NEW YORK, Oct. 27, 2016 /PRNewswire/ -- SiriusXM today
announced third quarter 2016 operating and financial results,
including record quarterly revenue of $1.3
billion, up 9% from the third quarter of 2015.
Net income totaled $194 million in
the third quarter of 2016, up 16% from $167
million in the third quarter of 2015. Net income per diluted
common share was $0.04 in the third
quarter of 2016 compared to $0.03 in
the third quarter of 2015. Adjusted EBITDA grew 10% in the third
quarter of 2016 to $492 million,
while operating cash flow and free cash flow totaled $422 million and $357
million, respectively.
SiriusXM also announced today that its Board of Directors
declared its first quarterly dividend in the amount of $0.01 per share of common stock payable on
November 30, 2016 to stockholders of
record as of the close of business on November 9, 2016. The company also announced that
the Board of Directors intends to institute a quarterly dividend on
its common stock in an aggregate annual amount of $0.04 per share.
The Board also approved an additional $2
billion of share repurchases, bringing SiriusXM's total
repurchase authorization to $10
billion. SiriusXM has already repurchased an aggregate of
$7.6 billion of common stock under
its stock repurchase program.
"SiriusXM's performance in the third quarter was exemplary. We
grew self-pay subscribers by 385,000 and turned in record quarterly
high levels of revenue and adjusted EBITDA. Additionally, we
attained our highest-ever ARPU and adjusted EBITDA margin and
lowest-ever SAC per installation and customer service cost per
subscriber. In short, our business is operating more efficiently
than ever before, and we are pleased to increase our revenue and
adjusted EBITDA guidance for the second time this year," said
Jim Meyer, Chief Executive Officer,
SiriusXM.
"We remain dedicated to bringing the best audio entertainment in
an easy to use bundle of programming to a nation of listeners. In
recent months, we've strengthened areas where we are leaders, such
as country music, added new talent in talk programming, and held
special, one-of-a kind live music events for subscribers and
listeners nationwide, all content you can only find at SiriusXM,"
added Meyer.
THIRD QUARTER 2016 HIGHLIGHTS
- SiriusXM Subscribers Approach 31 Million. The company
added 345,000 net new subscribers during the most recent three
month period to end the third quarter of 2016 with approximately 31
million subscribers. Self-pay net additions were 385,000 during the
third quarter, resulting in self-pay subscribers of 25.5 million at
September 30, 2016.
- Strong Revenue Growth and Record ARPU. Revenue climbed
9% to a quarterly record of $1.3
billion. The growth was driven by a 7% increase in
subscribers and a 3% increase in average revenue per user (ARPU) to
$13.04.
- Record Adjusted EBITDA. Adjusted EBITDA in the third
quarter of 2016 was $492 million, a
record quarterly high, and up 10% from $447
million in the third quarter of 2015. Adjusted EBITDA margin
was a record high 38.4% in the third quarter of 2016, up from 38.2%
in the third quarter of 2015.
"Since the start of the third quarter, we spent roughly
$300 million to repurchase 72 million
shares of our common stock. SiriusXM's average share count declined
by 8% in the third quarter 2016 from a year earlier as a result of
our share repurchases. We are also pleased to announce a regular
dividend as an element of our capital return program, beginning at
$0.01 per share per quarter. Our debt
to adjusted EBITDA remained just 3.4 times, and we ended the third
quarter 2016 with a cash balance of $572
million in anticipation of the October 1 redemption of our 5.875% Senior Notes
due 2020. We expect to continue strong capital returns to
stockholders while making strategic investments in technology,
content, and new satellite infrastructure," noted David Frear, Chief Financial Officer,
SiriusXM.
INCREASED 2016 GUIDANCE
The company now expects full-year 2016 revenues to be
approximately $5 billion and adjusted
EBITDA to reach approximately $1.85
billion. SiriusXM's 2016 guidance for continued growth in
total subscribers, self-pay subscribers, and free cash flow remains
unchanged. The company's full-year 2016 guidance is as follows:
- Net self-pay subscriber additions of approximately 1.6
million,
- Total net subscriber additions of approximately 1.7
million,
- Revenue of approximately $5
billion,
- Adjusted EBITDA of approximately $1.85
billion, and
- Free cash flow approaching $1.5
billion.
CAPITAL RETURN PROGRAM
Shares of common stock may be purchased from time to time on the
open market, pursuant to pre-set trading plans meeting the
requirements of Rule 10b5-1 under the Exchange Act of 1934, as
amended, in privately negotiated transactions, including in
accelerated stock repurchase transactions and transactions with
Liberty Media and its affiliates, or otherwise. The company expects
to fund the additional repurchases through a combination of cash on
hand, cash generated by operations and future borrowings. The size
and timing of these purchases will be based on a number of factors,
including price and business and market conditions.
Our dividend policy may change at any time without notice to our
stockholders. The declaration and payment of dividends is at
the discretion of our Board of Directors in accordance with
applicable law after taking into account various factors, including
our financial condition, operating results, current and anticipated
cash needs, limitations imposed by our indebtedness, legal
requirements and other factors that our Board of Directors deems
relevant.
THIRD QUARTER 2016 RESULTS
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
(UNAUDITED)
|
|
|
|
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
(in thousands,
except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue:
|
|
|
|
|
|
|
|
Subscriber
revenue
|
$
|
1,069,746
|
|
|
$
|
974,471
|
|
|
$
|
3,112,712
|
|
|
$
|
2,826,018
|
|
Advertising
revenue
|
34,268
|
|
|
33,131
|
|
|
99,330
|
|
|
88,843
|
|
Equipment
revenue
|
31,306
|
|
|
25,875
|
|
|
86,285
|
|
|
79,979
|
|
Other
revenue
|
142,326
|
|
|
136,235
|
|
|
415,895
|
|
|
379,072
|
|
Total
revenue
|
1,277,646
|
|
|
1,169,712
|
|
|
3,714,222
|
|
|
3,373,912
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
services:
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
272,823
|
|
|
238,620
|
|
|
788,952
|
|
|
783,115
|
|
Programming and
content
|
89,015
|
|
|
75,707
|
|
|
257,760
|
|
|
216,223
|
|
Customer service and
billing
|
94,923
|
|
|
94,492
|
|
|
285,502
|
|
|
278,521
|
|
Satellite and
transmission
|
22,224
|
|
|
22,743
|
|
|
80,609
|
|
|
65,761
|
|
Cost of
equipment
|
9,674
|
|
|
9,246
|
|
|
29,181
|
|
|
29,021
|
|
Subscriber
acquisition costs
|
120,111
|
|
|
133,009
|
|
|
381,516
|
|
|
391,773
|
|
Sales and
marketing
|
99,194
|
|
|
90,541
|
|
|
279,278
|
|
|
255,778
|
|
Engineering, design
and development
|
19,254
|
|
|
16,132
|
|
|
57,588
|
|
|
47,180
|
|
General and
administrative
|
90,369
|
|
|
67,234
|
|
|
249,052
|
|
|
219,194
|
|
Depreciation and
amortization
|
67,880
|
|
|
70,404
|
|
|
202,215
|
|
|
202,527
|
|
Total operating
expenses
|
885,467
|
|
|
818,128
|
|
|
2,611,653
|
|
|
2,489,093
|
|
Income from
operations
|
392,179
|
|
|
351,584
|
|
|
1,102,569
|
|
|
884,819
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(89,092)
|
|
|
(76,624)
|
|
|
(250,888)
|
|
|
(221,912)
|
|
Other
income
|
2,370
|
|
|
4,133
|
|
|
15,733
|
|
|
9,077
|
|
Total other
expense
|
(86,722)
|
|
|
(72,491)
|
|
|
(235,155)
|
|
|
(212,835)
|
|
Income before income
taxes
|
305,457
|
|
|
279,093
|
|
|
867,414
|
|
|
671,984
|
|
Income tax
expense
|
(111,556)
|
|
|
(112,543)
|
|
|
(326,108)
|
|
|
(296,893)
|
|
Net income
|
$
|
193,901
|
|
|
$
|
166,550
|
|
|
$
|
541,306
|
|
|
$
|
375,091
|
|
Foreign currency
translation adjustment, net of tax
|
(14)
|
|
|
(91)
|
|
|
420
|
|
|
(100)
|
|
Total comprehensive
income
|
$
|
193,887
|
|
|
$
|
166,459
|
|
|
$
|
541,726
|
|
|
$
|
374,991
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
$
|
0.11
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
$
|
0.11
|
|
|
$
|
0.07
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
4,870,281
|
|
|
5,297,797
|
|
|
4,957,820
|
|
|
5,436,378
|
|
Diluted
|
4,919,829
|
|
|
5,346,438
|
|
|
5,005,133
|
|
|
5,487,116
|
|
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
(in thousands,
except per share data)
|
September 30,
2016
|
|
December 31,
2015
|
ASSETS
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
572,382
|
|
|
$
|
111,838
|
|
Receivables,
net
|
233,419
|
|
|
234,782
|
|
Inventory,
net
|
28,030
|
|
|
22,295
|
|
Related party current
assets
|
5,249
|
|
|
5,941
|
|
Prepaid expenses and
other current assets
|
202,289
|
|
|
187,033
|
|
Total current
assets
|
1,041,369
|
|
|
561,889
|
|
Property and
equipment, net
|
1,381,114
|
|
|
1,415,401
|
|
Intangible assets,
net
|
2,556,568
|
|
|
2,593,346
|
|
Goodwill
|
2,205,107
|
|
|
2,205,107
|
|
Related party
long-term assets
|
6,163
|
|
|
—
|
|
Deferred tax
assets
|
1,101,014
|
|
|
1,115,731
|
|
Other long-term
assets
|
131,492
|
|
|
155,188
|
|
Total
assets
|
$
|
8,422,827
|
|
|
$
|
8,046,662
|
|
LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
620,599
|
|
|
$
|
625,313
|
|
Accrued
interest
|
108,370
|
|
|
91,655
|
|
Current portion of
deferred revenue
|
1,811,283
|
|
|
1,771,915
|
|
Current maturities of
long-term debt
|
358,701
|
|
|
4,764
|
|
Related party current
liabilities
|
3,015
|
|
|
2,840
|
|
Total current
liabilities
|
2,901,968
|
|
|
2,496,487
|
|
Deferred
revenue
|
170,662
|
|
|
157,609
|
|
Long-term
debt
|
5,743,389
|
|
|
5,443,614
|
|
Related party
long-term liabilities
|
8,665
|
|
|
10,795
|
|
Deferred tax
liabilities
|
6,681
|
|
|
6,681
|
|
Other long-term
liabilities
|
97,976
|
|
|
97,967
|
|
Total
liabilities
|
8,929,341
|
|
|
8,213,153
|
|
Stockholders'
(deficit) equity:
|
|
|
|
Common stock, par
value $0.001; 9,000,000 shares authorized; 4,846,154 and
5,153,451 shares issued; 4,843,154 and
5,147,647 outstanding at September 30,
2016 and December 31, 2015,
respectively
|
4,846
|
|
|
5,153
|
|
Accumulated other
comprehensive loss, net of tax
|
(82)
|
|
|
(502)
|
|
Additional paid-in
capital
|
3,597,256
|
|
|
4,783,795
|
|
Treasury stock, at
cost; 3,000 and 5,804 shares of common stock at September 30,
2016
and December 31, 2015,
respectively
|
(12,526)
|
|
|
(23,727)
|
|
Accumulated
deficit
|
(4,096,008)
|
|
|
(4,931,210)
|
|
Total stockholders'
(deficit) equity
|
(506,514)
|
|
|
(166,491)
|
|
Total liabilities and
stockholders' (deficit) equity
|
$
|
8,422,827
|
|
|
$
|
8,046,662
|
|
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
|
For the Nine
Months Ended September 30,
|
(in
thousands)
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
541,306
|
|
|
$
|
375,091
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
202,215
|
|
|
202,527
|
|
Non-cash interest
expense, net of amortization of premium
|
6,571
|
|
|
5,851
|
|
Provision for
doubtful accounts
|
39,629
|
|
|
34,031
|
|
Amortization of
deferred income related to equity method investment
|
(2,082)
|
|
|
(2,082)
|
|
Gain on
unconsolidated entity investments, net
|
(9,725)
|
|
|
—
|
|
Dividend received
from unconsolidated entity investment
|
7,160
|
|
|
11,260
|
|
Loss on disposal of
assets
|
12,912
|
|
|
—
|
|
Share-based payment
expense
|
77,890
|
|
|
62,334
|
|
Deferred income
taxes
|
308,613
|
|
|
285,478
|
|
Other non-cash
purchase price adjustments
|
—
|
|
|
(1,394)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
(38,266)
|
|
|
(50,651)
|
|
Inventory
|
(5,735)
|
|
|
(7,346)
|
|
Related party,
net
|
(2,373)
|
|
|
(14,020)
|
|
Prepaid expenses and
other current assets
|
(15,985)
|
|
|
(70,758)
|
|
Other long-term
assets
|
26,668
|
|
|
(51,842)
|
|
Accounts payable and
accrued expenses
|
(1,841)
|
|
|
26,584
|
|
Accrued
interest
|
16,715
|
|
|
14,923
|
|
Deferred
revenue
|
52,421
|
|
|
81,626
|
|
Other long-term
liabilities
|
11
|
|
|
(658)
|
|
Net cash provided by
operating activities
|
1,216,104
|
|
|
900,954
|
|
Cash flows from
investing activities:
|
|
|
|
Additions to property
and equipment
|
(132,246)
|
|
|
(90,943)
|
|
Purchases of
restricted and other investments
|
(4,168)
|
|
|
(3,966)
|
|
Net cash used in
investing activities
|
(136,414)
|
|
|
(94,909)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
exercise of stock options
|
348
|
|
|
259
|
|
Taxes paid in lieu of
shares issued for stock-based compensation
|
(32,603)
|
|
|
(39,622)
|
|
Proceeds from
long-term borrowings and revolving credit facility, net of
costs
|
1,387,257
|
|
|
1,579,323
|
|
Repayment of
long-term borrowings and revolving credit facility
|
(748,864)
|
|
|
(693,456)
|
|
Common stock
repurchased and retired
|
(1,225,284)
|
|
|
(1,647,728)
|
|
Net cash used in
financing activities
|
(619,146)
|
|
|
(801,224)
|
|
Net increase in cash
and cash equivalents
|
460,544
|
|
|
4,821
|
|
Cash and cash
equivalents at beginning of period
|
111,838
|
|
|
147,724
|
|
Cash and cash
equivalents at end of period
|
$
|
572,382
|
|
|
$
|
152,545
|
|
Key Financial and Operating Performance Metrics
Subscribers and subscription related revenues and expenses
associated with our connected vehicle services are not included in
our subscriber count or subscriber-based operating metrics.
Set forth below are our subscriber balances as of
September 30, 2016 compared to September 30, 2015:
|
As of September
30,
|
|
2016 vs 2015
Change
|
(in
thousands)
|
2016
|
|
2015
|
|
Amount
|
|
%
|
Self-pay
subscribers
|
25,528
|
|
|
23,816
|
|
|
1,712
|
|
|
7
|
%
|
Paid promotional
subscribers
|
5,463
|
|
|
5,143
|
|
|
320
|
|
|
6
|
%
|
Ending subscribers
(a)
|
30,991
|
|
|
28,960
|
|
|
2,031
|
|
|
7
|
%
|
|
|
(a)
|
Amounts may not sum
as a result of rounding.
|
The following table contains our Non-GAAP financial and
operating performance measures which are based on our adjusted
results of operations for the three and nine months ended
September 30, 2016 and 2015:
|
|
|
|
|
2016 vs 2015
Change
|
|
For the Three
Months
Ended September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
Three
Months
|
|
Nine
Months
|
(in thousands,
except per subscriber and per installation amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
Self-pay
subscribers
|
385
|
|
|
381
|
|
|
1,240
|
|
|
1,293
|
|
|
4
|
|
|
1
|
%
|
|
(53)
|
|
|
(4)
|
%
|
Paid promotional
subscribers
|
(39)
|
|
|
145
|
|
|
157
|
|
|
355
|
|
|
(184)
|
|
|
(127)
|
%
|
|
(198)
|
|
|
(56)
|
%
|
Net additions
(a)
|
345
|
|
|
525
|
|
|
1,397
|
|
|
1,649
|
|
|
(180)
|
|
|
(34)
|
%
|
|
(252)
|
|
|
(15)
|
%
|
Daily weighted
average
number of subscribers
|
30,776
|
|
|
28,649
|
|
|
30,290
|
|
|
28,033
|
|
|
2,127
|
|
|
7
|
%
|
|
2,257
|
|
|
8
|
%
|
Average self-pay
monthly
churn
|
1.9
|
%
|
|
1.9
|
%
|
|
1.8
|
%
|
|
1.8
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
New vehicle
consumer
conversion rate
|
40
|
%
|
|
41
|
%
|
|
39
|
%
|
|
41
|
%
|
|
(1)
|
%
|
|
(2)
|
%
|
|
(2)
|
%
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
|
$
|
13.04
|
|
|
$
|
12.67
|
|
|
$
|
12.83
|
|
|
$
|
12.45
|
|
|
$
|
0.37
|
|
|
3
|
%
|
|
$
|
0.38
|
|
|
3
|
%
|
SAC, per
installation
|
$
|
28
|
|
|
$
|
34
|
|
|
$
|
31
|
|
|
$
|
33
|
|
|
$
|
(6)
|
|
|
(18)
|
%
|
|
$
|
(2)
|
|
|
(6)
|
%
|
Customer service and
billing
expenses, per average
subscriber
|
$
|
0.97
|
|
|
$
|
1.00
|
|
|
$
|
0.98
|
|
|
$
|
1.00
|
|
|
$
|
(0.03)
|
|
|
(3)
|
%
|
|
$
|
(0.02)
|
|
|
(2)
|
%
|
Adjusted
EBITDA
|
$
|
491,892
|
|
|
$
|
447,194
|
|
|
$
|
1,401,024
|
|
|
$
|
1,261,382
|
|
|
$
|
44,698
|
|
|
10
|
%
|
|
$
|
139,642
|
|
|
11
|
%
|
Free cash
flow
|
$
|
356,527
|
|
|
$
|
368,899
|
|
|
$
|
1,079,690
|
|
|
$
|
1,016,045
|
|
|
$
|
(12,372)
|
|
|
(3)
|
%
|
|
$
|
63,645
|
|
|
6
|
%
|
Diluted weighted
average
common shares outstanding
(GAAP)
|
4,919,829
|
|
|
5,346,438
|
|
|
5,005,133
|
|
|
5,487,116
|
|
|
(426,609)
|
|
|
(8)
|
%
|
|
(481,983)
|
|
|
(9)
|
%
|
|
|
(a)
|
Amounts may not sum
as a result of rounding.
|
Glossary
Adjusted EBITDA - EBITDA is defined as net income
before interest expense, income tax expense and depreciation and
amortization. We adjust EBITDA to exclude the impact of other
income as well as certain other charges discussed below. Adjusted
EBITDA is one of the primary Non-GAAP financial measures we use to
(i) evaluate the performance of our on-going core operating results
period over period, (ii) base our internal budgets and (iii)
compensate management. Adjusted EBITDA is a Non-GAAP financial
measure that excludes (if applicable): (i) certain
adjustments as a result of the purchase price accounting for the
merger of Sirius and XM, (ii) share-based payment expense and (iii)
other significant operating expense (income) that do not relate to
the on-going performance of our business. We believe adjusted
EBITDA is a useful measure of the underlying trend of our operating
performance, which provides useful information about our business
apart from the costs associated with our capital structure and
purchase price accounting. We believe investors find this Non-GAAP
financial measure useful when analyzing our results and comparing
our operating performance to the performance of other
communications, entertainment and media companies. We believe
investors use adjusted EBITDA to estimate our current enterprise
value and to make investment decisions. Because of large capital
investments in our satellite radio system our results of operations
reflect significant charges for depreciation expense. We believe
the exclusion of share-based payment expense is useful as it is not
directly related to the operational conditions of our
business. We also believe the exclusion of settlements
related to the historical use of pre-1972 sound recordings and loss
on disposal of assets is useful as it does not represent an expense
incurred as part of our normal operations for the period.
Adjusted EBITDA has certain limitations in that it does not take
into account the impact to our statements of comprehensive income
of certain expenses, including share-based payment expense and
certain purchase price accounting for the merger of Sirius and XM.
We endeavor to compensate for the limitations of the Non-GAAP
measure presented by also providing the comparable GAAP measure
with equal or greater prominence and descriptions of the
reconciling items, including quantifying such items, to derive the
Non-GAAP measure. Investors that wish to compare and
evaluate our operating results after giving effect for these costs,
should refer to net income as disclosed in our unaudited
consolidated statements of comprehensive income. Since adjusted
EBITDA is a Non-GAAP financial performance measure, our calculation
of adjusted EBITDA may be susceptible to varying calculations; may
not be comparable to other similarly titled measures of other
companies; and should not be considered in isolation, as a
substitute for, or superior to measures of financial performance
prepared in accordance with GAAP. The reconciliation of net income
to the adjusted EBITDA is calculated as follows:
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
(in
thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
income:
|
$
|
193,901
|
|
|
$
|
166,550
|
|
|
$
|
541,306
|
|
|
$
|
375,091
|
|
Add back items
excluded from Adjusted EBITDA:
|
|
|
|
|
|
|
|
Purchase price
accounting adjustments:
|
|
|
|
|
|
|
|
Revenues
|
1,813
|
|
|
1,813
|
|
|
5,438
|
|
|
5,438
|
|
Operating
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,394)
|
|
Pre-1972 sounds
recordings legal settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
107,658
|
|
Loss on disposal of
assets
|
—
|
|
|
—
|
|
|
12,912
|
|
|
—
|
|
Share-based payment
expense (1)
|
30,020
|
|
|
23,393
|
|
|
77,890
|
|
|
62,334
|
|
Depreciation and
amortization
|
67,880
|
|
|
70,404
|
|
|
202,215
|
|
|
202,527
|
|
Interest
expense
|
89,092
|
|
|
76,624
|
|
|
250,888
|
|
|
221,912
|
|
Other
income
|
(2,370)
|
|
|
(4,133)
|
|
|
(15,733)
|
|
|
(9,077)
|
|
Income tax
expense
|
111,556
|
|
|
112,543
|
|
|
326,108
|
|
|
296,893
|
|
Adjusted
EBITDA
|
$
|
491,892
|
|
|
$
|
447,194
|
|
|
$
|
1,401,024
|
|
|
$
|
1,261,382
|
|
|
|
(1)
|
Allocation of
share-based payment expense
|
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
(in
thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Programming and
content
|
$
|
5,580
|
|
|
$
|
2,899
|
|
|
$
|
14,131
|
|
|
$
|
7,245
|
|
Customer service and
billing
|
1,069
|
|
|
793
|
|
|
2,694
|
|
|
2,164
|
|
Satellite and
transmission
|
1,298
|
|
|
1,244
|
|
|
3,373
|
|
|
3,156
|
|
Sales and
marketing
|
6,050
|
|
|
5,288
|
|
|
15,609
|
|
|
13,056
|
|
Engineering, design
and development
|
3,837
|
|
|
2,801
|
|
|
9,393
|
|
|
7,063
|
|
General and
administrative
|
12,186
|
|
|
10,368
|
|
|
32,690
|
|
|
29,650
|
|
Total share-based
payment expense
|
$
|
30,020
|
|
|
$
|
23,393
|
|
|
$
|
77,890
|
|
|
$
|
62,334
|
|
ARPU - is derived from total earned subscriber
revenue, advertising revenue and other subscription-related
revenue, excluding revenue associated with our connected vehicle
services, divided by the number of months in the period,
divided by the daily weighted average number of subscribers for the
period. Other subscription-related revenue includes the U.S. Music
Royalty Fee. ARPU is calculated as follows:
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
(in thousands,
except per subscriber amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Subscriber revenue,
excluding connected vehicle
|
$
|
1,048,033
|
|
|
$
|
949,301
|
|
|
$
|
3,044,438
|
|
|
$
|
2,752,993
|
|
Add: advertising
revenue
|
34,268
|
|
|
33,131
|
|
|
99,330
|
|
|
88,843
|
|
Add: other
subscription-related revenue
|
122,013
|
|
|
106,483
|
|
|
353,606
|
|
|
299,437
|
|
|
$
|
1,204,314
|
|
|
$
|
1,088,915
|
|
|
$
|
3,497,374
|
|
|
$
|
3,141,273
|
|
Daily weighted
average number of subscribers
|
30,776
|
|
|
28,649
|
|
|
30,290
|
|
|
28,033
|
|
ARPU
|
$
|
13.04
|
|
|
$
|
12.67
|
|
|
$
|
12.83
|
|
|
$
|
12.45
|
|
Average self-pay monthly churn - is defined as the
monthly average of self-pay deactivations for the period divided by
the average number of self-pay subscribers for the period.
Customer service and billing expenses, per average
subscriber - is derived from total customer service and
billing expenses, excluding connected vehicle customer service and
billing expenses and share-based payment expense, divided by the
number of months in the period, divided by the daily weighted
average number of subscribers for the period. We believe the
exclusion of share-based payment expense in our calculation of
customer service and billing expenses, per average subscriber, is
useful as share-based payment expense is not directly related to
the operational conditions that give rise to variations in the
components of our customer service and billing expenses. Customer
service and billing expenses, per average subscriber, is calculated
as follows:
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
(in thousands,
except per subscriber amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Customer service and
billing expenses, excluding
connected vehicle
|
$
|
90,582
|
|
|
$
|
86,840
|
|
|
$
|
270,964
|
|
|
$
|
255,105
|
|
Less: share-based
payment expense
|
(1,069)
|
|
|
(793)
|
|
|
(2,694)
|
|
|
(2,164)
|
|
|
$
|
89,513
|
|
|
$
|
86,047
|
|
|
$
|
268,270
|
|
|
$
|
252,941
|
|
Daily weighted
average number of subscribers
|
30,776
|
|
|
28,649
|
|
|
30,290
|
|
|
28,033
|
|
Customer service and
billing expenses, per average
subscriber
|
$
|
0.97
|
|
|
$
|
1.00
|
|
|
$
|
0.98
|
|
|
$
|
1.00
|
|
Free cash flow - is derived from cash flow
provided by operating activities, net of additions to property and
equipment, restricted and other investment activity and the return
of capital from investment in unconsolidated entity.
Free cash flow is a metric that our management and board of
directors use to evaluate the cash generated by our operations, net
of capital expenditures and other investment activity and
significant items that do not relate to the on-going performance of
our business. In a capital intensive business, with
significant investments in satellites, we look at our operating
cash flow, net of these investing cash outflows, to determine cash
available for future subscriber acquisition and capital
expenditures, to repurchase or retire debt, to acquire other
companies and to evaluate our ability to return capital to
stockholders. We believe free cash flow is an indicator of the
long-term financial stability of our business. Free cash
flow, which is reconciled to "Net cash provided by operating
activities," is a Non-GAAP financial measure. This
measure can be calculated by deducting amounts under the captions
"Additions to property and equipment" and deducting or adding
Restricted and other investment activity from "Net cash provided by
operating activities" from the unaudited consolidated statements of
cash flows, adjusted for any significant legal settlements.
We have excluded the $210 million
payment related to the pre-1972 sound recordings legal settlement
from our free cash flow calculation in the three and nine months
ended September 30,
2015. Free cash flow should be used in conjunction with
other GAAP financial performance measures and may not be comparable
to free cash flow measures presented by other
companies. Free cash flow should be viewed as a
supplemental measure rather than an alternative measure of cash
flows from operating activities, as determined in accordance with
GAAP. Free cash flow is limited and does not represent
remaining cash flows available for discretionary expenditures due
to the fact that the measure does not deduct the payments required
for debt maturities. We believe free cash flow provides useful
supplemental information to investors regarding our current cash
flow, along with other GAAP measures (such as cash flows from
operating and investing activities), to determine our financial
condition, and to compare our operating performance to other
communications, entertainment and media companies. Free cash
flow is calculated as follows:
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
(in
thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash Flow
information
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
421,816
|
|
|
$
|
188,613
|
|
|
$
|
1,216,104
|
|
|
$
|
900,954
|
|
Net cash used in
investing activities
|
$
|
(65,289)
|
|
|
$
|
(29,714)
|
|
|
$
|
(136,414)
|
|
|
$
|
(94,909)
|
|
Net cash used in
financing activities
|
$
|
(260,598)
|
|
|
$
|
(300,407)
|
|
|
$
|
(619,146)
|
|
|
$
|
(801,224)
|
|
Free Cash
Flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
421,816
|
|
|
$
|
188,613
|
|
|
$
|
1,216,104
|
|
|
$
|
900,954
|
|
Additions to property
and equipment
|
(65,074)
|
|
|
(29,714)
|
|
|
(132,246)
|
|
|
(90,943)
|
|
Purchases of
restricted and other investments
|
(215)
|
|
|
—
|
|
|
(4,168)
|
|
|
(3,966)
|
|
Pre-1972 sound
recordings legal settlement
|
—
|
|
|
210,000
|
|
|
—
|
|
|
210,000
|
|
Free cash
flow
|
$
|
356,527
|
|
|
$
|
368,899
|
|
|
$
|
1,079,690
|
|
|
$
|
1,016,045
|
|
New vehicle consumer conversion rate - is defined as
the percentage of owners and lessees of new vehicles that receive
our satellite radio service and convert to become self-paying
subscribers after the initial promotion period. At the time
satellite radio enabled vehicles are sold or leased, the owners or
lessees generally receive trial subscriptions ranging from three to
twelve months. We measure conversion rate three months after the
period in which the trial service ends. The metric excludes rental
and fleet vehicles.
Subscriber acquisition cost, per installation - or
SAC, per installation, is derived from subscriber acquisition costs
and margins from the sale of radios and accessories, divided by the
number of satellite radio installations in new vehicles and
shipments of aftermarket radios for the period. SAC, per
installation, is calculated as follows:
|
For the Three
Months Ended
September 30,
|
|
For the Nine
Months Ended
September 30,
|
(in thousands,
except per installation amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Subscriber
acquisition costs
|
$
|
120,111
|
|
|
$
|
133,009
|
|
|
$
|
381,516
|
|
|
$
|
391,773
|
|
Less: margin from
sales of radios and accessories
|
(21,632)
|
|
|
(16,629)
|
|
|
(57,104)
|
|
|
(50,958)
|
|
|
$
|
98,479
|
|
|
$
|
116,380
|
|
|
$
|
324,412
|
|
|
$
|
340,815
|
|
Installations
|
3,498
|
|
|
3,429
|
|
|
10,404
|
|
|
10,305
|
|
SAC, per
installation
|
$
|
28
|
|
|
$
|
34
|
|
|
$
|
31
|
|
|
$
|
33
|
|
About SiriusXM
Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world's largest
radio company measured by revenue and has approximately 31 million
subscribers. SiriusXM creates and offers commercial-free music;
premier sports talk and live events; comedy; news; exclusive talk
and entertainment, and a wide-range of Latin music, sports and talk
programming. SiriusXM is available in vehicles from every major car
company in the U.S. and on smartphones and other connected devices
as well as online at siriusxm.com. SiriusXM radios and accessories
are available from retailers nationwide and online at SiriusXM.
SiriusXM also provides premium traffic, weather, data and
information services for subscribers through SiriusXM Trafficâ„¢,
SiriusXM Travel Link, NavTraffic®, NavWeather™. SiriusXM delivers
weather, data and information services to aircraft and boats
through SiriusXM Aviation, SiriusXM Marineâ„¢, Sirius Marine Weather, XMWX Aviationâ„¢, XMWX
Weather, and XMWX Marineâ„¢. In addition, SiriusXM Music for Business
provides commercial-free music to a variety of businesses. SiriusXM
holds a minority interest in SiriusXM Canada which has
approximately 2.8 million subscribers. SiriusXM is also a leading
provider of connected vehicles services to major automakers, giving
customers access to a suite of safety, security, and convenience
services including automatic crash notification, stolen vehicle
recovery assistance, enhanced roadside assistance and turn-by-turn
navigation.
To download SiriusXM logos and artwork, visit
http://www.siriusxm.com/LogosAndPhotos.
This communication contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, but are not limited to,
statements about future financial and operating results, our plans,
objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified
by words such as "will likely result," "are expected to," "will
continue," "is anticipated," "estimated," "believe," "intend,"
"plan," "projection," "outlook" or words of similar meaning. Such
forward-looking statements are based upon the current beliefs and
expectations of our management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
beyond our control. Actual results and the timing of events may
differ materially from the results anticipated in these
forward-looking statements. SiriusXM does not provide a non-GAAP
reconciliation for Adjusted EBITDA guidance to Net income or Free
cash flow guidance to Net cash provided by operating activities
because it does not provide guidance for the reconciling items
between adjusted EBITDA to Net income, which includes the provision
for income taxes, interest expense and other income, nor does the
Company provide guidance for the reconciling items between Free
cash flow to Net cash provided by operating activities, which
includes additions to property and equipment. As items that
impact Net income and Net cash provided by operating activities are
out of the Company's control and/or cannot be reasonably predicted,
the Company is unable to provide such guidance as the most directly
comparable GAAP financial measures may vary materially from the
corresponding GAAP financial measures. Accordingly, a
reconciliation to Net income and Net cash provided by operating
activities is not available without unreasonable effort.
The following factors, among others, could cause actual
results and the timing of events to differ materially from the
anticipated results or other expectations expressed in the
forward-looking statements: our substantial competition, which is
likely to increase over time; our ability to attract and retain
subscribers, which is uncertain; consumer protection laws and their
enforcement; the unfavorable outcome of pending or future
litigation; the market for music rights, which is changing and
subject to uncertainties; our dependence upon the auto industry;
general economic conditions; the security of the personal
information about our customers; existing or future government laws
and regulations could harm our business; failure of our satellites
would significantly damage our business; the interruption or
failure of our information technology and communications systems;
our failure to realize benefits of acquisitions or other strategic
initiatives; rapid technological and industry changes; failure of
third parties to perform; harmful interference to our service from
new and existing wireless operations; our failure to comply with
FCC requirements; modifications to our business plan; our
indebtedness; our principal stockholder has significant influence
over our affairs and over actions requiring stockholder approval
and its interests may differ from interests of other holders of our
common stock; and impairment of our business by third-party
intellectual property rights. Additional factors that could cause
our results to differ materially from those described in the
forward-looking statements can be found in our Annual Report on
Form 10-K for the year ended December 31,
2015, which is filed with the Securities and Exchange
Commission (the "SEC") and available at the SEC's Internet site
(http://www.sec.gov). The information set forth herein speaks only
as of the date hereof, and we disclaim any intention or obligation
to update any forward looking statements as a result of
developments occurring after the date of this
communication.
Source: SiriusXM
Contact for SiriusXM:
Hooper Stevens
212-901-6718
Hooper.stevens@siriusxm.com
Patrick Reilly
212-901-6646
patrick.reilly@siriusxm.com
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SOURCE Sirius XM Holdings Inc.