NEW YORK, April 27, 2017 /PRNewswire/ -- SiriusXM today
announced first quarter 2017 operating and financial results,
including record revenue of $1.3
billion, up 8% versus the prior year period.
Net income totaled $207 million in
the first quarter 2017, up 20% from $172
million in the first quarter 2016. Net income per diluted
common share grew 28% to $0.04 in the
first quarter 2017, compared to $0.03
in the first quarter 2016. Adjusted EBITDA grew 14% in the first
quarter 2017 to a quarterly record $502
million, compared to $441
million in the first quarter 2016.
"The year is off to a very solid start for our business, and we
are on track to achieve our guidance for 2017. I'm particularly
proud of the record adjusted EBITDA of more than half a billion
dollars and record adjusted EBITDA margin of 38.7% we recorded in
the first quarter," said Jim Meyer,
Chief Executive Officer, SiriusXM. "We are also pleased to announce
this morning the acquisition of Automatic Labs Inc., an exciting
company focused on innovative products that broaden our array of
connected vehicle services," added Meyer.
"We remain focused on delivering a bundle of compelling, timely
and entertaining programming for subscribers who have come to
expect the best in audio from SiriusXM," said Meyer. "We continue
to air new voices from unique personalities, such as special series
from Brooke Shields, comedic TV star
Jim Parsons, André Leon Talley of Vogue fame, and a new daily show
from Craig Ferguson. In the first
quarter, we again hosted a series of special subscriber-only
events, including a great live performance from Ed Sheeran in New York
City and our special Music Lounge in South Beach Miami
leading up to the Ultra Music Festival," added Meyer.
FIRST QUARTER 2017 HIGHLIGHTS
- SiriusXM Reaches 31.6 Million Subscribers. The company
added 259,000 net new self-pay subscribers in the first quarter
2017 to end with over 26.2 million self-pay subscribers. Total net
additions were 257,000 to end the quarter with approximately 31.6
million subscribers.
- Strong Quarterly Revenue and ARPU. First quarter revenue
climbed 8% to a record $1.3 Billion.
The growth was driven by a 5% increase in subscribers and a 2.3%
increase in average revenue per user (ARPU) to $12.95.
- Record Adjusted EBITDA. Adjusted EBITDA in the first
quarter of 2017 totaled $502 Million,
a record high, and up 14% from $441
Million in the first quarter of 2016. Adjusted EBITDA margin
was a record 38.7% in the first quarter of 2017, a 200 basis point
increase from 36.7% in the first quarter 2016.
- Free Cash Flow of $249
Million. Free cash flow for the first quarter 2017
totaled $249 million, down 24% from
$328 million in the first quarter
2016. The decline in free cash flow was due to payments for
satellites, the effect of the legal settlement associated with
pre-1972 sound recordings and a shift in timing of OEM payments and
interest payments compared to the same period in 2016. Operating
cash flow for the first quarter 2017 totaled $309 million, down 15% from the first quarter
2016. The decrease was primarily due to the shift in timing of OEM
payments and interest payments and the settlement payment related
to pre-1972 sound recordings.
"During the first quarter, we spent approximately $300 million to repurchase 62 million shares of
our common stock. SiriusXM's average share count in the quarter
declined by 6% from the first quarter of 2016 as a result of our
share repurchase program. Additionally, we returned approximately
$47 million in cash to our
stockholders in the form of dividends in the quarter, bringing
total capital returned to stockholders to approximately
$350 million in the first quarter.
Our debt to adjusted EBITDA was just 3.1 times, and we ended the
first quarter with a cash balance of $230
million and undrawn revolver capacity of $1.2 billion," noted David Frear, Chief Financial Officer,
SiriusXM.
"Approximately $160 million of the
company's cash at quarter end was held in Canadian dollars in
anticipation of closing the proposed recapitalization of our
Canadian affiliate, SiriusXM Canada Inc. We expect to continue
delivering strong capital returns to stockholders while at the same
time making investments in technology, the connected car, content
and our satellite infrastructure," added Frear.
2017 GUIDANCE
Our full-year 2017 guidance for net subscribers, revenue,
adjusted EBITDA, and free cash flow, originally issued on
January 5, 2017, remains 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.
FIRST QUARTER 2017 RESULTS
|
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
(UNAUDITED)
|
|
|
|
For the Three
Months Ended March 31,
|
|
(in thousands,
except per share data)
|
2017
|
|
2016
|
|
Revenue:
|
|
|
|
|
Subscriber
revenue
|
$
|
1,078,257
|
|
|
$
|
1,009,682
|
|
|
Advertising
revenue
|
36,016
|
|
|
31,541
|
|
|
Equipment
revenue
|
29,658
|
|
|
27,121
|
|
|
Other
revenue
|
150,135
|
|
|
132,666
|
|
|
Total
revenue
|
1,294,066
|
|
|
1,201,010
|
|
|
Operating
expenses:
|
|
|
|
|
Cost of
services:
|
|
|
|
|
Revenue share and
royalties
|
277,300
|
|
|
251,744
|
|
|
Programming and
content
|
95,544
|
|
|
85,100
|
|
|
Customer service and
billing
|
96,775
|
|
|
96,867
|
|
|
Satellite and
transmission
|
20,576
|
|
|
23,538
|
|
|
Cost of
equipment
|
6,912
|
|
|
9,779
|
|
|
Subscriber
acquisition costs
|
127,488
|
|
|
132,449
|
|
|
Sales and
marketing
|
96,909
|
|
|
88,726
|
|
|
Engineering, design
and development
|
23,817
|
|
|
19,441
|
|
|
General and
administrative
|
78,201
|
|
|
77,505
|
|
|
Depreciation and
amortization
|
76,704
|
|
|
67,627
|
|
|
Total operating
expenses
|
900,226
|
|
|
852,776
|
|
|
Income from
operations
|
393,840
|
|
|
348,234
|
|
|
Other income
(expense):
|
|
|
|
|
Interest
expense
|
(81,657)
|
|
|
(78,400)
|
|
|
Other
income
|
8,863
|
|
|
10,848
|
|
|
Total other
expense
|
(72,794)
|
|
|
(67,552)
|
|
|
Income before income
taxes
|
321,046
|
|
|
280,682
|
|
|
Income tax
expense
|
(113,973)
|
|
|
(108,242)
|
|
|
Net income
|
$
|
207,073
|
|
|
$
|
172,440
|
|
|
Foreign currency
translation adjustment, net of tax
|
(17)
|
|
|
449
|
|
|
Total comprehensive
income
|
$
|
207,056
|
|
|
$
|
172,889
|
|
|
Net income per common
share:
|
|
|
|
|
Basic
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
Diluted
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
Basic
|
4,710,340
|
|
|
5,065,319
|
|
|
Diluted
|
4,784,420
|
|
|
5,110,618
|
|
|
Dividends declared
per common share
|
$
|
0.01
|
|
|
$
|
—
|
|
|
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
(in thousands,
except per share data)
|
March 31,
2017
|
|
December 31,
2016
|
|
ASSETS
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
230,488
|
|
|
$
|
213,939
|
|
|
Receivables,
net
|
234,348
|
|
|
223,029
|
|
|
Inventory,
net
|
16,972
|
|
|
20,363
|
|
|
Related party current
assets
|
6,846
|
|
|
6,170
|
|
|
Prepaid expenses and
other current assets
|
187,078
|
|
|
179,148
|
|
|
Total current
assets
|
675,732
|
|
|
642,649
|
|
|
Property and
equipment, net
|
1,408,152
|
|
|
1,398,693
|
|
|
Intangible assets,
net
|
2,533,273
|
|
|
2,544,801
|
|
|
Goodwill
|
2,205,107
|
|
|
2,205,107
|
|
|
Related party
long-term assets
|
8,114
|
|
|
8,918
|
|
|
Deferred tax
assets
|
976,825
|
|
|
1,084,330
|
|
|
Other long-term
assets
|
124,603
|
|
|
119,097
|
|
|
Total
assets
|
$
|
7,931,806
|
|
|
$
|
8,003,595
|
|
|
LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
630,445
|
|
|
$
|
713,034
|
|
|
Accrued
interest
|
81,887
|
|
|
114,633
|
|
|
Current portion of
deferred revenue
|
1,856,874
|
|
|
1,832,609
|
|
|
Current maturities of
long-term debt
|
4,637
|
|
|
5,485
|
|
|
Related party current
liabilities
|
2,840
|
|
|
2,840
|
|
|
Total current
liabilities
|
2,576,683
|
|
|
2,668,601
|
|
|
Deferred
revenue
|
179,991
|
|
|
176,319
|
|
|
Long-term
debt
|
5,983,213
|
|
|
5,842,764
|
|
|
Related party
long-term liabilities
|
7,245
|
|
|
7,955
|
|
|
Deferred tax
liabilities
|
6,418
|
|
|
6,418
|
|
|
Other long-term
liabilities
|
99,334
|
|
|
93,553
|
|
|
Total
liabilities
|
8,852,884
|
|
|
8,795,610
|
|
|
Stockholders'
(deficit) equity:
|
|
|
|
|
Common stock, par
value $0.001; 9,000,000 shares authorized; 4,686,473 and 4,746,047
shares issued; 4,683,473 and 4,740,947 outstanding at March 31,
2017 and December 31, 2016, respectively
|
4,685
|
|
|
4,745
|
|
|
Accumulated other
comprehensive loss, net of tax
|
(156)
|
|
|
(139)
|
|
|
Additional paid-in
capital
|
2,774,189
|
|
|
3,117,666
|
|
|
Treasury stock, at
cost; 3,000 and 5,100 shares of common stock at March 31, 2017 and
December 31, 2016, respectively
|
(15,488)
|
|
|
(22,906)
|
|
|
Accumulated
deficit
|
(3,684,308)
|
|
|
(3,891,381)
|
|
|
Total stockholders'
(deficit) equity
|
(921,078)
|
|
|
(792,015)
|
|
|
Total liabilities and
stockholders' (deficit) equity
|
$
|
7,931,806
|
|
|
$
|
8,003,595
|
|
|
SIRIUS XM HOLDINGS
INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(UNAUDITED)
|
|
|
|
For the Three
Months Ended March 31,
|
|
(in
thousands)
|
2017
|
|
2016
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
|
207,073
|
|
|
$
|
172,440
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
76,704
|
|
|
67,627
|
|
|
Non-cash interest
expense, net of amortization of premium
|
2,104
|
|
|
2,054
|
|
|
Provision for
doubtful accounts
|
14,044
|
|
|
13,055
|
|
|
Amortization of
deferred income related to equity method investment
|
(694)
|
|
|
(694)
|
|
|
Gain on
unconsolidated entity investments, net
|
(3,014)
|
|
|
(6,274)
|
|
|
Dividend received
from unconsolidated entity investment
|
3,606
|
|
|
3,386
|
|
|
Share-based payment
expense
|
29,446
|
|
|
23,693
|
|
|
Deferred income
taxes
|
107,505
|
|
|
101,980
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Receivables
|
(25,363)
|
|
|
(6,443)
|
|
|
Inventory
|
3,391
|
|
|
540
|
|
|
Related party,
net
|
(503)
|
|
|
(3,310)
|
|
|
Prepaid expenses and
other current assets
|
(7,930)
|
|
|
(18,545)
|
|
|
Other long-term
assets
|
1,691
|
|
|
(956)
|
|
|
Accounts payable and
accrued expenses
|
(99,707)
|
|
|
(18,239)
|
|
|
Accrued
interest
|
(32,746)
|
|
|
(1,773)
|
|
|
Deferred
revenue
|
27,937
|
|
|
30,473
|
|
|
Other long-term
liabilities
|
5,781
|
|
|
3,172
|
|
|
Net cash provided by
operating activities
|
309,325
|
|
|
362,186
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Additions to property
and equipment
|
(53,365)
|
|
|
(30,171)
|
|
|
Purchases of
restricted and other investments
|
(7,021)
|
|
|
(3,798)
|
|
|
Net cash used in
investing activities
|
(60,386)
|
|
|
(33,969)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Taxes paid in lieu of
shares issued for stock-based compensation
|
(15,609)
|
|
|
(1,354)
|
|
|
Net proceeds from
revolving credit facility
|
140,000
|
|
|
260,000
|
|
|
Principal payments of
long-term borrowings
|
(3,669)
|
|
|
(2,299)
|
|
|
Common stock
repurchased and retired
|
(305,975)
|
|
|
(594,450)
|
|
|
Dividends
paid
|
(47,137)
|
|
|
—
|
|
|
Net cash used in
financing activities
|
(232,390)
|
|
|
(338,103)
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
16,549
|
|
|
(9,886)
|
|
|
Cash and cash
equivalents at beginning of period
|
213,939
|
|
|
111,838
|
|
|
Cash and cash
equivalents at end of period
|
$
|
230,488
|
|
|
$
|
101,952
|
|
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 March 31,
2017 compared to March 31, 2016:
|
As of March
31,
|
|
2017 vs 2016
Change
|
|
(in
thousands)
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
Self-pay
subscribers
|
26,210
|
|
|
24,636
|
|
|
1,574
|
|
|
6
|
%
|
|
Paid promotional
subscribers
|
5,393
|
|
|
5,423
|
|
|
(30)
|
|
|
(1)
|
%
|
|
Ending subscribers
(a)
|
31,602
|
|
|
30,059
|
|
|
1,543
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table contains our Non-GAAP financial and
operating performance measures which are based on our adjusted
results of operations for the three months ended March 31,
2017 and 2016:
|
(in thousands,
except per subscriber and per installation
amounts)
|
For the Three
Months Ended March 31,
|
|
2017 vs 2016
Change
|
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|
Self-pay
subscribers
|
259
|
|
|
348
|
|
|
(89)
|
|
|
(26)
|
%
|
|
Paid promotional
subscribers
|
(3)
|
|
|
117
|
|
|
(120)
|
|
|
(103)
|
%
|
|
Net additions
(a)
|
257
|
|
|
465
|
|
|
(208)
|
|
|
(45)
|
%
|
|
Daily weighted
average number of subscribers
|
31,369
|
|
|
29,767
|
|
|
1,602
|
|
|
5
|
%
|
|
Average self-pay
monthly churn
|
1.8
|
%
|
|
1.9
|
%
|
|
(0.1)
|
%
|
|
(5)
|
%
|
|
New vehicle consumer
conversion rate
|
40
|
%
|
|
38
|
%
|
|
2
|
%
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
ARPU
|
$
|
12.95
|
|
|
$
|
12.66
|
|
|
$
|
0.29
|
|
|
2
|
%
|
|
SAC, per
installation
|
$
|
29
|
|
|
$
|
34
|
|
|
$
|
(5)
|
|
|
(15)
|
%
|
|
Customer service and
billing expenses, per average subscriber
|
$
|
0.97
|
|
|
$
|
1.01
|
|
|
$
|
(0.04)
|
|
|
(4)
|
%
|
|
Adjusted
EBITDA
|
$
|
501,803
|
|
|
$
|
441,367
|
|
|
$
|
60,436
|
|
|
14
|
%
|
|
Free cash
flow
|
$
|
248,939
|
|
|
$
|
328,217
|
|
|
$
|
(79,278)
|
|
|
(24)
|
%
|
|
Diluted weighted
average common shares outstanding (GAAP)
|
4,784,420
|
|
|
5,110,618
|
|
|
(326,198)
|
|
|
(6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, to the extent they
occur during the period, 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 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 March 31,
|
|
(in
thousands)
|
2017
|
|
2016
|
|
Net
income:
|
$
|
207,073
|
|
|
$
|
172,440
|
|
|
Add back items
excluded from Adjusted EBITDA:
|
|
|
|
|
Purchase price
accounting adjustments:
|
|
|
|
|
Revenues
|
1,813
|
|
|
1,813
|
|
|
Share-based payment
expense (1)
|
29,446
|
|
|
23,693
|
|
|
Depreciation and
amortization
|
76,704
|
|
|
67,627
|
|
|
Interest
expense
|
81,657
|
|
|
78,400
|
|
|
Other
income
|
(8,863)
|
|
|
(10,848)
|
|
|
Income tax
expense
|
113,973
|
|
|
108,242
|
|
|
Adjusted
EBITDA
|
$
|
501,803
|
|
|
$
|
441,367
|
|
|
|
|
|
|
|
|
|
|
(1) Allocation
of share-based payment expense
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended March 31,
|
|
(in
thousands)
|
2017
|
|
2016
|
|
Programming and
content
|
$
|
6,501
|
|
|
$
|
4,494
|
|
|
Customer service and
billing
|
1,011
|
|
|
806
|
|
|
Satellite and
transmission
|
1,187
|
|
|
1,017
|
|
|
Sales and
marketing
|
5,680
|
|
|
4,812
|
|
|
Engineering, design
and development
|
3,554
|
|
|
2,868
|
|
|
General and
administrative
|
11,513
|
|
|
9,696
|
|
|
Total share-based
payment expense
|
$
|
29,446
|
|
|
$
|
23,693
|
|
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 March 31,
|
|
(in thousands,
except per subscriber amounts)
|
2017
|
|
2016
|
|
Subscriber revenue,
excluding connected vehicle services
|
$
|
1,058,054
|
|
|
$
|
984,984
|
|
|
Add: advertising
revenue
|
36,016
|
|
|
31,541
|
|
|
Add: other
subscription-related revenue
|
124,468
|
|
|
114,071
|
|
|
$
|
1,218,538
|
|
|
$
|
1,130,596
|
|
|
Daily weighted
average number of subscribers
|
31,369
|
|
|
29,767
|
|
|
ARPU
|
$
|
12.95
|
|
|
$
|
12.66
|
|
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 March 31,
|
|
(in thousands,
except per subscriber amounts)
|
2017
|
|
2016
|
|
Customer service and
billing expenses, excluding connected vehicle services
|
$
|
92,120
|
|
|
$
|
91,171
|
|
|
Less: share-based
payment expense
|
(1,011)
|
|
|
(806)
|
|
|
$
|
91,109
|
|
|
$
|
90,365
|
|
|
Daily weighted
average number of subscribers
|
31,369
|
|
|
29,767
|
|
|
Customer service and
billing expenses, per average subscriber
|
$
|
0.97
|
|
|
$
|
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. 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 March 31,
|
|
(in
thousands)
|
2017
|
|
2016
|
|
Cash Flow
information
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
309,325
|
|
|
$
|
362,186
|
|
|
Net cash used in
investing activities
|
$
|
(60,386)
|
|
|
$
|
(33,969)
|
|
|
Net cash used in
financing activities
|
$
|
(232,390)
|
|
|
$
|
(338,103)
|
|
|
Free Cash
Flow
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
309,325
|
|
|
$
|
362,186
|
|
|
Additions to property
and equipment
|
(53,365)
|
|
|
(30,171)
|
|
|
Purchases of
restricted and other investments
|
(7,021)
|
|
|
(3,798)
|
|
|
Free cash
flow
|
$
|
248,939
|
|
|
$
|
328,217
|
|
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 March 31,
|
|
(in thousands,
except per installation amounts)
|
2017
|
|
2016
|
|
Subscriber
acquisition costs
|
$
|
127,488
|
|
|
$
|
132,449
|
|
|
Less: margin from
sales of radios and accessories
|
(22,746)
|
|
|
(17,342)
|
|
|
$
|
104,742
|
|
|
$
|
115,107
|
|
|
Installations
|
3,584
|
|
|
3,430
|
|
|
SAC, per
installation
|
$
|
29
|
|
|
$
|
34
|
|
About SiriusXM
Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world's largest
radio company measured by revenue and has approximately 31.6
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™ and SiriusXM 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. 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; interference to our service from
wireless operations; consumer protection laws and their
enforcement; unfavorable outcomes 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; 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; impairment of
our business by third-party intellectual property rights; and
changes to our dividend policies which could occur at any time.
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, 2016, 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-first-quarter-2017-results-300446761.html
SOURCE Sirius XM Holdings Inc.