|
)
|
|||
Deferred revenue
|
73,593
|
|
|
101,311
|
|
|
55,336
|
|
|||
Related party liabilities
|
(1,991
|
)
|
|
(7,545
|
)
|
|
(1,542
|
)
|
|||
Other long-term liabilities
|
12,290
|
|
|
3,042
|
|
|
152
|
|
|||
Net cash provided by operating activities
|
1,088,582
|
|
|
806,765
|
|
|
543,630
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(173,617
|
)
|
|
(97,293
|
)
|
|
(137,429
|
)
|
|||
Purchases of restricted and other investments
|
(1,719
|
)
|
|
(26
|
)
|
|
(826
|
)
|
|||
Acquisition of business, net of cash acquired
|
(525,352
|
)
|
|
—
|
|
|
—
|
|
|||
Release of restricted investments
|
—
|
|
|
—
|
|
|
250
|
|
|||
Return of capital from investment in unconsolidated entity
|
—
|
|
|
—
|
|
|
10,117
|
|
|||
Net cash used in investing activities
|
(700,688
|
)
|
|
(97,319
|
)
|
|
(127,888
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from exercise of stock options
|
21,817
|
|
|
123,369
|
|
|
11,553
|
|
|||
Taxes paid in lieu of shares issued for stock-based compensation
|
(31,941
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from long-term borrowings and revolving credit facility, net of costs
|
3,156,063
|
|
|
383,641
|
|
|
—
|
|
|||
Payment of premiums on redemption of debt
|
(175,453
|
)
|
|
(100,615
|
)
|
|
(5,020
|
)
|
|||
Repayment of long-term borrowings and revolving credit facility
|
(1,782,160
|
)
|
|
(915,824
|
)
|
|
(234,976
|
)
|
|||
Repayment of related party long-term borrowings
|
(200,000
|
)
|
|
(126,000
|
)
|
|
—
|
|
|||
Common stock repurchased and retired
|
(1,762,360
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
—
|
|
|
(327,062
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(774,034
|
)
|
|
(962,491
|
)
|
|
(228,443
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(386,140
|
)
|
|
(253,045
|
)
|
|
187,299
|
|
|||
Cash and cash equivalents at beginning of period
|
520,945
|
|
|
773,990
|
|
|
586,691
|
|
|||
Cash and cash equivalents at end of period
|
$
|
134,805
|
|
|
$
|
520,945
|
|
|
$
|
773,990
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2013
|
|
2012
|
|
2011
|
||||||
Supplemental Disclosure of Cash and Non-Cash Flow Information
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
169,781
|
|
|
$
|
262,039
|
|
|
$
|
258,676
|
|
Income taxes paid
|
2,783
|
|
|
4,935
|
|
|
—
|
|
|||
Acquisition related costs
|
2,902
|
|
|
—
|
|
|
—
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital lease obligations incurred to acquire assets
|
11,966
|
|
|
12,781
|
|
|
—
|
|
|||
Conversion of Series B preferred stock to common stock
|
1,293
|
|
|
1,294
|
|
|
—
|
|
|||
Common stock issuance upon exercise of warrants
|
—
|
|
|
—
|
|
|
7
|
|
|||
Conversion of 7% Exchangeable Notes to common stock, net of debt issuance and deferred financing costs
|
45,097
|
|
|
—
|
|
|
—
|
|
|||
Performance incentive payments
|
16,900
|
|
|
—
|
|
|
—
|
|
|||
Goodwill reduced for the exercise and vesting of certain stock awards
|
274
|
|
|
19,491
|
|
|
—
|
|
(1)
|
Business & Basis of Presentation
|
•
|
Besides the shares which settled in November, the fair value of the share repurchase agreement with Liberty Media is recorded in Holdings' consolidated balance sheet, with changes in fair value recorded in Holdings' statements of comprehensive income.
|
•
|
The additional fair value in excess of the carrying amount associated with the conversion feature for the
7%
Exchangeable Senior Subordinated Notes due 2014 is recorded in Sirius XM's consolidated balance sheet, with changes in fair value recorded in Sirius XM's statements of comprehensive income. This is eliminated in Holdings' consolidated balance sheets and statements of comprehensive income.
|
•
|
As a result of our corporate reorganization effective November 15, 2013, all of the outstanding shares of Sirius XM's common stock were converted, on a share for share basis, into identical shares of common stock of Holdings.
|
(2)
|
Acquisitions
|
Acquired Assets:
|
|
||
Cash and cash equivalents
|
$
|
1,966
|
|
Other current assets
|
8,669
|
|
|
Property and equipment
|
26,251
|
|
|
Intangible assets subject to amortization
|
230,663
|
|
|
Goodwill
|
389,462
|
|
|
Other assets
|
2,695
|
|
|
Total assets
|
$
|
659,706
|
|
|
|
||
Assumed Liabilities:
|
|
||
Deferred revenue
|
$
|
(28,404
|
)
|
Deferred income tax liabilities, net
|
(78,127
|
)
|
|
Other liabilities
|
(25,857
|
)
|
|
Total liabilities
|
$
|
(132,388
|
)
|
Total consideration
|
$
|
527,318
|
|
(3)
|
Summary of Significant Accounting Policies
|
i.
|
Level 1 input - unadjusted quoted prices in active markets for identical instrument;
|
ii.
|
Level 2 input - observable market data for the same or similar instrument but not Level 1, including quoted prices for identical or similar assets or liabilities in markets that are active or not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
iii.
|
Level 3 input - unobservable inputs developed using management's assumptions about the inputs used for pricing the asset or liability.
|
(4)
|
Earnings per Share
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2013
|
|
2012
|
|
2011
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
377,215
|
|
|
$
|
3,472,702
|
|
|
$
|
426,961
|
|
Less:
|
|
|
|
|
|
||||||
Allocation of undistributed income to Series B Preferred Stock
|
(3,825
|
)
|
|
(1,084,895
|
)
|
|
(174,449
|
)
|
|||
Dividends paid to preferred stockholders
|
—
|
|
|
(64,675
|
)
|
|
—
|
|
|||
Net income available to common stockholders for basic net income per common share
|
$
|
373,390
|
|
|
$
|
2,323,132
|
|
|
$
|
252,512
|
|
Add back:
|
|
|
|
|
|
|
|
||||
Allocation of undistributed income to Series B Preferred Stock
|
3,825
|
|
|
1,084,895
|
|
|
174,449
|
|
|||
Dividends paid to preferred stockholders
|
—
|
|
|
64,675
|
|
|
—
|
|
|||
Effect of interest on assumed conversions of convertible debt
|
—
|
|
|
38,500
|
|
|
—
|
|
|||
Net income available to common stockholders for diluted net income per common share
|
$
|
377,215
|
|
|
$
|
3,511,202
|
|
|
$
|
426,961
|
|
Denominator:
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding for basic net income per common share
|
6,227,646
|
|
|
4,209,073
|
|
|
3,744,606
|
|
|||
Weighted average impact of assumed Series B Preferred Stock conversion
|
63,789
|
|
|
2,215,900
|
|
|
2,586,977
|
|
|||
Weighted average impact of assumed convertible debt
|
—
|
|
|
298,725
|
|
|
—
|
|
|||
Weighted average impact of other dilutive equity instruments
|
93,356
|
|
|
150,088
|
|
|
169,239
|
|
|||
Weighted average shares for diluted net income per common share
|
6,384,791
|
|
|
6,873,786
|
|
|
6,500,822
|
|
|||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.06
|
|
|
$
|
0.55
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.51
|
|
|
$
|
0.07
|
|
(5)
|
Accounts Receivable, net
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Gross accounts receivable
|
$
|
113,015
|
|
|
$
|
117,853
|
|
Allowance for doubtful accounts
|
(9,078
|
)
|
|
(11,711
|
)
|
||
Total accounts receivable, net
|
$
|
103,937
|
|
|
$
|
106,142
|
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Billed
|
$
|
38,532
|
|
|
$
|
53,057
|
|
Unbilled
|
50,443
|
|
|
51,368
|
|
||
Total
|
$
|
88,975
|
|
|
$
|
104,425
|
|
(6)
|
Inventory, net
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Raw materials
|
$
|
12,358
|
|
|
$
|
17,717
|
|
Finished goods
|
15,723
|
|
|
23,779
|
|
||
Allowance for obsolescence
|
(14,218
|
)
|
|
(16,159
|
)
|
||
Total inventory, net
|
$
|
13,863
|
|
|
$
|
25,337
|
|
(7)
|
Goodwill
|
(8)
|
Intangible Assets
|
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
Weighted Average
Useful Lives
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
||||||||||||
Due to the Merger:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Indefinite life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
FCC licenses
|
Indefinite
|
|
$
|
2,083,654
|
|
|
$
|
—
|
|
|
$
|
2,083,654
|
|
|
$
|
2,083,654
|
|
|
$
|
—
|
|
|
$
|
2,083,654
|
|
Trademark
|
Indefinite
|
|
250,000
|
|
|
—
|
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
|
250,000
|
|
||||||
Definite life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscriber relationships
|
9 years
|
|
380,000
|
|
|
(271,372
|
)
|
|
108,628
|
|
|
380,000
|
|
|
(233,317
|
)
|
|
146,683
|
|
||||||
Licensing agreements
|
9.1 years
|
|
45,289
|
|
|
(19,604
|
)
|
|
25,685
|
|
|
78,489
|
|
|
(44,161
|
)
|
|
34,328
|
|
||||||
Proprietary software
|
6 years
|
|
16,552
|
|
|
(13,384
|
)
|
|
3,168
|
|
|
16,552
|
|
|
(12,777
|
)
|
|
3,775
|
|
||||||
Developed technology
|
10 years
|
|
2,000
|
|
|
(1,083
|
)
|
|
917
|
|
|
2,000
|
|
|
(883
|
)
|
|
1,117
|
|
||||||
Leasehold interests
|
7.4 years
|
|
132
|
|
|
(96
|
)
|
|
36
|
|
|
132
|
|
|
(79
|
)
|
|
53
|
|
||||||
Due to connected vehicle business of Agero:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Definite life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OEM relationships
|
15 years
|
|
$
|
220,000
|
|
|
$
|
(2,444
|
)
|
|
$
|
217,556
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Proprietary software
|
10 years
|
|
10,663
|
|
|
(245
|
)
|
|
10,418
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total intangible assets
|
|
|
$
|
3,008,290
|
|
|
$
|
(308,228
|
)
|
|
$
|
2,700,062
|
|
|
$
|
2,810,827
|
|
|
$
|
(291,217
|
)
|
|
$
|
2,519,610
|
|
FCC satellite licenses
|
|
Expiration year
|
SIRIUS FM-1
|
|
2017
|
SIRIUS FM-2
|
|
2017
|
SIRIUS FM-3
|
|
2017
|
SIRIUS FM-5
|
|
2017
|
SIRIUS FM-6
(1)
|
|
|
XM-1
|
|
2014
|
XM-2
|
|
2014
|
XM-3
|
|
2021
|
XM-4
|
|
2014
|
XM-5
|
|
2018
|
(1)
|
The FCC license for our FM-6 satellite will be issued for a period of
eight years
, beginning on the date we certify to the FCC that the satellite has been successfully placed into orbit and that the operations of the satellite fully conform to the terms and conditions of the space station radio authorization.
|
Year ending December 31,
|
|
Amount
|
||
2014
|
|
$
|
55,016
|
|
2015
|
|
51,700
|
|
|
2016
|
|
48,545
|
|
|
2017
|
|
34,882
|
|
|
2018
|
|
19,463
|
|
|
Thereafter
|
|
156,802
|
|
|
Total definite life intangible assets, net
|
|
$
|
366,408
|
|
(9)
|
Interest Costs
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Interest costs charged to expense
|
$
|
204,671
|
|
|
$
|
265,321
|
|
|
$
|
304,938
|
|
Interest costs capitalized
|
26,445
|
|
|
31,982
|
|
|
33,522
|
|
|||
Total interest costs incurred
|
$
|
231,116
|
|
|
$
|
297,303
|
|
|
$
|
338,460
|
|
(10)
|
Property and Equipment
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Satellite system
|
$
|
2,407,423
|
|
|
$
|
1,943,537
|
|
Terrestrial repeater network
|
109,367
|
|
|
112,482
|
|
||
Leasehold improvements
|
46,173
|
|
|
44,938
|
|
||
Broadcast studio equipment
|
59,020
|
|
|
55,823
|
|
||
Capitalized software and hardware
|
298,267
|
|
|
232,753
|
|
||
Satellite telemetry, tracking and control facilities
|
63,944
|
|
|
62,734
|
|
||
Furniture, fixtures, equipment and other
|
67,275
|
|
|
76,028
|
|
||
Land
|
38,411
|
|
|
38,411
|
|
||
Building
|
58,662
|
|
|
57,816
|
|
||
Construction in progress
|
103,148
|
|
|
417,124
|
|
||
Total property and equipment
|
3,251,690
|
|
|
3,041,646
|
|
||
Accumulated depreciation and amortization
|
(1,657,116
|
)
|
|
(1,469,724
|
)
|
||
Property and equipment, net
|
$
|
1,594,574
|
|
|
$
|
1,571,922
|
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Satellite system
|
$
|
11,879
|
|
|
$
|
376,825
|
|
Terrestrial repeater network
|
30,078
|
|
|
17,224
|
|
||
Capitalized software
|
39,924
|
|
|
18,083
|
|
||
Other
|
21,267
|
|
|
4,992
|
|
||
Construction in progress
|
$
|
103,148
|
|
|
$
|
417,124
|
|
Satellite Designation
|
|
Year Delivered
|
|
Estimated End of
Depreciable Life
|
FM-1*
|
|
2000
|
|
2013
|
FM-2*
|
|
2000
|
|
2013
|
FM-3
|
|
2000
|
|
2015
|
FM-5
|
|
2009
|
|
2024
|
FM-6
|
|
2013
|
|
2028
|
XM-1*
|
|
2001
|
|
2013
|
XM-2*
|
|
2001
|
|
2013
|
XM-3
|
|
2005
|
|
2020
|
XM-4
|
|
2006
|
|
2021
|
XM-5
|
|
2010
|
|
2025
|
(11)
|
Related Party Transactions
|
|
Related party current assets
|
|
Related party long-term assets
|
|
Related party current liabilities
|
|
Related party long-term liabilities
|
|
Related party debt
|
||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||||||
Liberty Media
|
$
|
278
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
757
|
|
|
$
|
15,766
|
|
|
$
|
3,980
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,959
|
|
|
$
|
208,906
|
|
Sirius XM Canada
|
8,867
|
|
|
13,167
|
|
|
27,619
|
|
|
44,197
|
|
|
4,554
|
|
|
2,776
|
|
|
16,337
|
|
|
18,966
|
|
|
—
|
|
|
—
|
|
||||||||||
M-Way
|
—
|
|
|
—
|
|
|
2,545
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Total
|
$
|
9,145
|
|
|
$
|
13,167
|
|
|
$
|
30,164
|
|
|
$
|
44,954
|
|
|
$
|
20,320
|
|
|
$
|
6,756
|
|
|
$
|
16,337
|
|
|
$
|
18,966
|
|
|
$
|
10,959
|
|
|
$
|
208,906
|
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
7% Exchangeable Senior Subordinated Notes due 2014
|
$
|
11,000
|
|
|
$
|
11,000
|
|
8.75% Senior Notes due 2015
|
—
|
|
|
150,000
|
|
||
7.625% Senior Notes due 2018
|
—
|
|
|
50,000
|
|
||
Total principal debt
|
11,000
|
|
|
211,000
|
|
||
Less: discounts
|
41
|
|
|
2,094
|
|
||
Total carrying value of debt
|
$
|
10,959
|
|
|
$
|
208,906
|
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Deferred programming costs and accrued interest
|
$
|
2,782
|
|
|
$
|
4,350
|
|
Dividends receivable
|
—
|
|
|
6,176
|
|
||
Chip set and other services reimbursement
|
2,387
|
|
|
2,641
|
|
||
Fair value of host contract of debenture
|
3,641
|
|
|
—
|
|
||
Fair value of embedded derivative of debenture
|
57
|
|
|
—
|
|
||
Total
|
$
|
8,867
|
|
|
$
|
13,167
|
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Non-interest bearing note, principal
|
$
|
376
|
|
|
$
|
404
|
|
Fair value of host contract of debenture
|
—
|
|
|
3,877
|
|
||
Fair value of embedded derivative of debenture
|
—
|
|
|
9
|
|
||
Investment balance
*
|
26,972
|
|
|
37,983
|
|
||
Deferred programming costs and other receivables
|
271
|
|
|
1,924
|
|
||
Total
|
$
|
27,619
|
|
|
$
|
44,197
|
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Deferred revenue for NHL licensing fees
|
$
|
1,500
|
|
|
$
|
—
|
|
Carrying value of deferred revenue
|
18,966
|
|
|
21,742
|
|
||
Deferred revenue for software licensing fees and other
|
425
|
|
|
—
|
|
||
Total
|
$
|
20,891
|
|
|
$
|
21,742
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011 *
|
||||||
Royalty income
|
$
|
35,411
|
|
|
$
|
31,368
|
|
|
$
|
13,735
|
|
Amortization of Sirius XM Canada deferred income
|
2,776
|
|
|
2,776
|
|
|
1,388
|
|
|||
Licensing fee revenue
|
5,012
|
|
|
4,500
|
|
|
3,000
|
|
|||
Advertising and other reimbursements
|
3,001
|
|
|
833
|
|
|
417
|
|
|||
Streaming revenue
|
2,735
|
|
|
—
|
|
|
—
|
|
|||
Total revenue from Sirius XM Canada
|
$
|
48,935
|
|
|
$
|
39,477
|
|
|
$
|
18,540
|
|
|
For the Year Ended December 31,
|
||
|
2011 *
|
||
Royalty income
|
$
|
9,945
|
|
Dividend income
|
460
|
|
|
Total revenue from Sirius Canada
|
$
|
10,405
|
|
|
For the Year Ended December 31,
|
||
|
2011 *
|
||
Amortization of XM Canada deferred income
|
$
|
1,388
|
|
Subscriber and activation fee royalties
|
5,483
|
|
|
Licensing fee revenue
|
3,000
|
|
|
Advertising reimbursements
|
833
|
|
|
Total revenue from XM Canada
|
$
|
10,704
|
|
(12)
|
Investments
|
(13)
|
Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying balance at December 31,
|
||||||||
Issuer
|
|
Issued
|
|
Debt
|
|
Maturity Date
|
|
Interest Payable
|
|
Principal Amount
|
|
2013
|
|
2012 (h)
|
||||||
Sirius XM and Holdings
(a)(b)
|
|
August 2008
|
|
7% Exchangeable
Senior Subordinated Notes (the "Exchangeable Notes") |
|
December 1, 2014
|
|
semi-annually on June 1 and December 1
|
|
$
|
502,370
|
|
|
$
|
500,481
|
|
|
$
|
545,888
|
|
Sirius XM
(a)(c)(d) |
|
March 2010
|
|
8.75% Senior Notes
(the "8.75% Notes")
|
|
April 1, 2015
|
|
semi-annually on April 1 and October 1
|
|
800,000
|
|
|
—
|
|
|
792,944
|
|
|||
Sirius XM
(a)(c)(e) |
|
October 2010
|
|
7.625% Senior Notes
(the "7.625% Notes")
|
|
November 1, 2018
|
|
semi-annually on May 1 and November 1
|
|
700,000
|
|
|
—
|
|
|
690,353
|
|
|||
Sirius XM
(a)(c) |
|
May 2013
|
|
4.25% Senior Notes
(the "4.25% Notes")
|
|
May 15, 2020
|
|
semi-annually on May 15 and November 15
|
|
500,000
|
|
|
494,809
|
|
|
—
|
|
|||
Sirius XM
(a)(c) |
|
September 2013
|
|
5.875% Senior Notes
(the "5.875% Notes")
|
|
October 1, 2020
|
|
semi-annually on April 1 and October 1
|
|
650,000
|
|
|
642,914
|
|
|
—
|
|
|||
Sirius XM
(a)(c) |
|
August 2013
|
|
5.75% Senior Notes
(the "5.75% Notes")
|
|
August 1, 2021
|
|
semi-annually on February 1 and August 1
|
|
600,000
|
|
|
594,499
|
|
|
—
|
|
|||
Sirius XM
(a)(c) |
|
August 2012
|
|
5.25% Senior Notes
(the "5.25% Notes")
|
|
August 15, 2022
|
|
semi-annually on February 15 and August 15
|
|
400,000
|
|
|
394,648
|
|
|
394,174
|
|
|||
Sirius XM
(a)(c) |
|
May 2013
|
|
4.625% Senior Notes
(the "4.625% Notes")
|
|
May 15, 2023
|
|
semi-annually on May15 and November 15
|
|
500,000
|
|
|
494,653
|
|
|
—
|
|
|||
Sirius XM
(f) |
|
December 2012
|
|
Senior Secured Revolving Credit Facility (the "Credit Facility")
|
|
December 5, 2017
|
|
variable fee paid quarterly
|
|
1,250,000
|
|
|
460,000
|
|
|
—
|
|
|||
Sirius XM
|
|
Various
|
|
Capital leases
|
|
Various
|
|
n/a
|
|
n/a
|
|
|
19,591
|
|
|
11,861
|
|
|||
Total Debt
|
|
3,601,595
|
|
|
2,435,220
|
|
||||||||||||||
Less: total current maturities (g)
|
|
507,774
|
|
|
4,234
|
|
||||||||||||||
Total long-term
|
|
3,093,821
|
|
|
2,430,986
|
|
||||||||||||||
Less: long-term related party
|
|
—
|
|
|
208,906
|
|
||||||||||||||
Total long-term, excluding related party
|
|
$
|
3,093,821
|
|
|
$
|
2,222,080
|
|
(a)
|
The carrying balance of the Notes are net of the remaining unamortized original issue discount.
|
(b)
|
The Exchangeable Notes are senior subordinated obligations and rank junior in right of payment to our existing and future senior debt and equally in right of payment with our existing and future senior subordinated debt. Substantially all of our domestic wholly-owned subsidiaries guarantee our obligations under these Notes on a senior subordinated basis. The Exchangeable Notes are exchangeable at any time at the option of the holder into shares of our common stock at an exchange rate of
543.1372
shares of common stock per
$1,000
principal amount of the notes, which is equivalent to an approximate exchange price of
$1.841
per share of common stock. In connection with the fundamental change that occurred on January 17, 2013 and the subsequent offer that was made to each holder of the Exchangeable Notes on February 1, 2013,
$47,630
in principal amount of the Exchangeable Notes were converted resulting in the issuance of
27,687,850
shares of our common stock. As a result of this conversion, we retired
$47,630
in principal amount of the Exchangeable Notes and recognized a proportionate share of unamortized discount and deferred financing fees of
$2,533
to Additional paid-in capital for the
year ended
December 31, 2013
. No loss was recognized as a result of the conversion. During the
year ended
December 31, 2013
, the common stock reserved for conversion in connection with the Exchangeable Notes were considered to be anti-dilutive in our calculation of diluted net income per share. During the
year ended
2012
, the Exchangeable Notes were considered to be dilutive.
|
(c)
|
Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes.
|
(d)
|
During the
year ended
December 31, 2013
, we purchased
$800,000
in aggregate principal amount of the
8.75%
Notes for an aggregate purchase price, including premium and interest, of
$927,860
. We recognized an aggregate loss on the extinguishment of the
8.75%
Notes of
$104,818
during the
year ended
December 31, 2013
, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net.
|
(e)
|
During the
year ended
December 31, 2013
, we purchased
$700,000
in aggregate principal amount of the
7.625%
Notes for an aggregate purchase price, including premium and interest, of
$797,830
. We recognized an aggregate loss on the extinguishment of the
7.625%
Notes of
$85,759
during the
year ended
December 31, 2013
, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net.
|
(f)
|
In December 2012, Sirius XM entered into a
five
-year Credit Facility with a syndicate of financial institutions for
$1,250,000
. Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries. Borrowings under the Credit
|
(g)
|
This balance includes
$10,959
in related party current maturities as of
December 31, 2013
.
|
(h)
|
During the
year ended
December 31, 2012
, we purchased
$257,000
of our then outstanding
9.75%
Senior Secured Notes due 2015 (the "9.75% Notes") for an aggregate purchase price, including interest, of
$281,698
. We recognized an aggregate loss on the extinguishment of the
9.75%
Notes of
$22,184
during the
year ended
December 31, 2012
, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net. During the
year ended
December 31, 2012
, we purchased
$778,500
of our then outstanding
13%
Senior Notes due 2013 (the "13% Notes") for an aggregate purchase price, including interest, of
$879,133
. We recognized an aggregate loss on the extinguishment of these
13%
Notes of
$110,542
during the
year ended
December 31, 2012
, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net.
|
|
|
Carrying amount at December 31, 2013
|
||
Total current debt at Holdings
|
|
$
|
507,774
|
|
Additional fair value associated with the Exchangeable Notes
(a)
|
|
466,815
|
|
|
Total current debt at Sirius XM
|
|
$
|
974,589
|
|
Total long-term debt
|
|
$
|
3,093,821
|
|
Total debt at Sirius XM
|
|
$
|
4,068,410
|
|
(a)
|
In connection with our corporate reorganization in November 2013, the Exchangeable Notes were amended such that the settlement of the conversion feature is into shares of Holdings' common stock and Holdings and Sirius XM became co-obligors with respect to the Exchangeable Notes. As of
December 31, 2013
,
$466,815
was recorded to Sirius XM's consolidated balance sheet in Current maturities of long-term debt for the fair value of the Exchangeable Notes in excess of the carrying amount. Changes in fair value are recorded in
Loss on fair value of debt and equity instruments
within Sirius XM's consolidated statements of comprehensive income. We recognized
$466,815
in
Loss on fair value of debt and equity instruments
during the
year ended
December 31, 2013
. The additional fair value in excess of the carrying amount of this instrument is eliminated in Holdings' consolidated balance sheets and statements of comprehensive income.
|
(14)
|
Stockholders’ Equity
|
|
|
|
|
|
Number of Warrants Outstanding
|
||||
|
|
|
|
|
December 31,
|
||||
(warrants in thousands)
|
Average Exercise Price
|
|
Expiration Date
|
|
2013
|
|
2012
|
||
NFL
|
$2.50
|
|
March 2015
|
|
16,667
|
|
|
16,667
|
|
Other distributors and programming providers
|
$3.00
|
|
June 2014
|
|
1,788
|
|
|
1,788
|
|
Total
|
|
|
|
|
18,455
|
|
|
18,455
|
|
(15)
|
Benefit Plans
|
|
For the Years Ended December 31,
|
||||
|
2013
|
|
2012
|
|
2011
|
Risk-free interest rate
|
1.4%
|
|
0.8%
|
|
1.1%
|
Expected life of options — years
|
4.73
|
|
5.06
|
|
5.27
|
Expected stock price volatility
|
47%
|
|
49%
|
|
68%
|
Expected dividend yield
|
0%
|
|
0%
|
|
0%
|
|
Options
|
|
Weighted-
Average
Exercise
Price (1)
|
|
Weighted-Average
Remaining
Contractual Term
(Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at the beginning of January 1, 2011
|
401,870
|
|
|
$
|
1.32
|
|
|
|
|
|
||
Granted
|
77,450
|
|
|
$
|
1.80
|
|
|
|
|
|
||
Exercised
|
(13,300
|
)
|
|
$
|
0.87
|
|
|
|
|
|
||
Forfeited, cancelled or expired
|
(26,440
|
)
|
|
$
|
4.15
|
|
|
|
|
|
||
Outstanding as of December 31, 2011
|
439,580
|
|
|
$
|
1.25
|
|
|
|
|
|
||
Granted
|
58,626
|
|
|
$
|
2.53
|
|
|
|
|
|
||
Exercised
|
(214,199
|
)
|
|
$
|
0.59
|
|
|
|
|
|
||
Forfeited, cancelled or expired
|
(9,495
|
)
|
|
$
|
3.09
|
|
|
|
|
|
||
Outstanding as of December 31, 2012
|
274,512
|
|
|
$
|
1.92
|
|
|
|
|
|
||
Granted
|
57,228
|
|
|
$
|
3.59
|
|
|
|
|
|
||
Exercised
|
(61,056
|
)
|
|
$
|
1.31
|
|
|
|
|
|
||
Forfeited, cancelled or expired
|
(6,445
|
)
|
|
$
|
2.02
|
|
|
|
|
|
||
Outstanding as of December 31, 2013
|
264,239
|
|
|
$
|
2.42
|
|
|
7.12
|
|
$
|
327,398
|
|
Exercisable as of December 31, 2013
|
114,278
|
|
|
$
|
2.26
|
|
|
5.29
|
|
$
|
179,549
|
|
(1)
|
The weighted-average exercise price for options outstanding as of December 28, 2012 were adjusted in 2012 to reflect the reduction to the exercise price related to the December 2012 special cash dividend.
|
|
Shares
|
|
Grant Date Fair Value
|
|||
Nonvested as of January 1, 2011
|
2,397
|
|
|
$
|
2.57
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Vested restricted stock awards
|
(1,854
|
)
|
|
$
|
3.30
|
|
Vested restricted stock units
|
(101
|
)
|
|
$
|
3.08
|
|
Forfeited
|
(21
|
)
|
|
$
|
3.05
|
|
Nonvested as of December 31, 2011
|
421
|
|
|
$
|
1.46
|
|
Granted
|
8
|
|
|
$
|
—
|
|
Vested restricted stock awards
|
—
|
|
|
$
|
—
|
|
Vested restricted stock units
|
—
|
|
|
$
|
—
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Nonvested as of December 31, 2012
|
429
|
|
|
$
|
3.25
|
|
Granted
|
6,873
|
|
|
$
|
3.59
|
|
Vested restricted stock units
|
(192
|
)
|
|
$
|
3.27
|
|
Forfeited
|
(126
|
)
|
|
$
|
3.61
|
|
Nonvested as of December 31, 2013
|
6,984
|
|
|
$
|
3.58
|
|
(16)
|
Commitments and Contingencies
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt obligations
|
$
|
509,663
|
|
|
$
|
7,359
|
|
|
$
|
4,140
|
|
|
$
|
460,799
|
|
|
$
|
—
|
|
|
$
|
2,650,000
|
|
|
$
|
3,631,961
|
|
Cash interest payments
|
187,905
|
|
|
152,440
|
|
|
152,255
|
|
|
152,699
|
|
|
138,063
|
|
|
399,813
|
|
|
1,183,175
|
|
|||||||
Satellite and transmission
|
37,849
|
|
|
13,993
|
|
|
4,321
|
|
|
3,404
|
|
|
3,992
|
|
|
16,524
|
|
|
80,083
|
|
|||||||
Programming and content
|
245,069
|
|
|
218,373
|
|
|
96,737
|
|
|
72,837
|
|
|
60,150
|
|
|
108,333
|
|
|
801,499
|
|
|||||||
Marketing and distribution
|
32,578
|
|
|
15,332
|
|
|
9,951
|
|
|
6,700
|
|
|
6,173
|
|
|
6,639
|
|
|
77,373
|
|
|||||||
Satellite incentive payments
|
11,511
|
|
|
11,439
|
|
|
12,290
|
|
|
13,212
|
|
|
14,212
|
|
|
55,398
|
|
|
118,062
|
|
|||||||
Operating lease obligations
|
38,181
|
|
|
43,053
|
|
|
36,860
|
|
|
30,475
|
|
|
28,825
|
|
|
221,626
|
|
|
399,020
|
|
|||||||
Other
|
41,021
|
|
|
9,989
|
|
|
3,209
|
|
|
851
|
|
|
367
|
|
|
—
|
|
|
55,437
|
|
|||||||
Total
(1)
|
$
|
1,103,777
|
|
|
$
|
471,978
|
|
|
$
|
319,763
|
|
|
$
|
740,977
|
|
|
$
|
251,782
|
|
|
$
|
3,458,333
|
|
|
$
|
6,346,610
|
|
(1)
|
The table does not include our reserve for uncertain tax positions, which at
December 31, 2013
totaled
$1,432
, as the specific timing of any cash payments cannot be projected with reasonable certainty.
|
(17)
|
Income Taxes
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Current taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
5,359
|
|
|
1,319
|
|
|
3,229
|
|
|||
Foreign
|
(5,269
|
)
|
|
2,265
|
|
|
2,741
|
|
|||
Total current taxes
|
90
|
|
|
3,584
|
|
|
5,970
|
|
|||
Deferred taxes:
|
|
|
|
|
|
||||||
Federal
|
211,044
|
|
|
(2,729,823
|
)
|
|
3,991
|
|
|||
State
|
48,743
|
|
|
(271,995
|
)
|
|
4,273
|
|
|||
Total deferred taxes
|
259,787
|
|
|
(3,001,818
|
)
|
|
8,264
|
|
|||
Total income tax expense (benefit)
|
$
|
259,877
|
|
|
$
|
(2,998,234
|
)
|
|
$
|
14,234
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Federal tax expense, at statutory rate
|
$
|
222,982
|
|
|
$
|
166,064
|
|
|
$
|
154,418
|
|
State income tax expense, net of federal benefit
|
19,031
|
|
|
16,606
|
|
|
15,751
|
|
|||
State income rate changes
|
8,666
|
|
|
2,251
|
|
|
3,851
|
|
|||
Non-deductible expenses
|
9,545
|
|
|
477
|
|
|
457
|
|
|||
Change in valuation allowance
|
(4,228
|
)
|
|
(3,195,651
|
)
|
|
(166,452
|
)
|
|||
Other, net
|
3,881
|
|
|
12,019
|
|
|
6,209
|
|
|||
Income tax expense (benefit)
|
$
|
259,877
|
|
|
$
|
(2,998,234
|
)
|
|
$
|
14,234
|
|
|
For the Years Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
2,207,583
|
|
|
$
|
2,493,239
|
|
GM payments and liabilities
|
1,984
|
|
|
80,742
|
|
||
Deferred revenue
|
606,430
|
|
|
511,700
|
|
||
Severance accrual
|
388
|
|
|
46
|
|
||
Accrued bonus
|
25,830
|
|
|
23,798
|
|
||
Expensed costs capitalized for tax
|
22,679
|
|
|
26,569
|
|
||
Loan financing costs
|
664
|
|
|
428
|
|
||
Investments
|
45,078
|
|
|
39,915
|
|
||
Stock based compensation
|
71,794
|
|
|
64,636
|
|
||
Other
|
31,735
|
|
|
34,705
|
|
||
Total deferred tax assets
|
3,014,165
|
|
|
3,275,778
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation of property and equipment
|
(188,675
|
)
|
|
(185,007
|
)
|
||
FCC license
|
(778,152
|
)
|
|
(772,550
|
)
|
||
Other intangible assets
|
(233,983
|
)
|
|
(165,227
|
)
|
||
Total deferred tax liabilities
|
(1,200,810
|
)
|
|
(1,122,784
|
)
|
||
Net deferred tax assets before valuation allowance
|
1,813,355
|
|
|
2,152,994
|
|
||
Valuation allowance
|
(7,831
|
)
|
|
(9,835
|
)
|
||
Total net deferred tax asset
|
$
|
1,805,524
|
|
|
$
|
2,143,159
|
|
|
2013
|
|
2012
|
||||
Balance, beginning of year
|
$
|
1,432
|
|
|
$
|
1,432
|
|
Additions for tax positions from prior years
|
—
|
|
|
—
|
|
||
Balance, end of year
|
$
|
1,432
|
|
|
$
|
1,432
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Federal tax expense, at statutory rate
|
$
|
67,684
|
|
|
$
|
166,064
|
|
|
$
|
154,418
|
|
State income tax expense, net of federal benefit
|
4,467
|
|
|
16,606
|
|
|
15,751
|
|
|||
State income rate changes
|
8,666
|
|
|
2,251
|
|
|
3,851
|
|
|||
Non-deductible expenses
|
699
|
|
|
477
|
|
|
457
|
|
|||
Change in valuation allowance
|
(4,228
|
)
|
|
(3,195,651
|
)
|
|
(166,452
|
)
|
|||
Fair value of debt instrument
|
178,704
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
3,885
|
|
|
12,019
|
|
|
6,209
|
|
|||
Income tax expense (benefit)
|
$
|
259,877
|
|
|
$
|
(2,998,234
|
)
|
|
$
|
14,234
|
|
|
Sirius XM Holdings Inc.
|
||||||||||||||
|
For the Three Months Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2013
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
897,398
|
|
|
$
|
940,110
|
|
|
$
|
961,509
|
|
|
$
|
1,000,078
|
|
Cost of services
|
$
|
(330,257
|
)
|
|
$
|
(331,465
|
)
|
|
$
|
(336,464
|
)
|
|
$
|
(396,304
|
)
|
Income from operations
|
$
|
246,931
|
|
|
$
|
267,736
|
|
|
$
|
284,529
|
|
|
$
|
245,357
|
|
Net income
|
$
|
123,602
|
|
|
$
|
125,522
|
|
|
$
|
62,894
|
|
|
$
|
65,197
|
|
Net income per common share--basic
(1)
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Net income per common share--diluted
(1)
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
2012
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
804,722
|
|
|
$
|
837,543
|
|
|
$
|
867,360
|
|
|
$
|
892,415
|
|
Cost of services
|
$
|
(292,309
|
)
|
|
$
|
(293,975
|
)
|
|
$
|
(314,204
|
)
|
|
$
|
(328,882
|
)
|
Income from operations
|
$
|
199,238
|
|
|
$
|
227,942
|
|
|
$
|
231,749
|
|
|
$
|
213,096
|
|
Net income
|
$
|
107,774
|
|
|
$
|
3,134,170
|
|
|
$
|
74,514
|
|
|
$
|
156,244
|
|
Net income per common share--basic
(1)
|
$
|
0.02
|
|
|
$
|
0.49
|
|
|
$
|
0.01
|
|
|
$
|
0.02
|
|
Net income per common share--diluted
(1)
|
$
|
0.02
|
|
|
$
|
0.48
|
|
|
$
|
0.01
|
|
|
$
|
0.02
|
|
(1)
|
The sum of quarterly net income per share applicable to common stockholders (basic and diluted) does not necessarily agree to the net income per share for the year due to the timing of common stock issuances.
|
|
Sirius XM Radio Inc.
|
||||||||||||||
|
For the Three Months Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2013
(1)
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
897,398
|
|
|
$
|
940,110
|
|
|
$
|
961,509
|
|
|
$
|
1,000,078
|
|
Cost of services
|
$
|
(330,257
|
)
|
|
$
|
(331,465
|
)
|
|
$
|
(336,464
|
)
|
|
$
|
(396,304
|
)
|
Income from operations
|
$
|
246,931
|
|
|
$
|
267,736
|
|
|
$
|
284,529
|
|
|
$
|
245,357
|
|
Net income (loss) attributable to Sirius XM's sole stockholder
|
$
|
123,602
|
|
|
$
|
125,522
|
|
|
$
|
62,894
|
|
|
$
|
(378,512
|
)
|
2012
(1)
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
804,722
|
|
|
$
|
837,543
|
|
|
$
|
867,360
|
|
|
$
|
892,415
|
|
Cost of services
|
$
|
(292,309
|
)
|
|
$
|
(293,975
|
)
|
|
$
|
(314,204
|
)
|
|
$
|
(328,882
|
)
|
Income from operations
|
$
|
199,238
|
|
|
$
|
227,942
|
|
|
$
|
231,749
|
|
|
$
|
213,096
|
|
Net income attributable to Sirius XM's sole stockholder
|
$
|
107,774
|
|
|
$
|
3,134,170
|
|
|
$
|
74,514
|
|
|
$
|
156,244
|
|
(1)
|
Net income per share for Sirius XM is not presented since Sirius XM is a wholly-owned subsidiary of Holdings.
|
(in thousands)
|
Balance January 1,
|
|
Charged to Expenses (Benefit)
|
|
Write-offs/ Payments/ Other
|
|
Balance December 31,
|
||||||
Description
|
|
|
|
|
|
|
|
||||||
2011
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
10,222
|
|
|
33,164
|
|
|
(33,454
|
)
|
|
$
|
9,932
|
|
Deferred tax assets—valuation allowance
|
$
|
3,551,288
|
|
|
(166,452
|
)
|
|
(24,096
|
)
|
|
$
|
3,360,740
|
|
2012
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
9,932
|
|
|
34,548
|
|
|
(32,769
|
)
|
|
$
|
11,711
|
|
Deferred tax assets—valuation allowance
|
$
|
3,360,740
|
|
|
(3,195,651
|
)
|
|
(155,254
|
)
|
|
$
|
9,835
|
|
2013
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
11,711
|
|
|
39,016
|
|
|
(41,649
|
)
|
|
$
|
9,078
|
|
Deferred tax assets—valuation allowance
|
$
|
9,835
|
|
|
(4,228
|
)
|
|
2,224
|
|
|
$
|
7,831
|
|
Exhibit
|
|
|
Description
|
||
|
|
|
|
||
2.1
|
|
|
Certificate of Ownership and Merger, dated as of January 12, 2011, merging XM Satellite Radio Inc. with and into Sirius XM Radio Inc. (incorporated by reference to Exhibit 3.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on January 12, 2011).
|
||
|
|
|
|||
2.2
|
|
|
Agreement and Plan of Merger, dated as of November 14, 2013, by and among Sirius XM Radio Inc., Sirius XM Holdings Inc. and Sirius XM Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013).
|
||
|
|
|
|||
3.1
|
|
|
Amended and Restated Certificate of Incorporation of Sirius XM Holdings Inc. (incorporated by reference to Exhibit 3.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013).
|
||
|
|
|
|||
3.2
|
|
|
Amended and Restated By-Laws of Sirius XM Holdings Inc. (incorporated by reference to Exhibit 3.2 to Holdings Current Report on Form 8-K filed on November 15, 2013).
|
||
|
|
|
|||
3.3
|
|
|
Amended and Restated Certificate of Incorporation of Sirius XM Radio Inc., as amended (filed herewith).
|
||
|
|
|
|||
3.4
|
|
|
Amended and Restated By-Laws of Sirius XM Radio Inc., as amended (filed herewith).
|
||
|
|
|
|||
3.5
|
|
|
Certificate of Elimination of Series A Convertible Preferred Stock, Convertible Perpetual Preferred Stock, Series B-1, Convertible Perpetual Non-Voting Preferred Stock, Series B-2, and Series C Junior Preferred Stock of Sirius XM Radio Inc. (incorporated by reference to Exhibit 3.3 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013).
|
||
|
|
|
|||
4.1
|
|
|
Form of certificate for shares of Sirius XM Holdings Inc.’s common stock (filed herewith).
|
||
|
|
|
|||
4.2
|
|
|
Indenture, dated as of August 1, 2008, among XM Satellite Radio Inc., XM Satellite Radio Holdings Inc., XM Equipment Leasing LLC, XM Radio Inc., Sirius Satellite Radio Inc. and The Bank of New York Mellon, as trustee, relating to the 7% Exchangeable Senior Subordinated Notes due 2014 (incorporated by reference to Exhibit 4.80 to Sirius XM Radio Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).
|
||
|
|
|
|||
4.3
|
|
|
Registration Rights Agreement, dated as of August 1, 2008, among Sirius Satellite Radio Inc., XM Satellite Radio Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated and UBS Securities LLC, relating to the 7% Exchangeable Senior Subordinated Notes due 2014 (incorporated by reference to Exhibit 4.81 to Sirius XM Radio Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).
|
||
|
|
|
|||
4.4
|
|
|
Supplemental Indenture, dated as of April 14, 2010, among XM Satellite Radio Inc., certain subsidiaries thereof and The Bank of New York Mellon, as trustee, relating to the 7% Exchangeable Senior Subordinated Notes due 2014 (incorporated by reference to Exhibit 4.4 to XM Satellite Radio Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010).
|
||
|
|
|
|||
4.5
|
|
|
Supplemental Indenture, dated as of January 12, 2011, by and among XM Satellite Radio Inc., Sirius XM Radio Inc., the guarantors named therein and The Bank of New York Mellon, as trustee, relating to the 7% Exchangeable Senior Subordinated Notes due 2014 (incorporated by reference to Exhibit 4.3 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on January 12, 2011).
|
||
|
|
|
|||
4.6
|
|
|
Supplemental Indenture, dated as of November 15, 2013, among Sirius XM Radio Inc., Sirius XM Holdings Inc., the guarantors named therein and The Bank of New York Mellon, as Trustee, relating to the 7% Exchangeable Senior Subordinated Notes due 2014 (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013).
|
||
|
|
|
|||
4.7
|
|
|
Indenture, dated as of August 13, 2012, among Sirius XM Radio Inc., the guarantors thereto and U.S. Bank National Association, as trustee, relating to Sirius XM Radio Inc.’s 5.25% Senior Notes due 2022 (incorporated by reference to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on August 14, 2012).
|
||
|
|
|
|||
4.8
|
|
|
Indenture, dated as of May 16, 2013, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 4.25% Senior Notes due 2020 (incorporated by reference to Exhibit 4.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on May 20, 2013).
|
||
|
|
|
Exhibit
|
|
|
Description
|
||
4.9
|
|
|
Indenture, dated as of May 16, 2013, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 4.625% Senior Notes due 2023 (incorporated by reference to Exhibit 4.2 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on May 20, 2013).
|
||
|
|
|
|||
4.10
|
|
|
Indenture, dated as of August 1, 2013, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.75% Senior Notes due 2021 (incorporated by reference to Exhibit 4.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on August 1, 2013).
|
||
|
|
|
|||
4.11
|
|
|
Indenture, dated as of September 24, 2013, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.875% Senior Notes due 2020 (incorporated by reference to Exhibit 4.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on September 25, 2013).
|
||
|
|
|
|||
4.12
|
|
|
Form of Common Stock Purchase Warrant, dated as of January 27, 2009, issued by Sirius XM Radio Inc. to NFL Enterprises LLC (incorporated by reference to Exhibit 4.48 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
||
|
|
|
|||
4.13
|
|
|
Sirius XM Holdings Inc.’s Assumption of NFL Enterprises LLC Warrant, dated as of November 15, 2013 (filed herewith).
|
||
|
|
|
|||
4.14
|
|
|
Investment Agreement, dated as of February 17, 2009, between Sirius XM Radio Inc. and Liberty Radio LLC (incorporated by reference to Exhibit 4.55 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
||
|
|
|
|||
4.15
|
|
|
Assignment and Assumption of Investment Agreement among Sirius XM Radio Inc., Sirius XM Holdings Inc. and Liberty Radio LLC, dated as of November 15, 2013 (filed herewith).
|
||
|
|
|
|||
10.1
|
|
|
Credit Agreement, dated as of December 5, 2012, among Sirius XM Radio Inc., JPMorgan Chase Bank, N.A. as administrative agent, and the other agents and lenders party thereto (incorporated by reference to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on December 10, 2012).
|
||
|
|
|
|||
**10.2
|
|
|
Technology Licensing Agreement among XM Satellite Radio Inc., XM Satellite Radio Holdings Inc., WorldSpace Management Corporation and American Mobile Satellite Corporation, dated as of January 1, 1998, amended by Amendment No. 1 to Technology Licensing Agreement (incorporated by reference to Exhibit 10.3 to XM Satellite Radio Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
||
|
|
|
|||
***10.3
|
|
|
Third Amended and Restated Distribution and Credit Agreement, dated as of February 6, 2008, among General Motors Corporation, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. (incorporated by reference to Exhibit 10.63 to XM Satellite Radio Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
||
|
|
|
|||
**10.4
|
|
|
Third Amended and Restated Satellite Purchase Contract for In-Orbit Delivery, dated as of May 15, 2001, between XM Satellite Radio Inc. and Boeing Satellite Systems International, Inc. (incorporated by reference to Exhibit 10.36 to Amendment No. 1 to XM Satellite Radio Holdings Inc.’s Registration Statement on Form S-3 (File No. 333-89132)).
|
||
|
|
|
|||
10.5
|
|
|
Assignment and Novation Agreement, dated as of December 5, 2001, between XM Satellite Radio Inc., XM Satellite Radio Holdings Inc. and Boeing Satellite Systems International, Inc. (incorporated by reference to Exhibit 10.3 to XM Satellite Radio Holdings Inc.’s Current Report on Form 8-K filed on December 6, 2001).
|
||
|
|
|
|||
**10.6
|
|
|
Amendment to the Satellite Purchase Contract for In-Orbit Delivery, dated as of December 5, 2001, between XM Satellite Radio Inc. and Boeing Satellite Systems International, Inc. (incorporated by reference to Exhibit 10.4 to XM Satellite Radio Holdings Inc.’s Current Report on Form 8-K filed on December 6, 2001).
|
||
|
|
|
|||
**10.7
|
|
|
Amended and Restated Amendment to the Satellite Purchase Contract for In-Orbit Delivery, dated May 22, 2003, among XM Satellite Radio Inc., XM Satellite Radio Holdings Inc. and Boeing Satellite Systems International, Inc. (incorporated by reference to Exhibit 10.53 to XM Satellite Radio Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
|
||
|
|
|
|||
**10.8
|
|
|
Amendment to the Satellite Purchase Contract for In-Orbit Delivery, dated July 31, 2003, among XM Satellite Radio Inc., XM Satellite Radio Holdings Inc. and Boeing Satellite Systems International, Inc. (incorporated by reference to Exhibit 10.54 to XM Satellite Radio Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
|
||
|
|
|
Exhibit
|
|
|
Description
|
||
|
|
|
|||
**10.9
|
|
|
Amendment to the Satellite Purchase Contract for In-Orbit Delivery, dated December 19, 2003, among XM Satellite Radio Inc., XM Satellite Radio Holdings Inc. and Boeing Satellite Systems International, Inc. (incorporated by reference to Exhibit 10.57 to XM Satellite Radio Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2003).
|
||
|
|
|
|||
10.10
|
|
|
Amended and Restated Assignment and Use Agreement, dated as of January 28, 2003, between XM Satellite Radio Inc. and XM Radio Inc. (incorporated by reference to Exhibit 10.7 to XM Satellite Radio Holdings Inc.’s Current Report on Form 8-K filed on January 29, 2003).
|
||
|
|
|
|||
*10.11
|
|
|
Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.10 to Sirius XM Radio Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).
|
||
|
|
|
|||
*10.12
|
|
|
Form of Stock Option Agreement between CD Radio Inc. and each Optionee (incorporated by reference to Exhibit 10.16.2 to Sirius XM Radio Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998).
|
||
|
|
|
|||
*10.13
|
|
|
CD Radio Inc. 401(k) Savings Plan (incorporated by reference to Exhibit 4.4 to CD Radio Inc.’s Registration Statement on Form S-8 (File No. 333-65473)).
|
||
|
|
|
|||
*10.14
|
|
|
XM Satellite Radio Holdings Inc. 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.5 to XM Satellite Radio Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).
|
||
|
|
|
|||
*10.15
|
|
|
Form of Non-Qualified Stock Option Agreement pursuant to the XM Satellite Radio Holdings Inc. 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to XM Satellite Radio Holdings Inc.’s Current Report on Form 8-K filed June 1, 2007).
|
||
|
|
|
|||
*10.16
|
|
|
Form of Restricted Stock Agreement pursuant to the XM Satellite Radio Holdings Inc. 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to XM Satellite Radio Holdings Inc.’s Current Report on Form 8-K filed June 1, 2007).
|
||
|
|
|
|||
*10.17
|
|
|
Sirius XM Radio 401(k) Savings Plan, January 1, 2009 Restatement (incorporated by reference to Exhibit 10.30 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2009).
|
||
|
|
|
|||
*10.18
|
|
|
Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 4.9 to Sirius XM Radio Inc.’s Registration Statement on Form S-8 (File No. 333- 160386)).
|
||
|
|
|
|||
*10.19
|
|
|
Form of Director Non-Qualified Stock Option Agreement pursuant to the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.34 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011).
|
||
|
|
|
|||
*10.20
|
|
|
Form of Non-Qualified Stock Option Agreement pursuant to the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.35 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011).
|
||
|
|
|
|||
*10.21
|
|
|
Employment Agreement, dated as of July 21, 2011, between Sirius XM Radio Inc. and David J. Frear (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on July 22, 2011).
|
||
|
|
|
|||
*10.22
|
|
|
Employment Agreement, dated as of August 23, 2011, between Sirius XM Radio Inc. and Dara F. Altman (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on August 24, 2011).
|
||
|
|
|
|||
*10.23
|
|
|
Form of Option Award Agreement between Sirius XM Radio Inc. and James E. Meyer (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed October 16, 2009).
|
||
|
|
|
|||
*10.24
|
|
|
Employment Agreement, dated as of April 29, 2013, between Sirius XM Radio Inc. and James E. Meyer (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K dated April 30, 2013).
|
||
|
|
|
|||
*10.25
|
|
|
Employment Agreement, dated as of July 22, 2013, between Sirius XM Radio Inc. and Scott A. Greenstein (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K dated July 23, 2013).
|
||
|
|
|
|||
*10.26
|
|
|
Form of Option Award Agreement between Sirius XM Radio Inc. and Patrick L. Donnelly (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed January 15, 2010).
|
||
|
|
|
Exhibit
|
|
|
Description
|
||
|
|
|
|||
*10.27
|
|
|
Employment Agreement, dated as of January 10, 2014, between Sirius XM Radio Inc. and Patrick L. Donnelly (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on January 14, 2014).
|
||
|
|
|
|||
*10.28
|
|
|
Assignment and Assumption Agreement, dated as of November 15, 2013, among Sirius XM Holdings Inc. and Sirius XM Radio Inc. (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013).
|
||
|
|
|
|||
*10.29
|
|
|
Omnibus Amendment, dated November 15, 2013, to the XM Satellite Radio Holdings Inc. Talent Option Plan, the XM Satellite Radio Holdings Inc. 1998 Shares Award Plan, as amended, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the XM Satellite Radio Holdings Inc. 2007 Stock Incentive Plan and the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan and their Related Stock Option Agreements, Restricted Stock Agreements and Restricted Stock Unit Agreements (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013).
|
||
|
|
|
|||
21.1
|
|
|
List of Subsidiaries (filed herewith).
|
||
|
|
|
|||
23.1
|
|
|
Consent of KPMG LLP (filed herewith).
|
||
|
|
|
|||
31.1
|
|
|
Certificate of James E. Meyer, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
|
|
|
|||
31.2
|
|
|
Certificate of David J. Frear, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
|
|
|
|||
32.1
|
|
|
Certificate of James E. Meyer, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
|
|
|
|||
32.2
|
|
|
Certificate of David J. Frear, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
||
|
|
|
|||
101.1
|
|
|
The following financial information from Sirius XM Holdings Inc. and Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2013 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011; (ii) Consolidated Balance Sheets as of December 31, 2013 and 2012; (iii) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2013, 2012 and 2011; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011; and (v) Combined Notes to Consolidated Financial Statements.
|
*
|
This document has been identified as a management contract or compensatory plan or arrangement.
|
**
|
Pursuant to the Commission’s Orders Granting Confidential Treatment under Rule 406 of the Securities Act of 1933 or Rule 24(b)-2 under the Securities Exchange Act of 1934, certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text.
|
***
|
Confidential treatment has been requested with respect to portions of this Exhibit that have been omitted by redacting a portion of the text.
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended
December 31, 2013
of Sirius XM Holdings Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any changes in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
By:
|
/s/ J
AMES
E. M
EYER
|
|
James E. Meyer
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended
December 31, 2013
of Sirius XM Holdings Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any changes in the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
By:
|
/s/ D
AVID
J. F
REAR
|
|
David J. Frear
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
By:
|
/s/ J
AMES
E. M
EYER
|
|
James E. Meyer
Chief Executive Officer
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
By:
|
/s/ D
AVID
J. F
REAR
|
|
David J. Frear
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|