NEW YORK, Feb. 2, 2017 /PRNewswire/ -- SiriusXM today
announced fourth quarter and full-year 2016 operating and financial
results, including record revenue of $1.3
billion and $5.0 billion,
respectively, up 9% and 10% versus the prior year periods.
Net income totaled $205 million
and $746 million in the fourth
quarter and full-year 2016, respectively, up 52% and 46% from
$135 million and $510 million in the fourth quarter and full-year
2015, respectively. Net income per diluted common share was
$0.04 and $0.15 in the fourth quarter and full-year 2016,
respectively, compared to $0.03 and
$0.09 in the fourth quarter and
full-year 2015, respectively. Adjusted EBITDA grew 20% and 13% in
the fourth quarter and full-year 2016, respectively, to
$475 million and $1.88 billion. Free cash flow and operating cash
flow in the fourth quarter grew 44% and 47%, respectively, to
$429 million and $503 million. Full-year 2016 free cash flow and
operating cash flow grew 15% and 38%, respectively, to $1.51 billion and $1.72
billion.
"Last year was a phenomenal year for SiriusXM's business, and we
expect continued success in 2017. We finished ahead of our guidance
across the board, with record revenue, adjusted EBITDA and free
cash flow. With more than 31 million subscribers, SiriusXM has
never had more paying customers. We've issued guidance for
continued growth in 2017, and we expect a record adjusted EBITDA of
more than $2 billion," said
Jim Meyer, Chief Executive Officer,
SiriusXM.
"We will continue to challenge ourselves to provide our
subscribers the very best audio content in an easy-to-use package.
We have launched an exclusive 24/7 channel, "FOX Sports on
SiriusXM," and we've started a daily show with the wildly popular
Barstool Sports. We added a new daily talk show with Craig Ferguson, and launched a new daily music
show, "Hits 1 in Hollywood",
broadcasting live from SiriusXM's Los
Angeles studios. We also provided our subscribers access to
one-of-a-kind events, such as Bon Jovi live in Miami. We never stand still in our quest to
have the freshest, most relevant content in the audio entertainment
industry, from music to sports to talk to comedy and beyond," added
Meyer.
FULL-YEAR 2016 HIGHLIGHTS
- SiriusXM Subscribers Exceed 31 Million. The company
added over 1.75 million net new subscribers during 2016 to end the
year with approximately 31.3 million subscribers. Self-pay net
additions were 1.66 million during the year, resulting in self-pay
subscribers of nearly 26 million at December
31, 2016.
- Strong Revenue Growth and Record ARPU. Annual revenue
climbed 10% to a record $5.0 billion.
The growth was driven by a 6% increase in subscribers and a 3%
increase in average revenue per user (ARPU) to $12.91.
- Record Adjusted EBITDA. Adjusted EBITDA in 2016 totaled
$1.88 billion, a record high, and up
13% from $1.66 billion in 2015.
Adjusted EBITDA margin was 37.3% in 2016, a 110 basis point
increase from 36.2% in 2015.
- Free Cash Flow Tops $1.5
Billion. Free cash flow for 2016 totaled $1.51 billion, up 15% from $1.32 billion in 2015. Operating cash flow for
2016 totaled $1.72 billion, up 38%
from 2015.
"During 2016, we spent approximately $1.67 billion to repurchase 420 million shares of
our common stock. SiriusXM's average share count in 2016 declined
by 9% from 2015 as a result of these repurchases. Additionally, we
returned nearly $50 million in cash
to our stockholders, with the initiation of our first regular
dividend in October, bringing total capital returned to
stockholders to approximately $1.72
billion in 2016. Our debt to adjusted EBITDA was just 3.1
times, and we ended 2016 with a cash balance of $214 million. Approximately $143 million of this cash at year end was held in
Canadian dollars in anticipation of closing the recapitalization of
our Canadian affiliate, SiriusXM Canada Inc., which we now expect
to occur early in the second quarter. In 2017, we expect to make
further investments in content, satellites, and technology while
continuing strong capital returns to stockholders," noted
David Frear, Chief Financial
Officer, SiriusXM.
2017 GUIDANCE
Our full-year 2017 guidance for net subscribers, revenue,
adjusted EBITDA, and free cash flow, originally issued on
January 5, 2017, is as follows:
- Self-pay net subscriber additions of approximately 1.3
million,
- Revenue of approximately $5.3
billion,
- Adjusted EBITDA of approximately $2.025
billion, and
- Free cash flow of approximately $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.
FOURTH QUARTER AND FULL-YEAR 2016 RESULTS
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
For the Three
Months Ended
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in thousands,
except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Subscriber
revenue
|
$
|
1,084,140
|
|
|
$
|
998,775
|
|
|
$
|
4,196,852
|
|
|
$
|
3,824,793
|
|
Advertising
revenue
|
38,901
|
|
|
33,449
|
|
|
138,231
|
|
|
122,292
|
|
Equipment
revenue
|
32,662
|
|
|
30,944
|
|
|
118,947
|
|
|
110,923
|
|
Other
revenue
|
147,295
|
|
|
132,978
|
|
|
563,190
|
|
|
512,050
|
|
Total
revenue
|
1,302,998
|
|
|
1,196,146
|
|
|
5,017,220
|
|
|
4,570,058
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
services:
|
|
|
|
|
|
|
|
Revenue share and
royalties
|
319,563
|
|
|
251,717
|
|
|
1,108,515
|
|
|
1,034,832
|
|
Programming and
content
|
96,019
|
|
|
76,868
|
|
|
353,779
|
|
|
293,091
|
|
Customer service and
billing
|
101,629
|
|
|
99,387
|
|
|
387,131
|
|
|
377,908
|
|
Satellite and
transmission
|
22,411
|
|
|
28,848
|
|
|
103,020
|
|
|
94,609
|
|
Cost of
equipment
|
11,701
|
|
|
13,703
|
|
|
40,882
|
|
|
42,724
|
|
Subscriber
acquisition costs
|
131,293
|
|
|
140,826
|
|
|
512,809
|
|
|
532,599
|
|
Sales and
marketing
|
107,446
|
|
|
98,411
|
|
|
386,724
|
|
|
354,189
|
|
Engineering, design
and development
|
24,558
|
|
|
17,223
|
|
|
82,146
|
|
|
64,403
|
|
General and
administrative
|
92,054
|
|
|
105,607
|
|
|
341,106
|
|
|
324,801
|
|
Depreciation and
amortization
|
66,764
|
|
|
69,687
|
|
|
268,979
|
|
|
272,214
|
|
Total operating
expenses
|
973,438
|
|
|
902,277
|
|
|
3,585,091
|
|
|
3,391,370
|
|
Income from
operations
|
329,560
|
|
|
293,869
|
|
|
1,432,129
|
|
|
1,178,688
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(80,337)
|
|
|
(77,191)
|
|
|
(331,225)
|
|
|
(299,103)
|
|
Loss on
extinguishment of debt and credit facilities,
net
|
(24,229)
|
|
|
—
|
|
|
(24,229)
|
|
|
—
|
|
Other
income
|
(748)
|
|
|
3,302
|
|
|
14,985
|
|
|
12,379
|
|
Total other
expense
|
(105,314)
|
|
|
(73,889)
|
|
|
(340,469)
|
|
|
(286,724)
|
|
Income before income
taxes
|
224,246
|
|
|
219,980
|
|
|
1,091,660
|
|
|
891,964
|
|
Income tax
expense
|
(19,619)
|
|
|
(85,347)
|
|
|
(345,727)
|
|
|
(382,240)
|
|
Net income
|
$
|
204,627
|
|
|
$
|
134,633
|
|
|
$
|
745,933
|
|
|
$
|
509,724
|
|
Foreign currency
translation adjustment, net of tax
|
(57)
|
|
|
—
|
|
|
363
|
|
|
(100)
|
|
Total comprehensive
income
|
$
|
204,570
|
|
|
$
|
134,633
|
|
|
$
|
746,296
|
|
|
$
|
509,624
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
$
|
0.15
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
$
|
0.15
|
|
|
$
|
0.09
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
4,795,628
|
|
|
5,195,673
|
|
|
4,917,050
|
|
|
5,375,707
|
|
Diluted
|
4,847,261
|
|
|
5,247,514
|
|
|
4,964,728
|
|
|
5,435,166
|
|
Dividends declared
per common share
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
|
|
|
As of December
31,
|
(in thousands,
except per share data)
|
2016
|
|
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
213,939
|
|
|
$
|
111,838
|
|
Receivables,
net
|
223,029
|
|
|
234,782
|
|
Inventory,
net
|
20,363
|
|
|
22,295
|
|
Related party current
assets
|
6,170
|
|
|
5,941
|
|
Prepaid expenses and
other current assets
|
179,148
|
|
|
187,033
|
|
Total current
assets
|
642,649
|
|
|
561,889
|
|
Property and
equipment, net
|
1,398,693
|
|
|
1,415,401
|
|
Intangible assets,
net
|
2,544,801
|
|
|
2,593,346
|
|
Goodwill
|
2,205,107
|
|
|
2,205,107
|
|
Related party
long-term assets
|
8,918
|
|
|
—
|
|
Deferred tax
assets
|
1,084,330
|
|
|
1,115,731
|
|
Other long-term
assets
|
119,097
|
|
|
155,188
|
|
Total
assets
|
$
|
8,003,595
|
|
|
$
|
8,046,662
|
|
LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
713,034
|
|
|
$
|
625,313
|
|
Accrued
interest
|
114,633
|
|
|
91,655
|
|
Current portion of
deferred revenue
|
1,832,609
|
|
|
1,771,915
|
|
Current maturities of
long-term debt
|
5,485
|
|
|
4,764
|
|
Related party current
liabilities
|
2,840
|
|
|
2,840
|
|
Total current
liabilities
|
2,668,601
|
|
|
2,496,487
|
|
Deferred
revenue
|
176,319
|
|
|
157,609
|
|
Long-term
debt
|
5,842,764
|
|
|
5,443,614
|
|
Related party
long-term liabilities
|
7,955
|
|
|
10,795
|
|
Deferred tax
liabilities
|
6,418
|
|
|
6,681
|
|
Other long-term
liabilities
|
93,553
|
|
|
97,967
|
|
Total
liabilities
|
8,795,610
|
|
|
8,213,153
|
|
Stockholders'
(deficit) equity:
|
|
|
|
Common stock, par
value $0.001; 9,000,000 shares authorized; 4,746,047 and
5,153,451 shares issued; 4,740,947
and 5,147,647 outstanding at December 31,
2016 and December 31, 2015,
respectively
|
4,745
|
|
|
5,153
|
|
Accumulated other
comprehensive loss, net of tax
|
(139)
|
|
|
(502)
|
|
Additional paid-in
capital
|
3,117,666
|
|
|
4,783,795
|
|
Treasury stock, at
cost; 5,100 and 5,804 shares of common stock at December
31,
2016 and December 31, 2015,
respectively
|
(22,906)
|
|
|
(23,727)
|
|
Accumulated
deficit
|
(3,891,381)
|
|
|
(4,931,210)
|
|
Total stockholders'
(deficit) equity
|
(792,015)
|
|
|
(166,491)
|
|
Total liabilities and
stockholders' (deficit) equity
|
$
|
8,003,595
|
|
|
$
|
8,046,662
|
|
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
For the Twelve
Months Ended December 31,
|
(in
thousands)
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
745,933
|
|
|
$
|
509,724
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
268,979
|
|
|
272,214
|
|
Non-cash interest
expense, net of amortization of premium
|
8,608
|
|
|
7,872
|
|
Provision for
doubtful accounts
|
55,941
|
|
|
47,237
|
|
Amortization of
deferred income related to equity method investment
|
(2,772)
|
|
|
(2,776)
|
|
Loss on
extinguishment of debt and credit facilities, net
|
24,229
|
|
|
—
|
|
Gain on
unconsolidated entity investments, net
|
(12,529)
|
|
|
—
|
|
Dividend received
from unconsolidated entity investment
|
7,160
|
|
|
14,788
|
|
Loss on disposal of
assets
|
12,912
|
|
|
7,384
|
|
Loss on change in
value of derivatives
|
—
|
|
|
—
|
|
Share-based payment
expense
|
108,604
|
|
|
84,310
|
|
Deferred income
taxes
|
323,562
|
|
|
365,499
|
|
Other non-cash
purchase price adjustments
|
—
|
|
|
(1,394)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables
|
(44,188)
|
|
|
(61,440)
|
|
Inventory
|
1,932
|
|
|
(2,898)
|
|
Related party,
net
|
(3,485)
|
|
|
(14,953)
|
|
Prepaid expenses and
other current assets
|
7,156
|
|
|
(67,204)
|
|
Other long-term
assets
|
38,835
|
|
|
(130,741)
|
|
Accounts payable and
accrued expenses
|
78,920
|
|
|
52,696
|
|
Accrued
interest
|
22,978
|
|
|
11,215
|
|
Deferred
revenue
|
79,404
|
|
|
145,242
|
|
Other long-term
liabilities
|
(2,942)
|
|
|
7,276
|
|
Net cash provided by
operating activities
|
1,719,237
|
|
|
1,244,051
|
|
Cash flows from
investing activities:
|
|
|
|
Additions to property
and equipment
|
(205,829)
|
|
|
(134,892)
|
|
Purchases of
restricted and other investments
|
(4,295)
|
|
|
(3,966)
|
|
Net cash used in
investing activities
|
(210,124)
|
|
|
(138,858)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
exercise of stock options
|
348
|
|
|
260
|
|
Taxes paid in lieu of
shares issued for stock-based compensation
|
(42,824)
|
|
|
(54,539)
|
|
Proceeds from
long-term borrowings and revolving credit facility, net of
costs
|
1,847,143
|
|
|
1,728,571
|
|
Payment of premiums
on redemption of debt
|
(19,097)
|
|
|
—
|
|
Repayment of
long-term borrowings and revolving credit facility
|
(1,470,985)
|
|
|
(797,117)
|
|
Common stock
repurchased and retired
|
(1,673,518)
|
|
|
(2,018,254)
|
|
Dividends
paid
|
(48,079)
|
|
|
—
|
|
Net cash used in
financing activities
|
(1,407,012)
|
|
|
(1,141,079)
|
|
Net increase
(decrease) in cash and cash equivalents
|
102,101
|
|
|
(35,886)
|
|
Cash and cash
equivalents at beginning of period
|
111,838
|
|
|
147,724
|
|
Cash and cash
equivalents at end of period
|
$
|
213,939
|
|
|
$
|
111,838
|
|
Key Financial and Operating Performance Metrics
Subscribers and subscription related revenues and expenses
associated with our connected vehicle services and Sirius XM Canada
are not included in our subscriber count or subscriber-based
operating metrics.
Set forth below are our subscriber balances as of
December 31, 2016 compared to December 31, 2015:
|
As of December
31,
|
|
2016 vs 2015
Change
|
(in
thousands)
|
2016
|
|
2015
|
|
Amount
|
|
%
|
Self-pay
subscribers
|
25,951
|
|
24,288
|
|
1,663
|
|
7%
|
Paid promotional
subscribers
|
5,395
|
|
5,306
|
|
89
|
|
2%
|
Ending
subscribers
|
31,346
|
|
29,594
|
|
1,752
|
|
6%
|
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 twelve months ended
December 31, 2016 and 2015, respectively:
|
|
|
|
|
2016 vs 2015
Change
|
(in thousands,
except per
subscriber and per installation
amounts)
|
For the Three
Months
Ended December 31,
|
|
For the Twelve
Months
Ended December 31,
|
|
Three
Months
|
|
12
Months
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
Self-pay
subscribers
|
423
|
|
|
472
|
|
|
1,663
|
|
|
1,765
|
|
|
(49)
|
|
|
(10)
|
%
|
|
(102)
|
|
|
(6)
|
%
|
Paid promotional
subscribers
|
(68)
|
|
|
162
|
|
|
89
|
|
|
517
|
|
|
(230)
|
|
|
(142)
|
%
|
|
(428)
|
|
|
(83)
|
%
|
Net additions
(a)
|
355
|
|
|
634
|
|
|
1,752
|
|
|
2,283
|
|
|
(279)
|
|
|
(44)
|
%
|
|
(531)
|
|
|
(23)
|
%
|
Daily weighted
average number of subscribers
|
31,100
|
|
|
29,238
|
|
|
30,494
|
|
|
28,337
|
|
|
1,862
|
|
|
6
|
%
|
|
2,157
|
|
|
8
|
%
|
Average self-pay
monthly churn
|
1.9
|
%
|
|
1.9
|
%
|
|
1.9
|
%
|
|
1.8
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0.1
|
%
|
|
6
|
%
|
New vehicle consumer
conversion rate
|
40
|
%
|
|
39
|
%
|
|
39
|
%
|
|
40
|
%
|
|
1
|
%
|
|
3
|
%
|
|
(1)
|
%
|
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARPU
|
$
|
13.16
|
|
|
$
|
12.75
|
|
|
$
|
12.91
|
|
|
$
|
12.53
|
|
|
$
|
0.41
|
|
|
3
|
%
|
|
$
|
0.38
|
|
|
3
|
%
|
SAC, per
installation
|
$
|
29
|
|
|
$
|
33
|
|
|
$
|
31
|
|
|
$
|
33
|
|
|
$
|
(4)
|
|
|
(12)
|
%
|
|
$
|
(2)
|
|
|
(6)
|
%
|
Customer service and
billing expenses, per average subscriber
|
$
|
1.03
|
|
|
$
|
1.04
|
|
|
$
|
1.00
|
|
|
$
|
1.01
|
|
|
$
|
(0.01)
|
|
|
(1)
|
%
|
|
$
|
(0.01)
|
|
|
(1)
|
%
|
Adjusted
EBITDA
|
$
|
474,751
|
|
|
$
|
396,235
|
|
|
$
|
1,875,775
|
|
|
$
|
1,657,617
|
|
|
$
|
78,516
|
|
|
20
|
%
|
|
$
|
218,158
|
|
|
13
|
%
|
Free cash
flow
|
$
|
429,423
|
|
|
$
|
299,148
|
|
|
$
|
1,509,113
|
|
|
$
|
1,315,193
|
|
|
$
|
130,275
|
|
|
44
|
%
|
|
$
|
193,920
|
|
|
15
|
%
|
Diluted weighted
average common shares outstanding (GAAP)
|
4,847,261
|
|
|
5,247,514
|
|
|
4,964,728
|
|
|
5,435,166
|
|
|
(400,253)
|
|
|
(8)
|
%
|
|
(470,438)
|
|
|
(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 past operating
performance with our current performance 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 the legal
settlements and reserves related to the historical use of sound
recordings and loss on disposal of assets is useful as they are
significant expenses not 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 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
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in
thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net
income:
|
$
|
204,627
|
|
|
$
|
134,633
|
|
|
$
|
745,933
|
|
|
$
|
509,724
|
|
Add back items
excluded from Adjusted EBITDA:
|
|
|
|
|
|
|
|
Purchase price
accounting adjustments:
|
|
|
|
|
|
|
|
Revenues
|
1,813
|
|
|
1,813
|
|
|
7,251
|
|
|
7,251
|
|
Operating
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,394)
|
|
Sound recording legal
settlements and reserves
|
45,900
|
|
|
1,506
|
|
|
45,900
|
|
|
109,164
|
|
Loss on disposal of
assets
|
—
|
|
|
7,384
|
|
|
12,912
|
|
|
7,384
|
|
Share-based payment
expense (1)
|
30,714
|
|
|
21,976
|
|
|
108,604
|
|
|
84,310
|
|
Depreciation and
amortization
|
66,764
|
|
|
69,687
|
|
|
268,979
|
|
|
272,214
|
|
Interest
expense
|
80,337
|
|
|
77,191
|
|
|
331,225
|
|
|
299,103
|
|
Loss on
extinguishment of debt and credit facilities, net
|
24,229
|
|
|
—
|
|
|
24,229
|
|
|
—
|
|
Other
income
|
748
|
|
|
(3,302)
|
|
|
(14,985)
|
|
|
(12,379)
|
|
Income tax
expense
|
19,619
|
|
|
85,347
|
|
|
345,727
|
|
|
382,240
|
|
Adjusted
EBITDA
|
$
|
474,751
|
|
|
$
|
396,235
|
|
|
$
|
1,875,775
|
|
|
$
|
1,657,617
|
|
|
(1) Allocation
of share-based payment expense
|
|
For the Three
Months Ended
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in
thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Programming and
content
|
$
|
7,072
|
|
|
$
|
3,080
|
|
|
$
|
21,203
|
|
|
$
|
10,325
|
|
Customer service and
billing
|
1,041
|
|
|
818
|
|
|
3,735
|
|
|
2,982
|
|
Satellite and
transmission
|
1,214
|
|
|
991
|
|
|
4,587
|
|
|
4,147
|
|
Sales and
marketing
|
5,685
|
|
|
4,929
|
|
|
21,294
|
|
|
17,985
|
|
Engineering, design
and development
|
3,728
|
|
|
2,407
|
|
|
13,121
|
|
|
9,470
|
|
General and
administrative
|
11,974
|
|
|
9,751
|
|
|
44,664
|
|
|
39,401
|
|
Total share-based
payment expense
|
$
|
30,714
|
|
|
$
|
21,976
|
|
|
$
|
108,604
|
|
|
$
|
84,310
|
|
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
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in thousands,
except per subscriber amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Subscriber revenue,
excluding connected vehicle services
|
$
|
1,064,109
|
|
|
$
|
973,347
|
|
|
$
|
4,108,547
|
|
|
$
|
3,726,340
|
|
Add: advertising
revenue
|
38,901
|
|
|
33,449
|
|
|
138,231
|
|
|
122,292
|
|
Add: other
subscription-related revenue
|
124,457
|
|
|
111,207
|
|
|
478,063
|
|
|
410,644
|
|
|
$
|
1,227,467
|
|
|
$
|
1,118,003
|
|
|
$
|
4,724,841
|
|
|
$
|
4,259,276
|
|
Daily weighted
average number of subscribers
|
31,100
|
|
|
29,238
|
|
|
30,494
|
|
|
28,337
|
|
ARPU
|
$
|
13.16
|
|
|
$
|
12.75
|
|
|
$
|
12.91
|
|
|
$
|
12.53
|
|
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
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in thousands,
except per subscriber amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Customer service and
billing expenses, excluding connected vehicle services
|
$
|
97,014
|
|
|
$
|
91,686
|
|
|
$
|
367,978
|
|
|
$
|
346,789
|
|
Less: share-based
payment expense
|
(1,041)
|
|
|
(818)
|
|
|
(3,735)
|
|
|
(2,982)
|
|
|
$
|
95,973
|
|
|
$
|
90,868
|
|
|
$
|
364,243
|
|
|
$
|
343,807
|
|
Daily weighted
average number of subscribers
|
31,100
|
|
|
29,238
|
|
|
30,494
|
|
|
28,337
|
|
Customer service and
billing expenses, per average
subscriber
|
$
|
1.03
|
|
|
$
|
1.04
|
|
|
$
|
1.00
|
|
|
$
|
1.01
|
|
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 consolidated statements of cash
flows, adjusted for any significant legal settlements. We
have excluded the $210 million
payment related to the 2015 pre-1972 sound recordings legal
settlement from our free cash flow calculation in the year ended
December 31, 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
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in
thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash Flow
information
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
503,133
|
|
|
$
|
343,097
|
|
|
$
|
1,719,237
|
|
|
$
|
1,244,051
|
|
Net cash used in
investing activities
|
$
|
(73,710)
|
|
|
$
|
(43,949)
|
|
|
$
|
(210,124)
|
|
|
$
|
(138,858)
|
|
Net cash used in
financing activities
|
$
|
(787,866)
|
|
|
$
|
(339,855)
|
|
|
$
|
(1,407,012)
|
|
|
$
|
(1,141,079)
|
|
Free Cash
Flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
503,133
|
|
|
$
|
343,097
|
|
|
$
|
1,719,237
|
|
|
$
|
1,244,051
|
|
Additions to property
and equipment
|
(73,583)
|
|
|
(43,949)
|
|
|
(205,829)
|
|
|
(134,892)
|
|
Purchases of
restricted and other investments
|
(127)
|
|
|
—
|
|
|
(4,295)
|
|
|
(3,966)
|
|
Pre-1972 sound
recordings legal settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
210,000
|
|
Free cash
flow
|
$
|
429,423
|
|
|
$
|
299,148
|
|
|
$
|
1,509,113
|
|
|
$
|
1,315,193
|
|
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
December 31,
|
|
For the Twelve
Months Ended
December 31,
|
(in thousands,
except per installation amounts)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Subscriber
acquisition costs
|
$
|
131,293
|
|
|
$
|
140,826
|
|
|
$
|
512,809
|
|
|
$
|
532,599
|
|
Less: margin from
sales of radios and accessories
|
(20,961)
|
|
|
(17,241)
|
|
|
(78,065)
|
|
|
(68,199)
|
|
|
$
|
110,332
|
|
|
$
|
123,585
|
|
|
$
|
434,744
|
|
|
$
|
464,400
|
|
Installations
|
3,799
|
|
|
3,736
|
|
|
14,203
|
|
|
14,041
|
|
SAC, per
installation
|
$
|
29
|
|
|
$
|
33
|
|
|
$
|
31
|
|
|
$
|
33
|
|
About SiriusXM
Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world's largest
radio company measured by revenue and has more than 31.3 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 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 Traffic™,
SiriusXM Travel Link, NavTraffic®, NavWeather™. SiriusXM delivers
weather, data and information services to aircraft and boats
through SiriusXM Aviation, SiriusXM Marine™, Sirius Marine Weather, XMWX Aviation™, XMWX
Weather, and XMWX Marine™. 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, 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.
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
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/siriusxm-reports-fourth-quarter-and-full-year-2016-results-300400957.html
SOURCE Sirius XM Holdings Inc.