Price Graph
Price
Yield
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2014
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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 No.)
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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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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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(Class)
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(Outstanding as of October 24, 2014)
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COMMON STOCK, $0.001 PAR VALUE
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5,494,443,257
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SHARES
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Item No.
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Description
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For the Three Months Ended September 30,
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For the Nine Months Ended September 30,
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||||||||||||
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(in thousands, except per share data)
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2014
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2013
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2014
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2013
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||||||||
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Revenue:
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||||||||
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Subscriber revenue
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$
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902,514
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$
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834,053
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$
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2,632,110
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$
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2,432,113
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Advertising revenue
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25,300
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21,918
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73,012
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63,886
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||||
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Equipment revenue
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23,129
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|
17,989
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74,723
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|
|
54,588
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||||
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Other revenue
|
106,144
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|
87,549
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310,298
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|
248,430
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||||
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Total revenue
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1,057,087
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|
961,509
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|
3,090,143
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|
|
2,799,017
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||||
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Operating expenses:
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||||||||
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Cost of services:
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||||||||
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Revenue share and royalties
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204,307
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162,627
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599,939
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467,017
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||||
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Programming and content
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74,920
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72,322
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219,360
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217,313
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Customer service and billing
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93,013
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76,322
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274,174
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237,006
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Satellite and transmission
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21,794
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19,853
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64,446
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59,041
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||||
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Cost of equipment
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9,485
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5,340
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29,319
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17,809
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||||
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Subscriber acquisition costs
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119,778
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125,457
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367,207
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371,560
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||||
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Sales and marketing
|
83,906
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75,638
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237,992
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209,594
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||||
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Engineering, design and development
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16,136
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13,007
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47,677
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42,901
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||||
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General and administrative
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75,170
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67,881
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223,995
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184,613
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Depreciation and amortization
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64,550
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58,533
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200,021
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192,966
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Total operating expenses
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763,059
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676,980
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2,264,130
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1,999,820
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Income from operations
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294,028
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284,529
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826,013
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799,197
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Other income (expense):
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Interest expense, net of amounts capitalized
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(75,416
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)
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(54,629
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)
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(197,029
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)
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(150,531
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)
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||||
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Loss on extinguishment of debt and credit facilities, net
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—
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(107,971
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)
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—
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(124,348
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)
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Interest and investment income
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6,305
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1,716
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9,588
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3,648
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Loss on change in value of derivatives
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—
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—
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(34,485
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)
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—
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||||
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Other income (loss)
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297
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407
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(1,354
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)
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|
909
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Total other expense
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(68,814
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)
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(160,477
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)
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(223,280
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)
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(270,322
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)
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||||
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Income before income taxes
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225,214
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124,052
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602,733
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528,875
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||||
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Income tax expense
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(89,044
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)
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(61,158
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)
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(252,614
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)
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(216,857
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)
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||||
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Net income
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$
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136,170
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$
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62,894
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$
|
350,119
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$
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312,018
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Foreign currency translation adjustment, net of tax
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(58
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)
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(11
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)
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20
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(292
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)
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||||
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Total comprehensive income
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$
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136,112
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$
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62,883
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$
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350,139
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$
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311,726
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Net income per common share:
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||||||||
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Basic
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$
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0.02
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$
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0.01
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$
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0.06
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$
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0.05
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Diluted
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$
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0.02
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$
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0.01
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$
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0.06
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$
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0.05
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Weighted average common shares outstanding:
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||||||||
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Basic
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5,626,078
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6,184,216
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5,860,248
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6,265,981
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||||
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Diluted
|
5,974,047
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6,287,353
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|
|
6,208,569
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|
6,446,082
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|
||||
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|
September 30, 2014
|
|
December 31, 2013
|
||||
|
(in thousands, except share and per share data)
|
(unaudited)
|
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|
||||
|
ASSETS
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|
||||
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Current assets:
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|
||||
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Cash and cash equivalents
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$
|
103,585
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$
|
134,805
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Accounts receivable, net
|
102,646
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|
103,937
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|
||
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Receivables from distributors
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104,147
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|
88,975
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|
||
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Inventory, net
|
24,350
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|
13,863
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|
||
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Prepaid expenses
|
126,131
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|
|
110,530
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|
||
|
Related party current assets
|
4,006
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|
9,145
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|
||
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Deferred tax asset
|
784,143
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937,598
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|
||
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Other current assets
|
10,444
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|
|
20,160
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|
||
|
Total current assets
|
1,259,452
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|
1,419,013
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|
||
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Property and equipment, net
|
1,522,635
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1,594,574
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|
||
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Long-term restricted investments
|
5,922
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|
|
5,718
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|
||
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Deferred financing fees, net
|
12,679
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|
12,604
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|
||
|
Intangible assets, net
|
2,658,476
|
|
|
2,700,062
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|
||
|
Goodwill
|
2,205,107
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|
2,204,553
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|
||
|
Related party long-term assets
|
1,679
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|
|
30,164
|
|
||
|
Long-term deferred tax asset
|
775,147
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|
|
868,057
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|
||
|
Other long-term assets
|
8,260
|
|
|
10,035
|
|
||
|
Total assets
|
$
|
8,449,357
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|
|
$
|
8,844,780
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|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
|
Current liabilities:
|
|
|
|
||||
|
Accounts payable and accrued expenses
|
$
|
552,412
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|
|
$
|
578,333
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|
|
Accrued interest
|
75,984
|
|
|
42,085
|
|
||
|
Current portion of deferred revenue
|
1,612,388
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|
|
1,586,611
|
|
||
|
Current portion of deferred credit on executory contracts
|
2,339
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|
|
3,781
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|
||
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Current maturities of long-term debt
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498,433
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|
496,815
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|
||
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Current maturities of long-term related party debt
|
10,992
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|
10,959
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Related party current liabilities
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3,268
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|
|
20,320
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|
||
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Total current liabilities
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2,755,816
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2,738,904
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||
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Deferred revenue
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148,474
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|
149,026
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||
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Deferred credit on executory contracts
|
—
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1,394
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|
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Long-term debt
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4,259,646
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|
3,093,821
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||
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Related party long-term liabilities
|
14,345
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|
|
16,337
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|
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Other long-term liabilities
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97,661
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|
|
99,556
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|
||
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Total liabilities
|
7,275,942
|
|
|
6,099,038
|
|
||
|
Commitments and contingencies (Note 16)
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|
||||
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Stockholders’ equity:
|
|
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|
||||
|
Preferred stock, undesignated, par value $0.001 (liquidation preference of $0.001 per share); 50,000,000 shares authorized and 0 shares issued and outstanding at September 30, 2014 and December 31, 2013
|
—
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|
|
—
|
|
||
|
Common stock, par value $0.001; 9,000,000,000 shares authorized; 5,542,621,493 and 6,096,220,526 shares issued; 5,538,190,736 and 6,096,220,526 outstanding at September 30, 2014 and December 31, 2013, respectively
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5,543
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|
|
6,096
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|
||
|
Accumulated other comprehensive loss, net of tax
|
(288
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)
|
|
(308
|
)
|
||
|
Additional paid-in capital
|
6,767,781
|
|
|
8,674,129
|
|
||
|
Treasury stock, at cost; 4,430,757 and 0 shares of common stock at September 30, 2014 and December 31, 2013, respectively
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(15,565
|
)
|
|
—
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|
||
|
Accumulated deficit
|
(5,584,056
|
)
|
|
(5,934,175
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)
|
||
|
Total stockholders’ equity
|
1,173,415
|
|
|
2,745,742
|
|
||
|
Total liabilities and stockholders’ equity
|
$
|
8,449,357
|
|
|
$
|
8,844,780
|
|
|
|
Convertible Perpetual
Preferred Stock, Series B-1 |
|
Common Stock
|
|
|
|
|
|
Treasury Stock
|
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|
|||||||||||||||||||||||
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(in thousands, except share data)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Accumulated Other Comprehensive Loss
|
|
Additional
Paid-in
Capital
|
|
Shares
|
|
Amount
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||||||||
|
Balance at December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
6,096,220,526
|
|
|
$
|
6,096
|
|
|
$
|
(308
|
)
|
|
$
|
8,674,129
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,934,175
|
)
|
|
$
|
2,745,742
|
|
|
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,119
|
|
|
350,139
|
|
|||||||
|
Share-based payment expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,832
|
|
|||||||
|
Exercise of options and vesting of restricted stock units
|
—
|
|
|
—
|
|
|
11,922,805
|
|
|
12
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
331
|
|
|||||||
|
Minimum withholding taxes on net share settlement of stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,809
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,809
|
)
|
|||||||
|
Conversion of Exchangeable Notes to common stock
|
—
|
|
|
—
|
|
|
3,259
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
|
Issuance of common stock upon exercise of warrants
|
—
|
|
|
—
|
|
|
99,349
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Common stock repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68,118
|
)
|
|
570,055,203
|
|
|
(1,887,708
|
)
|
|
—
|
|
|
(1,955,826
|
)
|
|||||||
|
Common stock retired
|
—
|
|
|
—
|
|
|
(565,624,446
|
)
|
|
(565
|
)
|
|
—
|
|
|
(1,871,578
|
)
|
|
(565,624,446
|
)
|
|
1,872,143
|
|
|
—
|
|
|
—
|
|
|||||||
|
Balance at September 30, 2014
|
—
|
|
|
$
|
—
|
|
|
5,542,621,493
|
|
|
$
|
5,543
|
|
|
$
|
(288
|
)
|
|
$
|
6,767,781
|
|
|
4,430,757
|
|
|
$
|
(15,565
|
)
|
|
$
|
(5,584,056
|
)
|
|
$
|
1,173,415
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
(in thousands)
|
2014
|
|
2013
|
||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income
|
$
|
350,119
|
|
|
$
|
312,018
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization
|
200,021
|
|
|
192,966
|
|
||
|
Non-cash interest expense, net of amortization of premium
|
16,515
|
|
|
16,506
|
|
||
|
Provision for doubtful accounts
|
32,875
|
|
|
28,571
|
|
||
|
Amortization of deferred income related to equity method investment
|
(2,081
|
)
|
|
(2,082
|
)
|
||
|
Loss on extinguishment of debt and credit facilities, net
|
—
|
|
|
124,348
|
|
||
|
Gain on unconsolidated entity investments, net
|
(2,677
|
)
|
|
(2,831
|
)
|
||
|
Dividend received from unconsolidated entity investment
|
12,873
|
|
|
17,707
|
|
||
|
Loss on disposal of assets
|
217
|
|
|
128
|
|
||
|
Loss on change in value of derivatives
|
34,485
|
|
|
—
|
|
||
|
Share-based payment expense
|
57,832
|
|
|
49,774
|
|
||
|
Deferred income taxes
|
244,667
|
|
|
219,184
|
|
||
|
Other non-cash purchase price adjustments
|
(2,836
|
)
|
|
(206,786
|
)
|
||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|||
|
Accounts receivable
|
(31,584
|
)
|
|
(25,207
|
)
|
||
|
Receivables from distributors
|
(15,172
|
)
|
|
23,606
|
|
||
|
Inventory
|
(10,487
|
)
|
|
11,095
|
|
||
|
Related party assets
|
(995
|
)
|
|
2,077
|
|
||
|
Prepaid expenses and other current assets
|
(16,319
|
)
|
|
(6,665
|
)
|
||
|
Other long-term assets
|
1,567
|
|
|
(363
|
)
|
||
|
Accounts payable and accrued expenses
|
(36,861
|
)
|
|
(58,680
|
)
|
||
|
Accrued interest
|
33,899
|
|
|
19,964
|
|
||
|
Deferred revenue
|
25,225
|
|
|
34,530
|
|
||
|
Related party liabilities
|
(1,261
|
)
|
|
(635
|
)
|
||
|
Other long-term liabilities
|
(1,854
|
)
|
|
(4,968
|
)
|
||
|
Net cash provided by operating activities
|
888,168
|
|
|
744,257
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Additions to property and equipment
|
(87,244
|
)
|
|
(118,235
|
)
|
||
|
Purchases of restricted and other investments
|
—
|
|
|
(1,719
|
)
|
||
|
Acquisition of business, net of cash acquired
|
1,144
|
|
|
—
|
|
||
|
Return of capital from investment in unconsolidated entity
|
24,178
|
|
|
—
|
|
||
|
Net cash used in investing activities
|
(61,922
|
)
|
|
(119,954
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Proceeds from exercise of stock options
|
331
|
|
|
21,819
|
|
||
|
Taxes paid in lieu of shares issued for stock-based compensation
|
(24,781
|
)
|
|
(27,913
|
)
|
||
|
Proceeds from long-term borrowings and revolving credit facility, net of costs
|
2,151,205
|
|
|
2,532,137
|
|
||
|
Payment of premiums on redemption of debt
|
—
|
|
|
(116,410
|
)
|
||
|
Repayment of long-term borrowings and revolving credit facility
|
(993,772
|
)
|
|
(1,085,737
|
)
|
||
|
Repayment of related party long-term borrowings
|
—
|
|
|
(150,000
|
)
|
||
|
Common stock repurchased and retired
|
(1,990,449
|
)
|
|
(1,602,360
|
)
|
||
|
Net cash used in financing activities
|
(857,466
|
)
|
|
(428,464
|
)
|
||
|
Net (decrease) increase in cash and cash equivalents
|
(31,220
|
)
|
|
195,839
|
|
||
|
Cash and cash equivalents at beginning of period
|
134,805
|
|
|
520,945
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
103,585
|
|
|
$
|
716,784
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
(in thousands)
|
2014
|
|
2013
|
||||
|
Supplemental Disclosure of Cash and Non-Cash Flow Information
|
|
|
|
||||
|
Cash paid during the period for:
|
|
|
|
||||
|
Interest, net of amounts capitalized
|
$
|
138,388
|
|
|
$
|
109,476
|
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
|
Capital lease obligations incurred to acquire assets
|
$
|
719
|
|
|
$
|
8,870
|
|
|
Conversion of Series B preferred stock to common stock
|
$
|
—
|
|
|
$
|
1,293
|
|
|
Treasury stock not yet settled
|
$
|
15,565
|
|
|
$
|
—
|
|
|
Conversion of 7% Exchangeable Notes to common stock, net of debt issuance and deferred financing costs
|
$
|
6
|
|
|
$
|
45,097
|
|
|
Purchase price accounting adjustments to goodwill
|
$
|
1,698
|
|
|
$
|
—
|
|
|
(1)
|
Business & Basis of Presentation
|
|
(2)
|
Acquisitions
|
|
(3)
|
Summary of Significant Accounting Policies
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Fair Value
|
||||||||||||
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Sirius XM Canada Holdings Inc. ("Sirius XM Canada") - investment (a)
|
$
|
303,500
|
|
|
—
|
|
|
—
|
|
|
$
|
303,500
|
|
|
$
|
432,200
|
|
|
—
|
|
|
—
|
|
|
$
|
432,200
|
|
|
Sirius XM Canada - fair value of host contract of debenture (b)
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
3,641
|
|
|
$
|
3,641
|
|
|
Sirius XM Canada - fair value of embedded derivative of debenture (b)
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
57
|
|
|
$
|
57
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Debt (c)
|
$
|
—
|
|
|
5,270,623
|
|
|
—
|
|
|
$
|
5,270,623
|
|
|
$
|
—
|
|
|
4,066,755
|
|
|
—
|
|
|
$
|
4,066,755
|
|
|
Share Repurchase Agreement (d)
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
15,702
|
|
|
—
|
|
|
$
|
15,702
|
|
|
(a)
|
This amount approximates fair value. The carrying value of our investment in Sirius XM Canada was
$1,292
and
$26,972
as of
September 30, 2014
and
December 31, 2013
, respectively.
|
|
(b)
|
As of
December 31, 2013
, we held an investment in CAD
$4,000
face value of
8%
convertible unsecured subordinated debentures issued by Sirius XM Canada for which the embedded conversion feature was bifurcated from the host contract. Sirius XM Canada redeemed and converted the debentures during the
three months ended
March 31, 2014.
|
|
(c)
|
The fair value for non-publicly traded instruments is based upon estimates from a market maker and brokerage firm. Refer to Note 13 for information related to the carrying value of our debt as of
September 30, 2014
and
December 31, 2013
.
|
|
(d)
|
The final installment under the share repurchase agreement with Liberty Media was settled on April 25, 2014. The fair value of the derivative associated with the share repurchase agreement was determined using observable inputs, including the U.S. spot LIBOR curve and other available market data and was recorded in our unaudited consolidated balance sheets in Related party current liabilities, with changes in fair value recorded to our unaudited statements of comprehensive income.
|
|
(4)
|
Earnings per Share
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
(in thousands, except per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Numerator:
|
|
|
|
|
|
|
|
|
|
||||||
|
Net income
|
$
|
136,170
|
|
|
$
|
62,894
|
|
|
$
|
350,119
|
|
|
$
|
312,018
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
||||||
|
Allocation of undistributed income to Series B Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,190
|
)
|
||||
|
Net income available to common stockholders for basic net income per common share
|
$
|
136,170
|
|
|
$
|
62,894
|
|
|
$
|
350,119
|
|
|
$
|
307,828
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||
|
Allocation of undistributed income to Series B Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
4,190
|
|
||||
|
Effect of interest on assumed conversions of convertible debt
|
5,363
|
|
|
—
|
|
|
16,088
|
|
|
—
|
|
||||
|
Net income available to common stockholders for diluted net income per common share
|
$
|
141,533
|
|
|
$
|
62,894
|
|
|
$
|
366,207
|
|
|
$
|
312,018
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding for basic net income per common share
|
5,626,078
|
|
|
6,184,216
|
|
|
5,860,248
|
|
|
6,265,981
|
|
||||
|
Weighted average impact of assumed Series B Preferred Stock conversion
|
—
|
|
|
—
|
|
|
—
|
|
|
85,286
|
|
||||
|
Weighted average impact of assumed convertible debt
|
272,853
|
|
|
—
|
|
|
272,853
|
|
|
—
|
|
||||
|
Weighted average impact of other dilutive equity instruments
|
75,116
|
|
|
103,137
|
|
|
75,468
|
|
|
94,815
|
|
||||
|
Weighted average shares for diluted net income per common share
|
5,974,047
|
|
|
6,287,353
|
|
|
6,208,569
|
|
|
6,446,082
|
|
||||
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
||||||
|
Basic
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
Diluted
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
(5)
|
Receivables
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
|
Gross accounts receivable
|
$
|
110,290
|
|
|
$
|
113,015
|
|
|
Allowance for doubtful accounts
|
(7,644
|
)
|
|
(9,078
|
)
|
||
|
Total accounts receivable, net
|
$
|
102,646
|
|
|
$
|
103,937
|
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
|
Billed
|
$
|
58,361
|
|
|
$
|
38,532
|
|
|
Unbilled
|
45,786
|
|
|
50,443
|
|
||
|
Total
|
$
|
104,147
|
|
|
$
|
88,975
|
|
|
(6)
|
Inventory, net
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
|
Raw materials
|
$
|
11,978
|
|
|
$
|
12,358
|
|
|
Finished goods
|
23,375
|
|
|
15,723
|
|
||
|
Allowance for obsolescence
|
(11,003
|
)
|
|
(14,218
|
)
|
||
|
Total inventory, net
|
$
|
24,350
|
|
|
$
|
13,863
|
|
|
(7)
|
Goodwill
|
|
(8)
|
Intangible Assets
|
|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
|
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
|
|
|
(297,483
|
)
|
|
82,517
|
|
|
380,000
|
|
|
(271,372
|
)
|
|
108,628
|
|
||||||
|
Licensing agreements
|
9.1 years
|
|
45,289
|
|
|
(22,369
|
)
|
|
22,920
|
|
|
45,289
|
|
|
(19,604
|
)
|
|
25,685
|
|
||||||
|
Proprietary software
|
6 years
|
|
16,552
|
|
|
(13,825
|
)
|
|
2,727
|
|
|
16,552
|
|
|
(13,384
|
)
|
|
3,168
|
|
||||||
|
Developed technology
|
10 years
|
|
2,000
|
|
|
(1,233
|
)
|
|
767
|
|
|
2,000
|
|
|
(1,083
|
)
|
|
917
|
|
||||||
|
Leasehold interests
|
7.4 years
|
|
132
|
|
|
(110
|
)
|
|
22
|
|
|
132
|
|
|
(96
|
)
|
|
36
|
|
||||||
|
Due to the acquisition of connected vehicle business of Agero:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Definite life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
OEM relationships
|
15 years
|
|
220,000
|
|
|
(13,444
|
)
|
|
206,556
|
|
|
220,000
|
|
|
(2,444
|
)
|
|
217,556
|
|
||||||
|
Proprietary software
|
10 years
|
|
10,663
|
|
|
(1,350
|
)
|
|
9,313
|
|
|
10,663
|
|
|
(245
|
)
|
|
10,418
|
|
||||||
|
Total intangible assets
|
|
|
$
|
3,008,290
|
|
|
$
|
(349,814
|
)
|
|
$
|
2,658,476
|
|
|
$
|
3,008,290
|
|
|
$
|
(308,228
|
)
|
|
$
|
2,700,062
|
|
|
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
(2)
|
|
|
|
XM-2
(2)
|
|
|
|
XM-3
|
|
2021
|
|
XM-4
|
|
2022
|
|
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.
|
|
(2)
|
The FCC license for this satellite has expired. The FCC has granted us special temporary authority to operate this satellite and prepare it for deorbiting maneuvers.
|
|
Year ending December 31,
|
|
Amount
|
||
|
2014 (remaining)
|
|
$
|
13,430
|
|
|
2015
|
|
51,700
|
|
|
|
2016
|
|
48,545
|
|
|
|
2017
|
|
34,882
|
|
|
|
2018
|
|
19,463
|
|
|
|
Thereafter
|
|
156,802
|
|
|
|
Total definite life intangible assets, net
|
|
$
|
324,822
|
|
|
(9)
|
Interest Costs
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Interest costs charged to expense
|
$
|
75,416
|
|
|
$
|
54,629
|
|
|
$
|
197,029
|
|
|
$
|
150,531
|
|
|
Interest costs capitalized
|
70
|
|
|
7,915
|
|
|
480
|
|
|
23,923
|
|
||||
|
Total interest costs incurred
|
$
|
75,486
|
|
|
$
|
62,544
|
|
|
$
|
197,509
|
|
|
$
|
174,454
|
|
|
(10)
|
Property and Equipment
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
|
Satellite system
|
$
|
2,397,611
|
|
|
$
|
2,407,423
|
|
|
Terrestrial repeater network
|
107,796
|
|
|
109,367
|
|
||
|
Leasehold improvements
|
48,514
|
|
|
46,173
|
|
||
|
Broadcast studio equipment
|
60,045
|
|
|
59,020
|
|
||
|
Capitalized software and hardware
|
321,312
|
|
|
298,267
|
|
||
|
Satellite telemetry, tracking and control facilities
|
66,206
|
|
|
63,944
|
|
||
|
Furniture, fixtures, equipment and other
|
77,188
|
|
|
67,275
|
|
||
|
Land
|
38,411
|
|
|
38,411
|
|
||
|
Building
|
59,091
|
|
|
58,662
|
|
||
|
Construction in progress
|
147,650
|
|
|
103,148
|
|
||
|
Total property and equipment
|
3,323,824
|
|
|
3,251,690
|
|
||
|
Accumulated depreciation and amortization
|
(1,801,189
|
)
|
|
(1,657,116
|
)
|
||
|
Property and equipment, net
|
$
|
1,522,635
|
|
|
$
|
1,594,574
|
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
|
Satellite system
|
$
|
12,912
|
|
|
$
|
11,879
|
|
|
Terrestrial repeater network
|
46,554
|
|
|
30,078
|
|
||
|
Capitalized software
|
73,050
|
|
|
39,924
|
|
||
|
Other
|
15,134
|
|
|
21,267
|
|
||
|
Construction in progress
|
$
|
147,650
|
|
|
$
|
103,148
|
|
|
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-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 current debt
|
|
Related party long-term liabilities
|
||||||||||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
Liberty Media
|
$
|
53
|
|
|
$
|
278
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
257
|
|
|
$
|
15,766
|
|
|
$
|
10,992
|
|
|
$
|
10,959
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Sirius XM Canada
|
3,953
|
|
|
8,867
|
|
|
1,679
|
|
|
27,619
|
|
|
3,011
|
|
|
4,554
|
|
|
—
|
|
|
—
|
|
|
14,345
|
|
|
16,337
|
|
||||||||||
|
M-Way
|
—
|
|
|
—
|
|
|
—
|
|
|
2,545
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
|
Total
|
$
|
4,006
|
|
|
$
|
9,145
|
|
|
$
|
1,679
|
|
|
$
|
30,164
|
|
|
$
|
3,268
|
|
|
$
|
20,320
|
|
|
$
|
10,992
|
|
|
$
|
10,959
|
|
|
$
|
14,345
|
|
|
$
|
16,337
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Sirius XM Canada:
|
|
|
|
|
|
|
|
||||||||
|
Revenue (a)
|
$
|
11,963
|
|
|
$
|
10,669
|
|
|
$
|
36,303
|
|
|
$
|
33,980
|
|
|
Share of net earnings (b)
|
$
|
6,302
|
|
|
$
|
1,449
|
|
|
$
|
9,610
|
|
|
$
|
2,831
|
|
|
Liberty Media:
|
|
|
|
|
|
|
|
||||||||
|
Expenses (c)
|
$
|
(281
|
)
|
|
$
|
(3,619
|
)
|
|
$
|
(837
|
)
|
|
$
|
(12,978
|
)
|
|
(a)
|
Under our agreements with Sirius XM Canada, we receive a percentage-based royalty for certain types of subscription revenue earned by Sirius XM Canada for the distribution of Sirius and XM channels, royalties for activation fees and reimbursements for other charges. We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income.
|
|
(b)
|
Our share of Sirius XM Canada's net earnings is recorded to
Interest and investment income
in our unaudited consolidated statements of comprehensive income on a one month lag. During the
nine months ended
September 30, 2014
, our share of Sirius XM Canada’s net earnings included a gain of
$1,251
related to the fair value received in excess of the carrying value associated with the redemption of our investment in Sirius XM Canada’s
8%
convertible unsecured subordinated debentures in February 2014. Sirius XM Canada declared dividends to us of
$4,591
and
$4,727
during the
three months ended
September 30, 2014
and
2013
, respectively, and
$39,046
and
$12,209
during the
nine months ended
September 30, 2014
and
2013
, respectively. These dividends were recorded as a reduction to our investment balance in Sirius XM Canada through the second quarter of 2014 and as
Interest and investment income
beginning in the third quarter of 2014. This amount includes amortization related to the equity method intangible assets of
$0
and
$364
for the
three months ended
September 30, 2014
and
2013
, respectively, and
$363
and
$1,091
for the
nine months ended
September 30, 2014
and
2013
, respectively.
|
|
(c)
|
We recognize Interest expense associated with the portion of the 7% Exchangeable Senior Subordinated Notes due 2014 held by Liberty Media.
|
|
(12)
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value at
|
||||||||
|
Issuer / Borrower
|
|
Issued
|
|
Debt
|
|
Maturity Date
|
|
Interest Payable
|
|
Principal Amount
|
|
September 30, 2014
|
|
December 31, 2013
|
||||||
|
Sirius XM
(a)(b)
|
|
August 2008
|
|
7% Exchangeable
Senior Subordinated Notes (the "Exchangeable Notes") |
|
December 1, 2014
|
|
semi-annually on June 1 and December 1
|
|
$
|
502,364
|
|
|
$
|
502,007
|
|
|
$
|
500,481
|
|
|
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
|
|
|
495,346
|
|
|
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
|
|
|
643,566
|
|
|
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
|
|
|
594,940
|
|
|
594,499
|
|
|||
|
Sirius XM
(a)(c) |
|
May 2013
|
|
4.625% Senior Notes
(the "4.625% Notes")
|
|
May 15, 2023
|
|
semi-annually on May 15 and November 15
|
|
500,000
|
|
|
494,998
|
|
|
494,653
|
|
|||
|
Sirius XM
(a)(c)(d) |
|
May 2014
|
|
6.00% Senior Notes
(the "6.00% Notes")
|
|
July 15, 2024
|
|
semi-annually on January 15 and July 15
|
|
1,500,000
|
|
|
1,483,611
|
|
|
—
|
|
|||
|
Sirius XM
(a)(c)(e) |
|
August 2012
|
|
5.25% Senior Secured Notes (the "5.25% Notes")
|
|
August 15, 2022
|
|
semi-annually on February 15 and August 15
|
|
400,000
|
|
|
395,020
|
|
|
394,648
|
|
|||
|
Sirius XM
(f) |
|
December 2012
|
|
Senior Secured Revolving Credit Facility (the "Credit Facility")
|
|
December 5, 2017
|
|
variable fee paid quarterly
|
|
1,250,000
|
|
|
145,000
|
|
|
460,000
|
|
|||
|
Sirius XM
|
|
Various
|
|
Capital leases
|
|
Various
|
|
n/a
|
|
n/a
|
|
|
14,583
|
|
|
19,591
|
|
|||
|
Total Debt
|
|
4,769,071
|
|
|
3,601,595
|
|
||||||||||||||
|
Less: total current maturities non-related party
|
|
498,433
|
|
|
496,815
|
|
||||||||||||||
|
Less: total current maturities related party
|
|
10,992
|
|
|
10,959
|
|
||||||||||||||
|
Total long-term debt
|
|
$
|
4,259,646
|
|
|
$
|
3,093,821
|
|
||||||||||||
|
(a)
|
The carrying value of the notes are net of the remaining unamortized original issue discount.
|
|
(b)
|
Sirius XM and Holdings are co-obligors with respect to the Exchangeable Notes. 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. During the
three months ended
September 30, 2014
,
$6
of the Exchangeable Notes were converted into shares of our common stock. During the
three and nine months ended
September 30, 2014
, the common stock reserved for conversion in connection with the Exchangeable Notes was considered to be dilutive in our calculation of diluted net income per share and anti-dilutive during the
three and nine months ended
September 30, 2013
.
|
|
(c)
|
Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes.
|
|
(d)
|
In May 2014, Sirius XM issued
$1,500,000
aggregate principal amount of
6.00%
Senior Notes due
2024
, with an original issuance discount of
$16,875
.
|
|
(e)
|
In April 2014, we entered into a supplemental indenture to the indenture governing the 5.25% Notes pursuant to which we granted a first priority lien on substantially all of the assets of Sirius XM and the guarantors to the holders of the 5.25% Notes. The liens securing the 5.25% Notes are equal and ratable to the liens granted to secure the Credit Facility.
|
|
(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
|
|
(14)
|
Stockholders’ Equity
|
|
Share Repurchase Type
|
Shares
|
|
Amount
|
|||
|
Open Market and Privately Negotiated Repurchases (a)
|
273,435,722
|
|
|
$
|
909,609
|
|
|
Liberty Media (b)
|
92,888,561
|
|
|
340,000
|
|
|
|
May 2014 ASR Agreement (c)
|
151,846,125
|
|
|
506,404
|
|
|
|
August 2014 ASR Agreement (d)
|
51,884,795
|
|
|
250,000
|
|
|
|
Total Repurchases
|
570,055,203
|
|
|
$
|
2,006,013
|
|
|
(a)
|
As of
September 30, 2014
,
$15,565
of common stock repurchases had not settled, nor been retired, and were recorded as Treasury stock within our unaudited consolidated balance sheets and unaudited consolidated statements of stockholders' equity.
|
|
(b)
|
On
October 9, 2013
, we entered into an agreement to repurchase
$500,000
of our common stock from Liberty Media. Pursuant to this agreement, we repurchased
$160,000
of our common stock from Liberty Media in
2013
. On April 25, 2014, we completed the final purchase installment and repurchased
92,888,561
shares of our common stock for
$340,000
from Liberty Media at a price of
$3.66
per share. As there were certain terms in the forward purchase contract with Liberty Media that could have caused the obligation not to be fulfilled, the instrument was classified as a liability and was marked to fair value with any gain or loss recorded to our unaudited consolidated statements of comprehensive income. We recognized
$34,485
to
Loss on change in value of derivatives
in our unaudited consolidated statements of comprehensive income during the
nine months ended
September 30, 2014
.
|
|
(c)
|
In May 2014, we entered into an accelerated share repurchase agreement (the "May ASR Agreement") and prepaid
$600,000
to a third-party financial institution to repurchase our common stock. Under the May ASR Agreement, we received
151,846,125
shares of our common stock that were retired upon receipt. Upon settlement of the May ASR Agreement in August 2014, we received
$93,596
for the unused portion of the original prepayment.
|
|
(d)
|
In August 2014, we entered into a second accelerated share repurchase agreement (the "August ASR Agreement") with a third-party financial institution to repurchase up to
$250,000
of our common stock. Under the August ASR Agreement, we prepaid
$250,000
to the financial institution, of which
$68,118
related to repurchases that settled on October 1, 2014. During the
three months ended
September 30, 2014
, we received
51,884,795
shares of our common stock that were retired upon receipt. Upon settlement of the August ASR Agreement on October 1, 2014, we received an additional
19,431,708
shares of our common stock that were retired upon receipt. The aggregate purchase price we paid and the total aggregate number of shares repurchased under the August ASR Agreement were determined based on the VWAP of our common stock minus a discount.
|
|
(15)
|
Benefit Plans
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Risk-free interest rate
|
1.7%
|
|
1.5%
|
|
1.6%
|
|
1.4%
|
|
Expected life of options — years
|
4.78
|
|
4.73
|
|
4.72
|
|
4.72
|
|
Expected stock price volatility
|
33%
|
|
47%
|
|
33%
|
|
48%
|
|
Expected dividend yield
|
0%
|
|
0%
|
|
0%
|
|
0%
|
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-Average
Remaining
Contractual Term
(Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
|
Outstanding as of December 31, 2013
|
264,239
|
|
|
$
|
2.42
|
|
|
|
|
|
||
|
Granted
|
59,534
|
|
|
$
|
3.39
|
|
|
|
|
|
||
|
Exercised
|
(33,878
|
)
|
|
$
|
1.67
|
|
|
|
|
|
||
|
Forfeited, cancelled or expired
|
(8,297
|
)
|
|
$
|
4.22
|
|
|
|
|
|
||
|
Outstanding as of September 30, 2014
|
281,598
|
|
|
$
|
2.67
|
|
|
7.24
|
|
$
|
269,957
|
|
|
Exercisable as of September 30, 2014
|
134,344
|
|
|
$
|
2.21
|
|
|
5.52
|
|
$
|
204,055
|
|
|
|
Shares
|
|
Grant Date Fair Value
|
|||
|
Nonvested as of December 31, 2013
|
6,984
|
|
|
$
|
3.58
|
|
|
Granted
|
5,883
|
|
|
$
|
3.39
|
|
|
Vested restricted stock units
|
(1,105
|
)
|
|
$
|
3.61
|
|
|
Forfeited
|
(224
|
)
|
|
$
|
3.56
|
|
|
Nonvested as of September 30, 2014
|
11,538
|
|
|
$
|
3.48
|
|
|
(16)
|
Commitments and Contingencies
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
Debt obligations
|
$
|
504,195
|
|
|
$
|
7,482
|
|
|
$
|
4,265
|
|
|
$
|
145,928
|
|
|
$
|
77
|
|
|
$
|
4,150,000
|
|
|
$
|
4,811,947
|
|
|
Cash interest payments
|
60,818
|
|
|
235,826
|
|
|
235,619
|
|
|
236,213
|
|
|
228,063
|
|
|
939,813
|
|
|
1,936,352
|
|
|||||||
|
Satellite and transmission
|
6,433
|
|
|
22,598
|
|
|
4,524
|
|
|
3,558
|
|
|
4,171
|
|
|
16,863
|
|
|
58,147
|
|
|||||||
|
Programming and content
|
46,758
|
|
|
231,759
|
|
|
106,304
|
|
|
74,629
|
|
|
60,150
|
|
|
108,333
|
|
|
627,933
|
|
|||||||
|
Marketing and distribution
|
10,414
|
|
|
19,750
|
|
|
11,441
|
|
|
7,860
|
|
|
6,978
|
|
|
5,810
|
|
|
62,253
|
|
|||||||
|
Satellite incentive payments
|
2,752
|
|
|
11,511
|
|
|
12,367
|
|
|
13,296
|
|
|
14,302
|
|
|
54,178
|
|
|
108,406
|
|
|||||||
|
Operating lease obligations
|
9,528
|
|
|
47,272
|
|
|
40,632
|
|
|
34,199
|
|
|
32,061
|
|
|
227,108
|
|
|
390,800
|
|
|||||||
|
Other
|
28,038
|
|
|
26,825
|
|
|
9,954
|
|
|
1,602
|
|
|
885
|
|
|
140
|
|
|
67,444
|
|
|||||||
|
Total
(1)
|
$
|
668,936
|
|
|
$
|
603,023
|
|
|
$
|
425,106
|
|
|
$
|
517,285
|
|
|
$
|
346,687
|
|
|
$
|
5,502,245
|
|
|
$
|
8,063,282
|
|
|
(1)
|
The table does not include our reserve for uncertain tax positions, which at
September 30, 2014
totaled
$1,432
, as the specific timing of any cash payments cannot be projected with reasonable certainty.
|
|
(17)
|
Income Taxes
|
|
(18)
|
Subsequent Events
|
|
•
|
we face substantial competition and that competition is likely to increase over time;
|
|
•
|
our ability to attract and retain subscribers in the future is uncertain;
|
|
•
|
our business depends in large part upon the auto industry;
|
|
•
|
general economic conditions can affect our business;
|
|
•
|
failure of our satellites would significantly damage our business;
|
|
•
|
interruption or failure of our information technology and communications systems could negatively impact our results and our brand;
|
|
•
|
if we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions and private litigation and our reputation could suffer;
|
|
•
|
royalties for music rights have increased and there can be no assurance they will not continue to increase in the future;
|
|
•
|
the unfavorable outcome of pending or future litigation could have a material adverse effect;
|
|
•
|
we may not realize the benefits of acquisitions or other strategic initiatives, including the acquisition of Agero’s connected vehicle business;
|
|
•
|
rapid technological and industry changes could adversely impact our services;
|
|
•
|
failure of third parties to perform could adversely affect our business;
|
|
•
|
changes in consumer protection laws and their enforcement could damage our business;
|
|
•
|
failure to comply with FCC requirements could damage our business;
|
|
•
|
other existing or future government laws and regulations could harm our business;
|
|
•
|
we may from time to time modify our business plan, and these changes could adversely affect us and our financial condition;
|
|
•
|
our indebtedness could adversely affect our operations and could limit our ability to react to changes in the economy or our industry;
|
|
•
|
our broadcast studios, terrestrial repeater networks, satellite uplink facilities or other ground facilities could be damaged by natural catastrophes or terrorist activities;
|
|
•
|
our principal stockholder has significant influence over our management and over actions requiring general stockholder approval and its interests may differ from the interests of other holders of our common stock;
|
|
•
|
we are a “controlled company” within the meaning of the NASDAQ listing rules and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements; and
|
|
•
|
our business may be impaired by third-party intellectual property rights.
|
|
|
Unaudited
|
|
2014 vs 2013 Change
|
|
2014 vs 2013 Change
|
||||||||||||||||||||||||
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
|
Three Months
|
|
Nine Months
|
||||||||||||||||||||||
|
(in thousands)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Subscriber revenue
|
$
|
902,514
|
|
|
$
|
834,053
|
|
|
$
|
2,632,110
|
|
|
$
|
2,432,113
|
|
|
$
|
68,461
|
|
|
8
|
%
|
|
$
|
199,997
|
|
|
8
|
%
|
|
Advertising revenue
|
25,300
|
|
|
21,918
|
|
|
73,012
|
|
|
63,886
|
|
|
3,382
|
|
|
15
|
%
|
|
9,126
|
|
|
14
|
%
|
||||||
|
Equipment revenue
|
23,129
|
|
|
17,989
|
|
|
74,723
|
|
|
54,588
|
|
|
5,140
|
|
|
29
|
%
|
|
20,135
|
|
|
37
|
%
|
||||||
|
Other revenue
|
106,144
|
|
|
87,549
|
|
|
310,298
|
|
|
248,430
|
|
|
18,595
|
|
|
21
|
%
|
|
61,868
|
|
|
25
|
%
|
||||||
|
Total revenue
|
1,057,087
|
|
|
961,509
|
|
|
3,090,143
|
|
|
2,799,017
|
|
|
95,578
|
|
|
10
|
%
|
|
291,126
|
|
|
10
|
%
|
||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Cost of services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Revenue share and royalties
|
204,307
|
|
|
162,627
|
|
|
599,939
|
|
|
467,017
|
|
|
41,680
|
|
|
26
|
%
|
|
132,922
|
|
|
28
|
%
|
||||||
|
Programming and content
|
74,920
|
|
|
72,322
|
|
|
219,360
|
|
|
217,313
|
|
|
2,598
|
|
|
4
|
%
|
|
2,047
|
|
|
1
|
%
|
||||||
|
Customer service and billing
|
93,013
|
|
|
76,322
|
|
|
274,174
|
|
|
237,006
|
|
|
16,691
|
|
|
22
|
%
|
|
37,168
|
|
|
16
|
%
|
||||||
|
Satellite and transmission
|
21,794
|
|
|
19,853
|
|
|
64,446
|
|
|
59,041
|
|
|
1,941
|
|
|
10
|
%
|
|
5,405
|
|
|
9
|
%
|
||||||
|
Cost of equipment
|
9,485
|
|
|
5,340
|
|
|
29,319
|
|
|
17,809
|
|
|
4,145
|
|
|
78
|
%
|
|
11,510
|
|
|
65
|
%
|
||||||
|
Subscriber acquisition costs
|
119,778
|
|
|
125,457
|
|
|
367,207
|
|
|
371,560
|
|
|
(5,679
|
)
|
|
(5
|
)%
|
|
(4,353
|
)
|
|
(1
|
)%
|
||||||
|
Sales and marketing
|
83,906
|
|
|
75,638
|
|
|
237,992
|
|
|
209,594
|
|
|
8,268
|
|
|
11
|
%
|
|
28,398
|
|
|
14
|
%
|
||||||
|
Engineering, design and development
|
16,136
|
|
|
13,007
|
|
|
47,677
|
|
|
42,901
|
|
|
3,129
|
|
|
24
|
%
|
|
4,776
|
|
|
11
|
%
|
||||||
|
General and administrative
|
75,170
|
|
|
67,881
|
|
|
223,995
|
|
|
184,613
|
|
|
7,289
|
|
|
11
|
%
|
|
39,382
|
|
|
21
|
%
|
||||||
|
Depreciation and amortization
|
64,550
|
|
|
58,533
|
|
|
200,021
|
|
|
192,966
|
|
|
6,017
|
|
|
10
|
%
|
|
7,055
|
|
|
4
|
%
|
||||||
|
Total operating expenses
|
763,059
|
|
|
676,980
|
|
|
2,264,130
|
|
|
1,999,820
|
|
|
86,079
|
|
|
13
|
%
|
|
264,310
|
|
|
13
|
%
|
||||||
|
Income from operations
|
294,028
|
|
|
284,529
|
|
|
826,013
|
|
|
799,197
|
|
|
9,499
|
|
|
3
|
%
|
|
26,816
|
|
|
3
|
%
|
||||||
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Interest expense, net of amounts capitalized
|
(75,416
|
)
|
|
(54,629
|
)
|
|
(197,029
|
)
|
|
(150,531
|
)
|
|
(20,787
|
)
|
|
(38
|
)%
|
|
(46,498
|
)
|
|
(31
|
)%
|
||||||
|
Loss on extinguishment of debt and credit facilities, net
|
—
|
|
|
(107,971
|
)
|
|
—
|
|
|
(124,348
|
)
|
|
107,971
|
|
|
100
|
%
|
|
124,348
|
|
|
100
|
%
|
||||||
|
Interest and investment income
|
6,305
|
|
|
1,716
|
|
|
9,588
|
|
|
3,648
|
|
|
4,589
|
|
|
267
|
%
|
|
5,940
|
|
|
163
|
%
|
||||||
|
Loss on change in value of derivatives
|
—
|
|
|
—
|
|
|
(34,485
|
)
|
|
—
|
|
|
—
|
|
|
0
|
%
|
|
(34,485
|
)
|
|
(100
|
)%
|
||||||
|
Other income (loss)
|
297
|
|
|
407
|
|
|
(1,354
|
)
|
|
909
|
|
|
(110
|
)
|
|
(27
|
)%
|
|
(2,263
|
)
|
|
(249
|
)%
|
||||||
|
Total other expense
|
(68,814
|
)
|
|
(160,477
|
)
|
|
(223,280
|
)
|
|
(270,322
|
)
|
|
91,663
|
|
|
57
|
%
|
|
47,042
|
|
|
17
|
%
|
||||||
|
Income before income taxes
|
225,214
|
|
|
124,052
|
|
|
602,733
|
|
|
528,875
|
|
|
101,162
|
|
|
82
|
%
|
|
73,858
|
|
|
14
|
%
|
||||||
|
Income tax expense
|
(89,044
|
)
|
|
(61,158
|
)
|
|
(252,614
|
)
|
|
(216,857
|
)
|
|
(27,886
|
)
|
|
(46
|
)%
|
|
(35,757
|
)
|
|
(16
|
)%
|
||||||
|
Net income
|
$
|
136,170
|
|
|
$
|
62,894
|
|
|
$
|
350,119
|
|
|
$
|
312,018
|
|
|
$
|
73,276
|
|
|
117
|
%
|
|
$
|
38,101
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
Unaudited
|
|
Unaudited
|
||||||||||||
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
(in thousands, except for subscriber, per subscriber and per installation amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Self-pay subscribers
|
|
22,014,606
|
|
|
20,670,333
|
|
|
22,014,606
|
|
|
20,670,333
|
|
||||
|
Paid promotional subscribers
|
|
4,719,792
|
|
|
4,911,733
|
|
|
4,719,792
|
|
|
4,911,733
|
|
||||
|
Ending subscribers
|
|
26,734,398
|
|
|
25,582,066
|
|
|
26,734,398
|
|
|
25,582,066
|
|
||||
|
Self-pay subscribers
|
|
379,598
|
|
|
372,597
|
|
|
932,789
|
|
|
1,100,059
|
|
||||
|
Paid promotional subscribers
|
|
53,219
|
|
|
140,481
|
|
|
242,299
|
|
|
581,671
|
|
||||
|
Net additions
|
|
432,817
|
|
|
513,078
|
|
|
1,175,088
|
|
|
1,681,730
|
|
||||
|
Daily weighted average number of subscribers
|
|
26,487,969
|
|
|
25,267,241
|
|
|
26,035,178
|
|
|
24,646,938
|
|
||||
|
Average self-pay monthly churn
|
|
1.9
|
%
|
|
1.8
|
%
|
|
1.9
|
%
|
|
1.8
|
%
|
||||
|
New vehicle consumer conversion rate
|
|
41
|
%
|
|
44
|
%
|
|
42
|
%
|
|
44
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
ARPU
|
|
$
|
12.47
|
|
|
$
|
12.29
|
|
|
$
|
12.34
|
|
|
$
|
12.21
|
|
|
SAC, per installation
|
|
$
|
35
|
|
|
$
|
45
|
|
|
$
|
34
|
|
|
$
|
46
|
|
|
Customer service and billing expenses, per average subscriber
|
|
$
|
1.07
|
|
|
$
|
1.00
|
|
|
$
|
1.07
|
|
|
$
|
1.06
|
|
|
Free cash flow
|
|
$
|
267,269
|
|
|
$
|
245,262
|
|
|
$
|
825,102
|
|
|
$
|
624,303
|
|
|
Adjusted EBITDA
|
|
$
|
381,251
|
|
|
$
|
295,742
|
|
|
$
|
1,086,469
|
|
|
$
|
840,589
|
|
|
Note: See pages 37 through 44 for glossary.
|
|
|
|
|
|
|
|
|
||||||||
|
|
For the Nine Months Ended September 30,
|
|
|
||||||||
|
(in thousands)
|
2014
|
|
2013
|
|
2014 vs. 2013
|
||||||
|
Net cash provided by operating activities
|
$
|
888,168
|
|
|
$
|
744,257
|
|
|
$
|
143,911
|
|
|
Net cash used in investing activities
|
(61,922
|
)
|
|
(119,954
|
)
|
|
58,032
|
|
|||
|
Net cash used in financing activities
|
(857,466
|
)
|
|
(428,464
|
)
|
|
(429,002
|
)
|
|||
|
Net (decrease) increase in cash and cash equivalents
|
(31,220
|
)
|
|
195,839
|
|
|
(227,059
|
)
|
|||
|
Cash and cash equivalents at beginning of period
|
134,805
|
|
|
520,945
|
|
|
(386,140
|
)
|
|||
|
Cash and cash equivalents at end of period
|
$
|
103,585
|
|
|
$
|
716,784
|
|
|
$
|
(613,199
|
)
|
|
|
Unaudited
|
||||||||||||||
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Net income (GAAP):
|
$
|
136,170
|
|
|
$
|
62,894
|
|
|
$
|
350,119
|
|
|
$
|
312,018
|
|
|
Add back items excluded from Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
|
Purchase price accounting adjustments:
|
|
|
|
|
|
|
|
||||||||
|
Revenues (see pages 39-42)
|
1,813
|
|
|
1,813
|
|
|
5,438
|
|
|
5,438
|
|
||||
|
Operating expenses (see pages 39-42)
|
(945
|
)
|
|
(68,895
|
)
|
|
(2,835
|
)
|
|
(206,786
|
)
|
||||
|
Share-based payment expense (GAAP)
|
21,805
|
|
|
19,762
|
|
|
57,832
|
|
|
49,774
|
|
||||
|
Depreciation and amortization (GAAP)
|
64,550
|
|
|
58,533
|
|
|
200,021
|
|
|
192,966
|
|
||||
|
Interest expense, net of amounts capitalized (GAAP)
|
75,416
|
|
|
54,629
|
|
|
197,029
|
|
|
150,531
|
|
||||
|
Loss on extinguishment of debt and credit facilities, net (GAAP)
|
—
|
|
|
107,971
|
|
|
—
|
|
|
124,348
|
|
||||
|
Interest and investment income (GAAP)
|
(6,305
|
)
|
|
(1,716
|
)
|
|
(9,588
|
)
|
|
(3,648
|
)
|
||||
|
Loss on change in value of derivatives (GAAP)
|
—
|
|
|
—
|
|
|
34,485
|
|
|
—
|
|
||||
|
Other (income) loss (GAAP)
|
(297
|
)
|
|
(407
|
)
|
|
1,354
|
|
|
(909
|
)
|
||||
|
Income tax expense (GAAP)
|
89,044
|
|
|
61,158
|
|
|
252,614
|
|
|
216,857
|
|
||||
|
Adjusted EBITDA
|
$
|
381,251
|
|
|
$
|
295,742
|
|
|
$
|
1,086,469
|
|
|
$
|
840,589
|
|
|
|
Unaudited For the Three Months Ended September 30, 2014
|
||||||||||||||
|
(in thousands)
|
As Reported
|
|
Purchase Price Accounting Adjustments
|
|
Allocation of Share-based Payment Expense
|
|
Adjusted
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Subscriber revenue
|
$
|
902,514
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
902,514
|
|
|
Advertising revenue
|
25,300
|
|
|
—
|
|
|
—
|
|
|
25,300
|
|
||||
|
Equipment revenue
|
23,129
|
|
|
—
|
|
|
—
|
|
|
23,129
|
|
||||
|
Other revenue
|
106,144
|
|
|
1,813
|
|
|
—
|
|
|
107,957
|
|
||||
|
Total revenue
|
$
|
1,057,087
|
|
|
$
|
1,813
|
|
|
$
|
—
|
|
|
$
|
1,058,900
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
|
Cost of services:
|
|
|
|
|
|
|
|
||||||||
|
Revenue share and royalties
|
$
|
204,307
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
204,307
|
|
|
Programming and content
|
74,920
|
|
|
945
|
|
|
(2,434
|
)
|
|
73,431
|
|
||||
|
Customer service and billing
|
93,013
|
|
|
—
|
|
|
(868
|
)
|
|
92,145
|
|
||||
|
Satellite and transmission
|
21,794
|
|
|
—
|
|
|
(1,185
|
)
|
|
20,609
|
|
||||
|
Cost of equipment
|
9,485
|
|
|
—
|
|
|
—
|
|
|
9,485
|
|
||||
|
Subscriber acquisition costs
|
119,778
|
|
|
—
|
|
|
—
|
|
|
119,778
|
|
||||
|
Sales and marketing
|
83,906
|
|
|
—
|
|
|
(4,265
|
)
|
|
79,641
|
|
||||
|
Engineering, design and development
|
16,136
|
|
|
—
|
|
|
(2,559
|
)
|
|
13,577
|
|
||||
|
General and administrative
|
75,170
|
|
|
—
|
|
|
(10,494
|
)
|
|
64,676
|
|
||||
|
Depreciation and amortization (a)
|
64,550
|
|
|
—
|
|
|
—
|
|
|
64,550
|
|
||||
|
Share-based payment expense
|
—
|
|
|
—
|
|
|
21,805
|
|
|
21,805
|
|
||||
|
Total operating expenses
|
$
|
763,059
|
|
|
$
|
945
|
|
|
$
|
—
|
|
|
$
|
764,004
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(a) Purchase price accounting adjustments included above exclude the incremental depreciation and amortization associated with the $785,000 stepped up basis in property, equipment and intangible assets as a result of the Merger. The increased depreciation and amortization for the three months ended September 30, 2014 was $9,000.
|
|||||||||||||||
|
|
Unaudited For the Three Months Ended September 30, 2013
|
||||||||||||||
|
(in thousands)
|
As Reported
|
|
Purchase Price Accounting Adjustments
|
|
Allocation of Share-based Payment Expense
|
|
Adjusted
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Subscriber revenue
|
$
|
834,053
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
834,053
|
|
|
Advertising revenue
|
21,918
|
|
|
—
|
|
|
—
|
|
|
21,918
|
|
||||
|
Equipment revenue
|
17,989
|
|
|
—
|
|
|
—
|
|
|
17,989
|
|
||||
|
Other revenue
|
87,549
|
|
|
1,813
|
|
|
—
|
|
|
89,362
|
|
||||
|
Total revenue
|
$
|
961,509
|
|
|
$
|
1,813
|
|
|
$
|
—
|
|
|
$
|
963,322
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
|
Cost of services:
|
|
|
|
|
|
|
|
||||||||
|
Revenue share and royalties
|
$
|
162,627
|
|
|
$
|
41,942
|
|
|
$
|
—
|
|
|
$
|
204,569
|
|
|
Programming and content
|
72,322
|
|
|
2,008
|
|
|
(2,232
|
)
|
|
72,098
|
|
||||
|
Customer service and billing
|
76,322
|
|
|
—
|
|
|
(647
|
)
|
|
75,675
|
|
||||
|
Satellite and transmission
|
19,853
|
|
|
—
|
|
|
(1,076
|
)
|
|
18,777
|
|
||||
|
Cost of equipment
|
5,340
|
|
|
—
|
|
|
—
|
|
|
5,340
|
|
||||
|
Subscriber acquisition costs
|
125,457
|
|
|
20,342
|
|
|
—
|
|
|
145,799
|
|
||||
|
Sales and marketing
|
75,638
|
|
|
4,603
|
|
|
(3,871
|
)
|
|
76,370
|
|
||||
|
Engineering, design and development
|
13,007
|
|
|
—
|
|
|
(2,177
|
)
|
|
10,830
|
|
||||
|
General and administrative
|
67,881
|
|
|
—
|
|
|
(9,759
|
)
|
|
58,122
|
|
||||
|
Depreciation and amortization (a)
|
58,533
|
|
|
—
|
|
|
—
|
|
|
58,533
|
|
||||
|
Share-based payment expense
|
—
|
|
|
—
|
|
|
19,762
|
|
|
19,762
|
|
||||
|
Total operating expenses
|
$
|
676,980
|
|
|
$
|
68,895
|
|
|
$
|
—
|
|
|
$
|
745,875
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(a) Purchase price accounting adjustments included above exclude the incremental depreciation and amortization associated with the $785,000 stepped up basis in property, equipment and intangible assets as a result of the Merger. The increased depreciation and amortization for the three months ended September 30, 2013 was $12,000.
|
|||||||||||||||
|
|
Unaudited For the Nine Months Ended September 30, 2014
|
||||||||||||||
|
(in thousands)
|
As Reported
|
|
Purchase Price Accounting Adjustments
|
|
Allocation of Share-based Payment Expense
|
|
Adjusted
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Subscriber revenue
|
$
|
2,632,110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,632,110
|
|
|
Advertising revenue
|
73,012
|
|
|
—
|
|
|
—
|
|
|
73,012
|
|
||||
|
Equipment revenue
|
74,723
|
|
|
—
|
|
|
—
|
|
|
74,723
|
|
||||
|
Other revenue
|
310,298
|
|
|
5,438
|
|
|
—
|
|
|
315,736
|
|
||||
|
Total revenue
|
$
|
3,090,143
|
|
|
$
|
5,438
|
|
|
$
|
—
|
|
|
$
|
3,095,581
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
|
Cost of services:
|
|
|
|
|
|
|
|
||||||||
|
Revenue share and royalties
|
$
|
599,939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
599,939
|
|
|
Programming and content
|
219,360
|
|
|
2,835
|
|
|
(6,903
|
)
|
|
215,292
|
|
||||
|
Customer service and billing
|
274,174
|
|
|
—
|
|
|
(2,032
|
)
|
|
272,142
|
|
||||
|
Satellite and transmission
|
64,446
|
|
|
—
|
|
|
(3,087
|
)
|
|
61,359
|
|
||||
|
Cost of equipment
|
29,319
|
|
|
—
|
|
|
—
|
|
|
29,319
|
|
||||
|
Subscriber acquisition costs
|
367,207
|
|
|
—
|
|
|
—
|
|
|
367,207
|
|
||||
|
Sales and marketing
|
237,992
|
|
|
—
|
|
|
(11,238
|
)
|
|
226,754
|
|
||||
|
Engineering, design and development
|
47,677
|
|
|
—
|
|
|
(6,422
|
)
|
|
41,255
|
|
||||
|
General and administrative
|
223,995
|
|
|
—
|
|
|
(28,150
|
)
|
|
195,845
|
|
||||
|
Depreciation and amortization (a)
|
200,021
|
|
|
—
|
|
|
—
|
|
|
200,021
|
|
||||
|
Share-based payment expense
|
—
|
|
|
—
|
|
|
57,832
|
|
|
57,832
|
|
||||
|
Total operating expenses
|
$
|
2,264,130
|
|
|
$
|
2,835
|
|
|
$
|
—
|
|
|
$
|
2,266,965
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(a) Purchase price accounting adjustments included above exclude the incremental depreciation and amortization associated with the $785,000 stepped up basis in property, equipment and intangible assets as a result of the Merger. The increased depreciation and amortization for the nine months ended September 30, 2014 was $29,000.
|
|||||||||||||||
|
|
Unaudited For the Nine Months Ended September 30, 2013
|
||||||||||||||
|
(in thousands)
|
As Reported
|
|
Purchase Price Accounting Adjustments
|
|
Allocation of Share-based Payment Expense
|
|
Adjusted
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Subscriber revenue
|
$
|
2,432,113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,432,113
|
|
|
Advertising revenue
|
63,886
|
|
|
—
|
|
|
—
|
|
|
63,886
|
|
||||
|
Equipment revenue
|
54,588
|
|
|
—
|
|
|
—
|
|
|
54,588
|
|
||||
|
Other revenue
|
248,430
|
|
|
5,438
|
|
|
—
|
|
|
253,868
|
|
||||
|
Total revenue
|
$
|
2,799,017
|
|
|
$
|
5,438
|
|
|
$
|
—
|
|
|
$
|
2,804,455
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||||||
|
Cost of services:
|
|
|
|
|
|
|
|
||||||||
|
Revenue share and royalties
|
$
|
467,017
|
|
|
$
|
122,534
|
|
|
$
|
—
|
|
|
$
|
589,551
|
|
|
Programming and content
|
217,313
|
|
|
6,965
|
|
|
(5,513
|
)
|
|
218,765
|
|
||||
|
Customer service and billing
|
237,006
|
|
|
—
|
|
|
(1,628
|
)
|
|
235,378
|
|
||||
|
Satellite and transmission
|
59,041
|
|
|
—
|
|
|
(2,753
|
)
|
|
56,288
|
|
||||
|
Cost of equipment
|
17,809
|
|
|
—
|
|
|
—
|
|
|
17,809
|
|
||||
|
Subscriber acquisition costs
|
371,560
|
|
|
64,365
|
|
|
—
|
|
|
435,925
|
|
||||
|
Sales and marketing
|
209,594
|
|
|
12,922
|
|
|
(10,114
|
)
|
|
212,402
|
|
||||
|
Engineering, design and development
|
42,901
|
|
|
—
|
|
|
(5,458
|
)
|
|
37,443
|
|
||||
|
General and administrative
|
184,613
|
|
|
—
|
|
|
(24,308
|
)
|
|
160,305
|
|
||||
|
Depreciation and amortization (a)
|
192,966
|
|
|
—
|
|
|
—
|
|
|
192,966
|
|
||||
|
Share-based payment expense
|
—
|
|
|
—
|
|
|
49,774
|
|
|
49,774
|
|
||||
|
Total operating expenses
|
$
|
1,999,820
|
|
|
$
|
206,786
|
|
|
$
|
—
|
|
|
$
|
2,206,606
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
(a) Purchase price accounting adjustments included above exclude the incremental depreciation and amortization associated with the $785,000 stepped up basis in property, equipment and intangible assets as a result of the Merger. The increased depreciation and amortization for nine months ended September 30, 2013 was $37,000.
|
|||||||||||||||
|
|
Unaudited
|
||||||||||||||
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Subscriber revenue, excluding connected vehicle (GAAP)
|
$
|
880,093
|
|
|
$
|
834,053
|
|
|
$
|
2,568,742
|
|
|
$
|
2,432,113
|
|
|
Add: advertising revenue (GAAP)
|
25,300
|
|
|
21,918
|
|
|
73,012
|
|
|
63,886
|
|
||||
|
Add: other subscription-related revenue (GAAP)
|
85,380
|
|
|
75,999
|
|
|
249,138
|
|
|
211,784
|
|
||||
|
|
$
|
990,773
|
|
|
$
|
931,970
|
|
|
$
|
2,890,892
|
|
|
$
|
2,707,783
|
|
|
Daily weighted average number of subscribers
|
26,487,969
|
|
|
25,267,241
|
|
|
26,035,178
|
|
|
24,646,938
|
|
||||
|
ARPU
|
$
|
12.47
|
|
|
$
|
12.29
|
|
|
$
|
12.34
|
|
|
$
|
12.21
|
|
|
|
Unaudited
|
||||||||||||||
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Customer service and billing expenses, excluding connected vehicle (GAAP)
|
$
|
85,868
|
|
|
$
|
76,322
|
|
|
$
|
252,677
|
|
|
$
|
237,006
|
|
|
Less: share-based payment expense (GAAP)
|
(868
|
)
|
|
(647
|
)
|
|
(2,032
|
)
|
|
(1,628
|
)
|
||||
|
|
$
|
85,000
|
|
|
$
|
75,675
|
|
|
$
|
250,645
|
|
|
$
|
235,378
|
|
|
Daily weighted average number of subscribers
|
26,487,969
|
|
|
25,267,241
|
|
|
26,035,178
|
|
|
24,646,938
|
|
||||
|
Customer service and billing expenses, per average subscriber
|
$
|
1.07
|
|
|
$
|
1.00
|
|
|
$
|
1.07
|
|
|
$
|
1.06
|
|
|
|
Unaudited
|
||||||||||||||
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Cash Flow information
|
|
|
|
|
|
|
|
||||||||
|
Net cash provided by operating activities
|
$
|
296,096
|
|
|
$
|
302,236
|
|
|
$
|
888,168
|
|
|
$
|
744,257
|
|
|
Net cash used in investing activities
|
$
|
(28,827
|
)
|
|
$
|
(56,974
|
)
|
|
$
|
(61,922
|
)
|
|
$
|
(119,954
|
)
|
|
Net cash used in financing activities
|
$
|
(333,664
|
)
|
|
$
|
(180,247
|
)
|
|
$
|
(857,466
|
)
|
|
$
|
(428,464
|
)
|
|
Free Cash Flow
|
|
|
|
|
|
|
|
||||||||
|
Net cash provided by operating activities
|
$
|
296,096
|
|
|
$
|
302,236
|
|
|
$
|
888,168
|
|
|
$
|
744,257
|
|
|
Additions to property and equipment
|
(28,827
|
)
|
|
(55,255
|
)
|
|
(87,244
|
)
|
|
(118,235
|
)
|
||||
|
Purchases of restricted and other investments
|
—
|
|
|
(1,719
|
)
|
|
—
|
|
|
(1,719
|
)
|
||||
|
Return of capital from investment in unconsolidated entity
|
—
|
|
|
—
|
|
|
24,178
|
|
|
—
|
|
||||
|
Free cash flow
|
$
|
267,269
|
|
|
$
|
245,262
|
|
|
$
|
825,102
|
|
|
$
|
624,303
|
|
|
|
Unaudited
|
||||||||||||||
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
Subscriber acquisition costs (GAAP)
|
$
|
119,778
|
|
|
$
|
125,457
|
|
|
$
|
367,207
|
|
|
$
|
371,560
|
|
|
Less: margin from direct sales of radios and accessories (GAAP)
|
(13,644
|
)
|
|
(12,649
|
)
|
|
(45,404
|
)
|
|
(36,779
|
)
|
||||
|
Add: purchase price accounting adjustments
|
—
|
|
|
20,342
|
|
|
—
|
|
|
64,365
|
|
||||
|
|
$
|
106,134
|
|
|
$
|
133,150
|
|
|
$
|
321,803
|
|
|
$
|
399,146
|
|
|
Installations
|
3,038,041
|
|
|
2,973,681
|
|
|
9,396,115
|
|
|
8,657,841
|
|
||||
|
SAC, per installation
|
$
|
35
|
|
|
$
|
45
|
|
|
$
|
34
|
|
|
$
|
46
|
|
|
ITEM 1A.
|
RISK FACTORS
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share (a)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)
|
||||||
|
July 1, 2014 - July 31, 2014
|
|
35,000,000
|
|
|
$
|
3.43
|
|
|
35,000,000
|
|
|
$
|
2,564,718,581
|
|
|
August 1, 2014 - August 31, 2014
|
|
84,889,755
|
|
|
(b)
|
|
|
84,889,755
|
|
|
$
|
2,320,362,715
|
|
|
|
September 1, 2014 - September 30, 2014
|
|
56,357,303
|
|
|
(c)
|
|
|
56,357,303
|
|
|
$
|
2,231,626,158
|
|
|
|
Total
|
|
176,247,058
|
|
|
(b)(c)
|
|
|
176,247,058
|
|
|
|
|||
|
(a)
|
These amounts include fees and commissions associated with the shares repurchased.
|
|
(b)
|
In May 2014, we prepaid
$600 million
under an ASR agreement (the "May ASR Agreement") which settled in August 2014 at which time we received a final incremental delivery of
39.3 million
shares of our common stock and
$93.6 million
for the unused portion of our original prepayment. In August 2014, we prepaid
$250 million
under an ASR agreement (the "August ASR Agreement") and received an interim delivery of 20.4 million shares of our common stock. In addition, during August 2014 we purchased 25.2 million shares of our common stock on the open market at an average price of $3.49 per share. See Note 14 to the unaudited consolidated financial statements included in this report.
|
|
(c)
|
In September 2014, we received 31.5 million additional shares of our common stock under the August ASR Agreement. The August ASR Agreement settled on October 1, 2014, at which time we received an additional 19.4 million shares of our common stock, which are not reflected in this table. In addition, during September 2014, we purchased 24.8
million shares of our common stock on the open market at an average price of $3.57 per share. See Note 14 to the unaudited consolidated financial statements included in this report.
|
|
|
|
|
SIRIUS XM HOLDINGS INC.
|
|
|
|
|
|
By:
|
/s/ D
AVID
J. F
REAR
|
|
|
David J. Frear
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and Authorized Signatory)
|
|
Exhibit
|
|
|
Description
|
||
|
|
|
|
|
||
|
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 our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Comprehensive Income (Unaudited) for the three and nine months ended September 30, 2014 and 2013; (ii) Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013; (iii) Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2014 (Unaudited); (iv) Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2014 and 2013; and (v) Notes to Consolidated Financial Statements (Unaudited).
|
||
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|