Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 23, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SIRIUS XM HOLDINGS INC. | |
Entity Central Index Key | 908,937 | |
Trading Symbol | SIRI | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 4,488,104,672 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue: | ||||
Total revenue | $ 1,432,299 | $ 1,347,569 | $ 2,807,401 | $ 2,641,635 |
Cost of services: | ||||
Subscriber acquisition costs | 119,778 | 125,154 | 242,471 | 252,642 |
Sales and marketing | 119,435 | 106,707 | 226,146 | 203,616 |
Engineering, design and development | 27,485 | 27,783 | 58,122 | 51,600 |
General and administrative | 92,683 | 84,607 | 177,289 | 162,808 |
Depreciation and amortization | 74,623 | 73,519 | 146,835 | 150,223 |
Total operating expenses | 1,070,672 | 931,216 | 2,022,183 | 1,831,442 |
Income from operations | 361,627 | 416,353 | 785,218 | 810,193 |
Other income (expense): | ||||
Interest expense | (86,917) | (82,794) | (176,706) | (164,451) |
Other income (expense) | 88,212 | (11,937) | 124,100 | (3,074) |
Total other income (expense) | 1,295 | (94,731) | (52,606) | (167,525) |
Income before income taxes | 362,922 | 321,622 | 732,612 | 642,668 |
Income tax expense | (70,570) | (119,513) | (150,819) | (233,486) |
Net income | 292,352 | 202,109 | 581,793 | 409,182 |
Foreign currency translation adjustment, net of tax | (8,242) | 2,763 | (17,826) | 2,746 |
Total comprehensive income | $ 284,110 | $ 204,872 | $ 563,967 | $ 411,928 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.04 | $ 0.13 | $ 0.09 |
Diluted (in dollars per share) | $ 0.06 | $ 0.04 | $ 0.13 | $ 0.09 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 4,481,930 | 4,652,426 | 4,486,620 | 4,681,223 |
Diluted (in shares) | 4,589,095 | 4,735,592 | 4,588,986 | 4,759,741 |
Dividends declared per common share (in dollars per share) | $ 0.011 | $ 0.010 | $ 0.022 | $ 0.02 |
Subscriber revenue | ||||
Revenue: | ||||
Total revenue | $ 1,138,962 | $ 1,111,011 | $ 2,256,046 | $ 2,189,268 |
Advertising revenue | ||||
Revenue: | ||||
Total revenue | 47,242 | 40,178 | 89,290 | 76,194 |
Equipment | ||||
Revenue: | ||||
Total revenue | 36,840 | 29,674 | 71,929 | 59,332 |
Cost of services: | ||||
Cost of services | 7,674 | 9,371 | 14,771 | 16,283 |
Music royalty fee and other revenue | ||||
Revenue: | ||||
Total revenue | 209,255 | 166,706 | 390,136 | 316,841 |
Revenue share and royalties | ||||
Cost of services: | ||||
Cost of services | 404,284 | 292,893 | 714,416 | 570,193 |
Programming and content | ||||
Cost of services: | ||||
Cost of services | 105,650 | 96,255 | 206,486 | 191,799 |
Customer service and billing | ||||
Cost of services: | ||||
Cost of services | 95,582 | 95,324 | 189,447 | 192,099 |
Satellite and transmission | ||||
Cost of services: | ||||
Cost of services | $ 23,478 | $ 19,603 | $ 46,200 | $ 40,179 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 63,516 | $ 69,022 |
Receivables, net | 247,148 | 241,727 |
Inventory, net | 18,967 | 20,199 |
Related party current assets | 13,692 | 10,284 |
Prepaid expenses and other current assets | 138,015 | 129,669 |
Total current assets | 481,338 | 470,901 |
Property and equipment, net | 1,468,930 | 1,462,766 |
Intangible assets, net | 2,511,121 | 2,522,846 |
Goodwill | 2,286,582 | 2,286,582 |
Related party long-term assets | 1,051,337 | 962,080 |
Deferred tax assets | 371,303 | 505,528 |
Other long-term assets | 128,543 | 118,671 |
Total assets | 8,299,154 | 8,329,374 |
Current liabilities: | ||
Accounts payable and accrued expenses | 871,373 | 794,341 |
Accrued interest | 128,029 | 137,428 |
Current portion of deferred revenue | 1,935,326 | 1,881,825 |
Current maturities of long-term debt | 4,660 | 5,105 |
Related party current liabilities | 4,103 | 2,839 |
Total current liabilities | 2,943,491 | 2,821,538 |
Deferred revenue | 160,286 | 174,579 |
Long-term debt | 6,443,289 | 6,741,243 |
Related party long-term liabilities | 6,269 | 7,364 |
Deferred tax liabilities | 8,169 | 8,169 |
Other long-term liabilities | 108,218 | 100,355 |
Total liabilities | 9,669,722 | 9,853,248 |
Commitments and contingencies (Note 14) | ||
Stockholders’ (deficit) equity: | ||
Common stock, par value $0.001; 9,000,000 shares authorized; 4,485,774 and 4,530,928 shares issued; 4,485,774 and 4,527,742 outstanding at June 30, 2018 and December 31, 2017, respectively | 4,485 | 4,530 |
Accumulated other comprehensive income, net of tax | 4,594 | 18,407 |
Additional paid-in capital | 1,267,630 | 1,713,816 |
Treasury stock, at cost; zero and 3,186 shares of common stock at June 30, 2018 and December 31, 2017, respectively | 0 | (17,154) |
Accumulated deficit | (2,647,277) | (3,243,473) |
Total stockholders’ (deficit) equity | (1,370,568) | (1,523,874) |
Total liabilities and stockholders’ (deficit) equity | $ 8,299,154 | $ 8,329,374 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 9,000,000,000 | 9,000,000,000 |
Common stock, shares issued (in shares) | 4,485,774,000 | 4,530,928,000 |
Common stock, shares outstanding (in shares) | 4,485,774,000 | 4,527,742,000 |
Treasury stock (in shares) | 0 | 3,186,000 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' (Deficit) Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Other Comprehensive Income (Loss) | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of change in accounting principles | $ 18,416 | $ 4,013 | $ 14,403 | |||
Beginning balance (in shares) at Dec. 31, 2017 | 4,530,928 | 3,186 | ||||
Beginning balance at Dec. 31, 2017 | (1,523,874) | $ 4,530 | 18,407 | $ 1,713,816 | $ (17,154) | (3,243,473) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income, net of tax | 563,967 | (17,826) | 581,793 | |||
Share-based payment expense | 58,208 | 58,208 | ||||
Exercise of options and vesting of restricted stock units (in shares) | 13,875 | |||||
Exercise of options and vesting of restricted stock units | 0 | $ 14 | (14) | |||
Minimum withholding taxes on net share settlement of stock-based compensation | (71,540) | (71,540) | ||||
Cash dividends paid on common stock | (98,684) | (98,684) | ||||
Common stock repurchased (in shares) | 55,843 | |||||
Common stock repurchased | (317,061) | $ (317,061) | ||||
Common stock retired (in shares) | (59,029) | (59,029) | ||||
Common stock retired | 0 | $ (59) | (334,156) | $ 334,215 | ||
Ending balance (in shares) at Jun. 30, 2018 | 4,485,774 | 0 | ||||
Ending balance at Jun. 30, 2018 | $ (1,370,568) | $ 4,485 | $ 4,594 | $ 1,267,630 | $ 0 | $ (2,647,277) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Cash flows from operating activities: | |||
Net income | $ 581,793 | $ 409,182 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 146,835 | 150,223 | |
Non-cash interest expense, net of amortization of premium | 4,713 | 4,231 | |
Provision for doubtful accounts | 23,944 | 27,377 | |
Amortization of deferred income related to equity method investment | (1,388) | (1,388) | |
Loss on unconsolidated entity investments, net | 64 | 2,183 | |
Gain on fair value instrument | (117,449) | 0 | |
Dividend received from unconsolidated entity investment | 1,366 | 3,606 | |
Share-based payment expense | 70,448 | 59,697 | |
Deferred income taxes | 134,044 | 220,415 | |
Changes in operating assets and liabilities: | |||
Receivables | (29,364) | (38,063) | |
Inventory | 1,232 | 2,492 | |
Related party, net | (1,722) | (5,756) | |
Prepaid expenses and other current assets | (177) | (6,617) | |
Other long-term assets | 8,356 | 5,937 | |
Accounts payable and accrued expenses | 87,857 | (69,078) | |
Accrued interest | (9,399) | (7,042) | |
Deferred revenue | 85,100 | 30,779 | |
Other long-term liabilities | 7,863 | 4,358 | |
Net cash provided by operating activities | 994,116 | 792,536 | |
Cash flows from investing activities: | |||
Additions to property and equipment | (174,273) | (119,517) | |
Purchases of other investments | (7,138) | (7,355) | |
Acquisition of business, net of cash acquired | 0 | (107,056) | |
Investments in related parties and other equity investees | (6,138) | (302,526) | |
Repayment from (loan to) related party | 3,242 | ||
Repayment from (loan to) related party | (130,794) | ||
Net cash used in investing activities | (184,307) | (667,248) | |
Cash flows from financing activities: | |||
Taxes paid in lieu of shares issued for stock-based compensation | (71,501) | (22,595) | |
Revolving credit facility, net of deferred financing costs | (302,611) | 610,000 | |
Principal payments of long-term borrowings | (7,717) | (6,000) | |
Common stock repurchased and retired | (334,215) | (783,824) | |
Dividends paid | (98,684) | (93,638) | |
Net cash used in financing activities | (814,728) | (296,057) | |
Net decrease in cash, cash equivalents and restricted cash | (4,919) | (170,769) | |
Cash, cash equivalents and restricted cash at beginning of period | 79,374 | 223,828 | |
Cash, cash equivalents and restricted cash at end of period | [1] | 74,455 | 53,059 |
Cash paid during the period for: | |||
Interest, net of amounts capitalized | 178,850 | 164,147 | |
Income taxes paid | 5,625 | 12,264 | |
Non-cash investing and financing activities: | |||
Capital lease obligations incurred to acquire assets | 499 | 0 | |
Change in treasury stock not yet settled | 17,154 | 8,123 | |
Other comprehensive loss (income), net of tax benefit | 17,826 | (2,746) | |
Issuance of common stock as part of recapitalization of Sirius XM Canada | $ 0 | $ 178,850 | |
[1] | The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet. The restricted cash balances are primarily due to letters of credit which have been issued to the landlords of leased office space. The terms of the letters of credit primarily extend beyond one year. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016Cash and cash equivalents$63,516 $69,022 $42,738 $213,939Restricted cash included in Prepaid expenses and other current assets150 244 432 —Restricted cash included in Other long-term assets10,789 10,108 9,889 9,889Total cash, cash equivalents and restricted cash at end of period$74,455 $79,374 $53,059 $223,828 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | ||
Statement of Cash Flows [Abstract] | ||||||
Cash and cash equivalents | $ 63,516 | $ 69,022 | $ 42,738 | $ 213,939 | ||
Restricted cash included in Prepaid expenses and other current assets | 150 | 244 | 432 | 0 | ||
Restricted cash included in Other long-term assets | 10,789 | 10,108 | 9,889 | 9,889 | ||
Cash, cash equivalents and restricted cash at end of period | $ 74,455 | [1] | $ 79,374 | $ 53,059 | [1] | $ 223,828 |
[1] | The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet. The restricted cash balances are primarily due to letters of credit which have been issued to the landlords of leased office space. The terms of the letters of credit primarily extend beyond one year. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016Cash and cash equivalents$63,516 $69,022 $42,738 $213,939Restricted cash included in Prepaid expenses and other current assets150 244 432 —Restricted cash included in Other long-term assets10,789 10,108 9,889 9,889Total cash, cash equivalents and restricted cash at end of period$74,455 $79,374 $53,059 $223,828 |
Business & Basis of Presentatio
Business & Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business & Basis of Presentation | Business & Basis of Presentation This Quarterly Report on Form 10-Q presents information for Sirius XM Holdings Inc. (“Holdings”). The terms “Holdings,” “we,” “us,” “our,” and “our company” as used herein, and unless otherwise stated or indicated by context, refer to Sirius XM Holdings Inc. and its subsidiaries, and “Sirius XM” refers to our wholly-owned subsidiary Sirius XM Radio Inc. Holdings has no operations independent of its wholly-owned subsidiary, Sirius XM. Business We transmit music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through our two proprietary satellite radio systems. Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand, over our Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment. We also provide connected vehicle services. Our connected vehicle services are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers. We have agreements with every major automaker (“OEMs”) to offer satellite radio in their vehicles, through which we acquire the majority of our subscribers. We also acquire subscribers through marketing to owners and lessees of previously owned vehicles that include factory-installed satellite radios that are not currently subscribing to our services. Our satellite radios are primarily distributed through automakers, retailers, and our website. Satellite radio services are also offered to customers of certain rental car companies. Our primary source of revenue is subscription fees, with most of our customers subscribing to annual, semi-annual, quarterly or monthly plans. We offer discounts for prepaid, longer-term subscription plans, as well as a multiple subscription discount. We also derive revenue from activation and other fees, the sale of advertising on select non-music channels, the direct sale of satellite radios and accessories, and other ancillary services, such as our weather, traffic and data services. In many cases, a subscription to our radio services is included with the purchase of new or previously owned vehicles. The length of these subscriptions varies but is typically three to twelve months . We receive payments for these subscriptions from certain automakers. We also reimburse various automakers for certain costs associated with satellite radios installed in new vehicles and pay revenue share to various automakers. As of June 30, 2018 , Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, approximately 70% of the outstanding shares of our common stock. As a result, we are a “controlled company” for the purposes of the NASDAQ corporate governance requirements. Basis of Presentation The accompanying unaudited consolidated financial statements of Holdings and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation. All significant intercompany transactions have been eliminated in consolidation. In the opinion of our management, all normal recurring adjustments necessary for a fair presentation of our unaudited consolidated financial statements as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 have been made. Interim results are not necessarily indicative of the results that may be expected for a full year. This Quarterly Report on Form 10-Q should be read together with our Annual Report on Form 10-K for the year ended December 31, 2017 , which was filed with the SEC on January 31, 2018. Public companies are required to disclose certain information about their reportable operating segments. Operating segments are defined as significant components of an enterprise for which separate financial information is available and is evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We have determined that we have one reportable segment as our chief operating decision maker, our Chief Executive Officer, assesses performance and allocates resources based on the consolidated results of operations of our business. We have evaluated events subsequent to the balance sheet date and prior to the filing of this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2018 and have determined that no events have occurred that would require adjustment to our unaudited consolidated financial statements. For a discussion of subsequent events that do not require adjustment to our unaudited consolidated financial statements refer to Note 16. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Estimates, by their nature, are based on judgment and available information. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the accompanying unaudited consolidated financial statements include asset impairment, depreciable lives of our satellites, share-based payment expense, and income taxes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Fair Value Measurements For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are based on unadjusted quoted prices in active markets for identical instruments. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. As of June 30, 2018 and December 31, 2017 , the carrying amounts of cash and cash equivalents, receivables, and accounts payable approximated fair value due to the short-term nature of these instruments. Our assets and liabilities measured at fair value were as follows: June 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Fair Level 1 Level 2 Level 3 Total Fair Assets: Pandora Media, Inc. (“Pandora”) - investment (a) — $ 597,921 — $ 597,921 — $ 480,472 — $ 480,472 Liabilities: Debt (b) — $ 6,342,699 — $ 6,342,699 — $ 6,987,473 — $ 6,987,473 (a) During the year ended December 31, 2017, Sirius XM completed a $480,000 investment in Pandora. We have elected the fair value option to account for this investment. Refer to Note 10 for information on this transaction. (b) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 11 for information related to the carrying value of our debt as of June 30, 2018 and December 31, 2017 . Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income of $4,594 was primarily comprised of the cumulative foreign currency translation adjustments related to our investment in and loan to Sirius XM Canada Holdings Inc. (“Sirius XM Canada”) (refer to Note 10 for additional information). During the three and six months ended June 30, 2018 , we recorded a foreign currency translation adjustment loss of $8,242 and $17,826 net of tax of $2,663 and $5,735 , respectively. In addition, we reclassified stranded tax effects of $4,013 related to the adoption of Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, during the six months ended June 30, 2018 . Recent Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We are in the process of evaluating the impact of adoption of this ASU on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The FASB recently issued an exposure draft amending certain aspects of the new leasing standard. The proposed amendment allows adoption of the standard as of the effective date without restating prior periods. We plan to adopt this ASU on January 1, 2019. We expect the adoption of ASU 2016-02 will result in the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for operating leases. Recently Adopted Accounting Policies ASU 2014-09, Revenue - Revenue from Contracts with Customers . In May 2014, the FASB issued ASU 2014-09 which requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09, and all related amendments, which established ASC Topic 606 (the "new revenue standard"), effective as of January 1, 2018. We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The new revenue standard primarily impacts how we account for revenue share payments and also has other immaterial impacts. Revenue Share - Paid Trials We previously recorded revenue share related to paid trials as Revenue share and royalties expense. Under the new revenue standard, we have recorded these revenue share payments as a reduction to revenue as the payments do not transfer a distinct good or service to us. Prior to the adoption, we recognized revenue share related to paid trial subscriptions as the Current portion of deferred revenue. Under the new revenue standard, we reclassified the revenue share related to paid trial subscriptions existing as of the date of adoption from Current portion of deferred revenue to Accounts payable and accrued expenses. For new paid trial subscriptions, the net amount of the paid trial subscription will be recorded as deferred revenue and the portion of revenue share will be recorded to Accounts payable and accrued expenses. Other Impacts Other impacts of the new revenue standard include: • Activation fees were previously recognized over the expected subscriber life using the straight-line method. Under the new revenue standard, the activation fees have been recognized over a one month period from activation as the activation fees are non-refundable and they do not convey a material right. As of January 1, 2018, we reduced deferred revenue related to activation fees of $8,260 , net of tax, to Accumulated deficit. • Loyalty payments to OEMs were previously expensed when incurred as Subscriber acquisition costs. Under the new revenue standard, these costs have been capitalized in Prepaid expenses and other current assets as costs to obtain a contract and these costs will be amortized to Subscriber acquisition costs over an average self-pay subscriber life of that OEM. As of January 1, 2018, we capitalized previously expensed loyalty payments of $10,156 , net of tax, to Prepaid expenses and other current assets by reducing Accumulated deficit. These changes do not have a material impact to our financial statements. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02 to amend its standard on comprehensive income to provide an option for an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) that was passed in December 2017 from accumulated other comprehensive income (“AOCI”) directly to retained earnings. The stranded tax effects result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal years beginning after December 15, 2018, with early adoption permitted. We elected to adopt ASU 2018-02 effective January 1, 2018 and reclassified the stranded tax effects due to the Tax Act of $4,013 related to the currency translation adjustment from our investment balance and note receivable with Sirius XM Canada from AOCI to Accumulated deficit. The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09 and ASU 2018-02 are included in the table below. Balance at Adjustments Due to ASU 2014-09 Adjustments Due to ASU 2018-02 Balance at January 1, 2018 Balance Sheet Assets Prepaid expenses and other current assets $ 129,669 $ 8,262 $ — $ 137,931 Other long-term assets 118,671 2,576 — 121,247 Deferred tax assets 505,528 (5,915 ) — 499,613 Liabilities: Accounts payable and accrued expenses 794,341 32,399 — 826,740 Current portion of deferred revenue 1,881,825 (41,902 ) — 1,839,923 Deferred revenue 174,579 (3,990 ) — 170,589 Equity: Accumulated deficit (3,243,473 ) 18,416 (4,013 ) (3,229,070 ) AOCI, net of tax 18,407 — 4,013 22,420 The following table illustrates the impact of adopting ASU 2014-09 on our unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income. For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 As Reported Impact of Adopting ASU 2014-09 Balances Without Adoption of ASU 2014-09 As Reported Impact of Adopting ASU 2014-09 Balances Without Adoption of ASU 2014-09 Income Statement Revenues Subscriber revenue $ 1,138,962 $ 23,787 $ 1,162,749 $ 2,256,046 $ 48,179 $ 2,304,225 Expenses Revenue share and royalties 404,284 22,235 426,519 714,416 44,304 758,720 Subscriber acquisition costs 119,778 800 120,578 242,471 1,845 244,316 Income tax expense (70,570 ) (146 ) (70,716 ) (150,819 ) (418 ) (151,237 ) Net Income $ 292,352 $ 606 $ 292,958 $ 581,793 $ 1,612 $ 583,405 The adoption of the new revenue standard did not have a material impact on our unaudited consolidated balance sheet as of June 30, 2018 . ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This ASU updates the guidance related to the statement of cash flows and requires that the statement include restricted cash with cash and cash equivalents when reconciling beginning and ending cash. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We adopted this ASU effective January 1, 2018. As a result of the adoption, we have added restricted cash to the reconciliation of beginning and ending cash and cash equivalents and included a reconciliation of total cash, cash equivalents and restricted cash to the balance sheet for each period presented in the unaudited consolidated statements of cash flows. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Adoption of the new revenue standard We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605. Disaggregation of Revenue We disaggregate our revenues as shown in the unaudited consolidated statements of comprehensive income. Nature of goods and services The following is a description of principal activities from which we generate our revenue, including from subscribers, advertising, and sales of equipment. Subscription Revenue Subscription revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio typically receive between a three and twelve month subscription to our service. In certain cases, the subscription fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from certain automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale and activation. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the OEM when we receive a certain amount of payments from self-pay customers acquired from that OEM. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life of that OEM. Revenue share and loyalty fees paid to the OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service. Advertising Revenue We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue. Additionally, we pay certain third parties a percentage of advertising revenue. Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service. Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted. Equipment Revenue Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon shipment. Revenue is recognized net of discounts and rebates. Music Royalty Fee and Other Revenue Music Royalty Fee and Other Revenue primarily consists of U.S. music royalty fees ("MRF"). The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense. Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the subscription services which are continuously delivered to our customers. Deferred Revenue Customers generally pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our unaudited consolidated statement of comprehensive income as the services are provided. Changes in the liability balance during the period ended June 30, 2018 was not materially impacted by other factors. Transaction Price Allocated to the Remaining Performance Obligations As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. As of June 30, 2018, less than ten percent of our total deferred revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance. These amounts will be recognized on a straight-line basis as our services are provided. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic net income per common share is calculated by dividing the income available to common stockholders by the weighted average common shares outstanding during each reporting period. Diluted net income per common share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. We had no participating securities during the three and six months ended June 30, 2018 and 2017 . Common stock equivalents of 24,191 and 35,468 for the three months ended June 30, 2018 and 2017 , respectively, and 45,032 and 35,447 for the six months ended June 30, 2018 and 2017 , respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive. For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income available to common stockholders for basic and diluted net income per common share $ 292,352 $ 202,109 $ 581,793 $ 409,182 Denominator: Weighted average common shares outstanding for basic net income per common share 4,481,930 4,652,426 4,486,620 4,681,223 Weighted average impact of dilutive equity instruments 107,165 83,166 102,366 78,518 Weighted average shares for diluted net income per common share 4,589,095 4,735,592 4,588,986 4,759,741 Net income per common share: Basic $ 0.07 $ 0.04 $ 0.13 $ 0.09 Diluted $ 0.06 $ 0.04 $ 0.13 $ 0.09 |
Receivables, net
Receivables, net | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Receivables, net | Receivables, net Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables. Customer accounts receivable, net, includes receivables from our subscribers and other customers, including advertising, and is stated at amounts due, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is based upon our assessment of various factors. We consider historical experience, the age of the receivable balances, current economic conditions and other factors that may affect the counterparty’s ability to pay. Bad debt expense is included in Customer service and billing expense in our unaudited consolidated statements of comprehensive income. Receivables from distributors primarily include billed and unbilled amounts due from OEMs for services included in the sale or lease price of vehicles, as well as billed amounts due from wholesale distributors of our satellite radios. Other receivables primarily include amounts due from manufacturers of our radios, modules and chipsets where we are entitled to subsidies and royalties based on the number of units produced. We have not established an allowance for doubtful accounts for our receivables from distributors or other receivables as we have historically not experienced any significant collection issues with OEMs or other third parties. Receivables, net, consists of the following: June 30, 2018 December 31, 2017 Gross customer accounts receivable $ 105,764 $ 100,342 Allowance for doubtful accounts (8,302 ) (9,500 ) Customer accounts receivable, net $ 97,462 $ 90,842 Receivables from distributors 121,407 121,410 Other receivables 28,279 29,475 Total receivables, net $ 247,148 $ 241,727 |
Inventory, net
Inventory, net | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory, net | Inventory, net Inventory consists of finished goods, refurbished goods, chipsets and other raw material components used in manufacturing radios and connected vehicle devices. Inventory is stated at the lower of cost or market. We record an estimated allowance for inventory that is considered slow moving or obsolete or whose carrying value is in excess of net realizable value. The provision related to products purchased for resale in our direct to consumer distribution channel and components held for resale by us is reported as a component of Cost of equipment in our unaudited consolidated statements of comprehensive income. The provision related to inventory consumed in our OEM channel is reported as a component of Subscriber acquisition costs in our unaudited consolidated statements of comprehensive income. Inventory, net, consists of the following: June 30, 2018 December 31, 2017 Raw materials $ 5,615 $ 6,489 Finished goods 18,915 21,225 Allowance for obsolescence (5,563 ) (7,515 ) Total inventory, net $ 18,967 $ 20,199 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Our annual impairment assessment of our single reporting unit is performed as of the fourth quarter of each year, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ASC 350, Intangibles - Goodwill and Other , states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASC 350 also states that a reporting unit with a zero or negative carrying amount is not required to perform a qualitative assessment. The carrying amount recorded for our one reporting unit and goodwill was $(1,370,568) and $2,286,582 , respectively, as of June 30, 2018 . As of June 30, 2018 , there were no indicators of impairment, and no impairment losses were recorded for goodwill during the three and six months ended June 30, 2018 and 2017 . As of June 30, 2018 , the cumulative balance of goodwill impairments recorded since the July 2008 merger (the “Merger”) between our wholly owned subsidiary, Vernon Merger Corporation, and XM Satellite Radio Holdings Inc. (“XM”), was $4,766,190 , which was recognized during the year ended December 31, 2008. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Our intangible assets include the following: June 30, 2018 December 31, 2017 Weighted Gross Accumulated Amortization Net Carrying Gross Accumulated Amortization Net Carrying Indefinite life intangible assets: FCC licenses Indefinite $ 2,083,654 $ — $ 2,083,654 $ 2,083,654 $ — $ 2,083,654 Trademarks Indefinite 250,800 — 250,800 250,800 — 250,800 Definite life intangible assets: Subscriber relationships 9 years — — — 380,000 (380,000 ) — OEM relationships 15 years 220,000 (68,444 ) 151,556 220,000 (61,111 ) 158,889 Licensing agreements 12 years 45,289 (36,193 ) 9,096 45,289 (34,350 ) 10,939 Software and technology 7 years 33,872 (17,857 ) 16,015 43,915 (25,351 ) 18,564 Total intangible assets $ 2,633,615 $ (122,494 ) $ 2,511,121 $ 3,023,658 $ (500,812 ) $ 2,522,846 Indefinite Life Intangible Assets We have identified our FCC licenses and the XM and Automatic Labs Inc. trademarks as indefinite life intangible assets after considering the expected use of the assets, the regulatory and economic environment within which they are used and the effects of obsolescence on their use. We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary services. The following table outlines the years in which each of our satellite licenses expires: FCC satellite licenses Expiration year SIRIUS FM-5 2025 SIRIUS FM-6 2022 XM-3 2021 XM-4 2022 XM-5 2018 Prior to expiration, we are required to apply for a renewal of our FCC licenses. The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred. Each of the FCC licenses authorizes us to use the radio spectrum, which is a renewable, reusable resource that does not deplete or exhaust over time. Our annual impairment assessment of our identifiable indefinite life intangible assets is performed as of the fourth quarter of each year. An assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. If the carrying value of the intangible assets exceeds its fair value, an impairment loss is recognized. As of June 30, 2018 , there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three and six months ended June 30, 2018 and 2017 . Definite Life Intangible Assets Amortization expense for all definite life intangible assets was $5,863 and $12,098 for the three months ended June 30, 2018 and 2017 , respectively, and $11,725 and $23,626 for the six months ended June 30, 2018 and 2017 , respectively. We retired definite lived intangible assets of $390,043 during the six months ended June 30, 2018 primarily related to fully amortized subscriber relationships. There were no retirements of definite lived intangible assets during the six months ended June 30, 2017 . The expected amortization expense for the remaining period in 2018 , each of the fiscal years 2019 through 2022 and for periods thereafter is as follows: Years ending December 31, Amount 2018 (remaining) $ 11,413 2019 22,701 2020 22,121 2021 16,678 2022 15,542 Thereafter 88,212 Total definite life intangible assets, net $ 176,667 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net, consists of the following: June 30, 2018 December 31, 2017 Satellite system $ 1,586,794 $ 1,586,794 Terrestrial repeater network 124,904 123,254 Leasehold improvements 59,477 57,635 Broadcast studio equipment 101,338 96,582 Capitalized software and hardware 719,433 639,516 Satellite telemetry, tracking and control facilities 74,201 69,147 Furniture, fixtures, equipment and other 98,849 96,965 Land 38,411 38,411 Building 61,844 61,824 Construction in progress 347,196 301,153 Total property and equipment 3,212,447 3,071,281 Accumulated depreciation and amortization (1,743,517 ) (1,608,515 ) Property and equipment, net $ 1,468,930 $ 1,462,766 Construction in progress consists of the following: June 30, 2018 December 31, 2017 Satellite system $ 231,047 $ 183,243 Terrestrial repeater network 2,972 2,515 Capitalized software and hardware 95,555 94,456 Other 17,622 20,939 Construction in progress $ 347,196 $ 301,153 Depreciation and amortization expense on property and equipment was $68,760 and $61,421 for the three months ended June 30, 2018 and 2017 , respectively, and $135,110 and $126,597 for the six months ended June 30, 2018 and 2017 , respectively. We retired property and equipment of $14,760 during the six months ended June 30, 2017 . There were no retirements of property and equipment during the six months ended June 30, 2018 . We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites. Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life. Capitalized interest costs were $2,901 and $1,005 for the three months ended June 30, 2018 and 2017 , respectively, and $5,155 and $1,723 for the six months ended June 30, 2018 and 2017 , respectively, which related to the construction of our SXM-7 and SXM-8 satellites. Satellites As of June 30, 2018 , we owned a fleet of five satellites. The chart below provides certain information on our satellites as of June 30, 2018 : Satellite Description Year Delivered Estimated End of SIRIUS FM-5 2009 2024 SIRIUS FM-6 2013 2028 XM-3 2005 2020 XM-4 2006 2021 XM-5 2010 2025 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In the normal course of business, we enter into transactions with related parties such as Liberty Media, Sirius XM Canada and Pandora. Liberty Media As of June 30, 2018 , Liberty Media beneficially owned, directly and indirectly, approximately 70% of the outstanding shares of our common stock. Liberty Media has two executives and one of its directors on our board of directors. Gregory B. Maffei, the President and Chief Executive Officer of Liberty Media, is the Chairman of our board of directors. Sirius XM Canada On May 25, 2017, Sirius XM completed a recapitalization of Sirius XM Canada (the “Transaction”), which is now a privately held corporation. Following the Transaction, Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada, with the remainder of the voting power and equity interests held by two of Sirius XM Canada’s previous shareholders. The total consideration from Sirius XM to Sirius XM Canada, excluding transaction costs, during the year ended December 31, 2017 was $308,526 , which included $129,676 in cash and we issued 35,000 shares of our common stock with an aggregate value of $178,850 to the holders of the shares of Sirius XM Canada acquired in the Transaction. Sirius XM received common stock, non-voting common stock and preferred stock of Sirius XM Canada. We own 590,950 shares of preferred stock of Sirius XM Canada, which has a liquidation preference of one Canadian dollar per share. In connection with the Transaction, Sirius XM also made a contribution in the form of a loan to Sirius XM Canada in the aggregate amount of $130,794 . The loan is denominated in Canadian dollars and is considered a long-term investment with any unrealized gains or losses reported within Accumulated other comprehensive (loss) income. The loan has a term of fifteen years , bears interest at a rate of 7.62% per annum and includes customary covenants and events of default, including an event of default relating to Sirius XM Canada’s failure to maintain specified leverage ratios. The terms of the loan require Sirius XM Canada to prepay a portion of the outstanding principal amount of the loan within sixty days of the end of each fiscal year in an amount equal to any cash on hand in excess of C$10,000 at the last day of the financial year if all target dividends have been paid in full. During the six months ended June 30, 2018 , Sirius XM Canada repaid $3,242 of the principal amount of the loan. In connection with the Transaction, Sirius XM also entered into a Services Agreement and an Advisory Services Agreement with Sirius XM Canada. Each agreement has a thirty year term. Pursuant to the Services Agreement, Sirius XM Canada pays Sirius XM 25% of its gross revenues on a monthly basis through December 31, 2021 and 30% of its gross revenues on a monthly basis thereafter. Pursuant to the Advisory Services Agreement, Sirius XM Canada pays Sirius XM 5% of its gross revenues on a monthly basis. These agreements superseded and replaced the former agreements between Sirius XM Canada and its predecessors and Sirius XM. Sirius XM Canada is accounted for as an equity method investment, and its results are not consolidated in our unaudited consolidated financial statements. Sirius XM Canada does not meet the requirements for consolidation as we do not have the ability to direct the most significant activities that impact Sirius XM Canada's economic performance. We had the following related party balances associated with Sirius XM Canada: June 30, 2018 December 31, 2017 Related party current assets $ 13,692 $ 10,284 Related party long-term assets $ 453,416 $ 481,608 Related party current liabilities $ 4,103 $ 2,839 Related party long-term liabilities $ 6,269 $ 7,364 As of June 30, 2018 and December 31, 2017 , our related party current asset balance included amounts due under the Services Agreement and Advisory Services Agreement and certain amounts related to transactions outside the scope of the new services arrangements. Our related party long-term assets balance as of June 30, 2018 and December 31, 2017 included the carrying value of our investment balance in Sirius XM Canada of $323,226 and $341,214 , respectively, and, as of June 30, 2018 and December 31, 2017 , also included $130,190 and $140,073 , respectively, for the long-term value of the outstanding loan to Sirius XM Canada. Our related party liabilities as of each of June 30, 2018 and December 31, 2017 included $2,776 for the current portion of deferred revenue and $3,700 and $5,088 , respectively, for the long-term portion of deferred revenue recorded as of the Merger date related to agreements with legacy XM Canada, now Sirius XM Canada. These costs are being amortized on a straight line basis through 2020. Sirius XM Canada paid gross dividends to us of $408 during the three months ended June 30, 2018 and $1,439 and $3,796 during the six months ended June 30, 2018 and 2017 , respectively. Sirius XM Canada did no t pay any dividends to us during the three months ended June 30, 2017 . Dividends are first recorded as a reduction to our investment balance in Sirius XM Canada to the extent a balance exists and then as Other income for any remaining portion. We recorded the following revenue and other income associated with Sirius XM Canada in our unaudited consolidated statements of comprehensive income: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Revenue (a)(b) $ 23,273 $ 28,129 $ 47,370 $ 40,345 Other income Share of net earnings (b) $ (896 ) $ (5,197 ) $ 85 $ (2,183 ) Interest income (c) $ 2,557 $ 803 $ 5,204 $ 803 (a) Prior to the Transaction, under our former agreements with Sirius XM Canada, we received a percentage-based fee of 10% and 15% for certain types of subscription revenue earned by Sirius XM Canada for the use of the Sirius and XM platforms, respectively, and additional fees for premium services and fees for activation fees and reimbursements for other charges. We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income. (b) Prior to the Transaction, we recognized our proportionate share of revenue and earnings or losses attributable to Sirius XM Canada on a one month lag. As a result of the Transaction, there is no longer a one -month lag and Sirius XM Canada changed its fiscal year-end to December 31 to align with us. For the three and six months ended June 30, 2018 , Share of net earnings included $611 and $1,234 , respectively, of amortization related to equity method intangible assets. (c) This interest income relates to the loan to Sirius XM Canada and is recorded as Other income in our unaudited consolidated statements of comprehensive income. Pandora On September 22, 2017, Sirius XM completed a $480,000 investment in Pandora. Pursuant to an Investment Agreement with Pandora, Sirius XM purchased 480 shares of Pandora’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), for an aggregate purchase price of $480,000 . As of June 30, 2018 , the Series A Preferred Stock, including accrued but unpaid dividends, represents a stake of approximately 18% of Pandora's common stock outstanding and approximately a 15% interest on an as-converted basis. Pandora operates an internet-based music discovery platform, offering a personalized experience for listeners. The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock of Pandora (“Pandora Common Stock”) at an initial conversion price of $10.50 per share of Pandora Common Stock and an initial conversion rate of 95.2381 shares of Pandora Common Stock per share of Series A Preferred Stock, subject to certain customary anti-dilution adjustments. Holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 6.0% per annum, payable quarterly in arrears, if and when declared. Pandora has the option to pay dividends in cash when authorized by their Board and declared by Pandora or accumulate dividends in lieu of paying cash. Any conversion of Series A Preferred Stock may be settled by Pandora, at its option, in shares of Pandora Common Stock, cash or any combination thereof. However, unless and until Pandora’s stockholders have approved the issuance of greater than 19.99% of the outstanding Pandora Common Stock, the Series A Preferred Stock may not be converted into more than 19.99% of Pandora’s outstanding Pandora Common Stock as of June 9, 2017. The liquidation preference of the Series A Preferred Stock, including accrued dividends of $25,684 , was $505,684 as of June 30, 2018 . The investment includes a mandatory redemption feature on any date from and after September 22, 2022 whereby Sirius XM, at its option, may require Pandora to purchase the Series A Preferred Stock at a price equal to 100% of the liquidation preference plus accrued but unpaid dividends for, at the election of Pandora, cash, shares of Pandora Common Stock or a combination thereof, and as such the investment qualifies as a debt security under ASC 320, Investments-Debt and Equity Securities . As the investment includes a conversion option, we have elected to account for this investment under the fair value option to reduce the accounting asymmetry that would otherwise arise when recognizing the changes in the fair value of available-for-sale investments. Under the fair value option, any gains (losses) associated with the change in fair value will be recognized in Other income within our unaudited consolidated statements of comprehensive income. An $86,074 and $117,449 unrealized gain associated with this investment was recognized during the three and six months ended June 30, 2018 , respectively, as Other income in our unaudited consolidated statements of comprehensive income. The fair value of our investment, including accrued dividends, as of June 30, 2018 and December 31, 2017 was $597,921 and $480,472 , respectively, and is recorded as a related party long-term asset within our unaudited consolidated balance sheets. This investment does not meet the requirements for the equity method of accounting as it does not qualify as in-substance common stock. Sirius XM has appointed James E. Meyer, our Chief Executive Officer, David J. Frear, our Senior Executive Vice President and Chief Financial Officer, and Gregory B. Maffei, the Chairman of our Board of Directors, to Pandora's Board of Directors pursuant to our designation rights under the Investment Agreement. Mr. Maffei also serves as the Chairman of Pandora's Board of Directors. Sirius XM's right to designate directors will fall away once Sirius XM and its affiliates fail to beneficially own shares of Series A Preferred Stock and/or Pandora Common Stock issued upon conversion thereof equal to (on an as-converted basis) at least 50% of the number of shares of Pandora Common Stock issuable upon conversion of the Series A Preferred Stock purchased under the Investment Agreement. Following the earlier to occur of (i) September 22, 2019 and (ii) the date on which Sirius XM and its affiliates fail to beneficially own shares of Series A Preferred Stock and/or Pandora Common Stock that were issued upon conversion thereof equal to (on an as-converted basis) at least 75% of the number of shares of Pandora Common Stock issuable upon conversion of the Series A Preferred Stock purchased under the Investment Agreement, Sirius XM has the right to designate only two directors. We are subject to certain standstill restrictions, including, among other things, that we are restricted from acquiring additional securities of Pandora until December 9, 2018. Except as to matters that may be voted upon separately by holders of the Series A Preferred Stock, Sirius XM is entitled to vote as a single class with the holders of Pandora Common Stock on an as-converted basis (up to a maximum of 19.99% of the Pandora Common Stock outstanding on June 9, 2017, unless stockholder approval has been received). Sirius XM is also entitled to a separate class vote with respect to certain amendments to Pandora’s organizational documents, issuances by Pandora of securities that are senior to, or equal in priority with, the Series A Preferred Stock and the incurrence of certain indebtedness by Pandora. Upon certain change of control events involving Pandora, Pandora is required to repurchase all of the Series A Preferred Stock at a price equal to the greater of (1) an amount in cash equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends through June 9, 2022 (assuming such shares of Series A Preferred Stock remain outstanding through such date) and (2) the consideration the holders would have received if they had converted their shares of Series A Preferred Stock into Pandora Common Stock immediately prior to the change of control event (disregarding the 19.99% cap). Beginning on September 22, 2020, if the volume weighted average price per share of Pandora Common Stock exceeds $18.375 , as may be adjusted, for at least 20 trading days in any period of 30 consecutive trading days, Pandora may redeem all of the outstanding Series A Preferred Stock at a price equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends for, at the election of Pandora, cash, shares of Pandora Common Stock or a combination thereof, provided that, unless stockholder approval has been received, Pandora may not settle the redemption for shares of Pandora Common Stock to the extent the 19.99% cap would be exceeded. Pursuant to a registration rights agreement entered into with Pandora, Sirius XM has certain customary registration rights with respect to the Series A Preferred Stock and Pandora Common Stock issued upon conversion thereof. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Our debt as of June 30, 2018 and December 31, 2017 consisted of the following: Carrying value (a) at Issuer / Borrower Issued Debt Maturity Date Interest Payable Principal Amount at June 30, 2018 June 30, 2018 December 31, 2017 Sirius XM July 2017 3.875% Senior Notes August 1, 2022 semi-annually on February 1 and August 1 $ 1,000,000 $ 992,811 $ 992,011 Sirius XM May 2013 4.625% Senior Notes May 15, 2023 semi-annually on May 15 and November 15 500,000 496,923 496,646 Sirius XM May 2014 6.00% Senior Notes July 15, 2024 semi-annually on January 15 and July 15 1,500,000 1,488,758 1,488,002 Sirius XM March 2015 5.375% Senior Notes April 15, 2025 semi-annually on April 15 and October 15 1,000,000 991,777 991,285 Sirius XM May 2016 5.375% Senior Notes July 15, 2026 semi-annually on January 15 and July 15 1,000,000 990,597 990,138 Sirius XM July 2017 5.00% Senior Notes August 1, 2027 semi-annually on February 1 and August 1 1,500,000 1,486,728 1,486,162 Sirius XM December 2012 Senior Secured Revolving Credit Facility (the "Credit Facility") June 29, 2023 variable fee paid quarterly 1,750,000 — 300,000 Sirius XM Various Capital leases Various n/a n/a 8,324 10,597 Total Debt 6,455,918 6,754,841 Less: total current maturities 4,660 5,105 Less: total deferred financing costs for Notes 7,969 8,493 Total long-term debt $ 6,443,289 $ 6,741,243 (a) The carrying value of the obligations is net of any remaining unamortized original issue discount. (b) Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes. (c) In June 2018, Sirius XM entered into an amendment to extend the maturity of the Credit Facility to June 2023. Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries. Interest on borrowings is payable on a monthly basis and accrues at a rate based on LIBOR plus an applicable rate. Sirius XM is also required to pay a variable fee on the average daily unused portion of the Credit Facility which is payable on a quarterly basis. The variable rate for the unused portion of the Credit Facility was 0.25% per annum as of June 30, 2018 . All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our unaudited consolidated balance sheets due to the long-term maturity of this debt. Covenants and Restrictions Under the Credit Facility, Sirius XM, our wholly-owned subsidiary, must comply with a debt maintenance covenant that it cannot exceed a total leverage ratio, calculated as consolidated total debt to consolidated operating cash flow, of 5.0 to 1.0. The Credit Facility generally requires compliance with certain covenants that restrict Sirius XM's ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another person, (vi) sell, assign, lease or otherwise dispose of all or substantially all of Sirius XM's assets, and (vii) make voluntary prepayments of certain debt, in each case subject to exceptions. The indentures governing Sirius XM's notes restrict Sirius XM's non-guarantor subsidiaries' ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiary guaranteeing each such series of notes on a pari passu basis. The indentures governing the notes also contain covenants that, among other things, limit Sirius XM's ability and the ability of its subsidiaries to create certain liens; enter into sale/leaseback transactions; and merge or consolidate. Under Sirius XM's debt agreements, the following generally constitute an event of default: (i) a default in the payment of interest; (ii) a default in the payment of principal; (iii) failure to comply with covenants; (iv) failure to pay other indebtedness after final maturity or acceleration of other indebtedness exceeding a specified amount; (v) certain events of bankruptcy; (vi) a judgment for payment of money exceeding a specified aggregate amount; and (vii) voidance of subsidiary guarantees, subject to grace periods where applicable. If an event of default occurs and is continuing, our debt could become immediately due and payable. At June 30, 2018 and December 31, 2017 , we were in compliance with our debt covenants. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock, par value $0.001 per share We are authorized to issue up to 9,000,000 shares of common stock. There were 4,485,774 and 4,530,928 shares of common stock issued and 4,485,774 and 4,527,742 shares outstanding on June 30, 2018 and December 31, 2017 , respectively. As of June 30, 2018 , there were 281,863 shares of common stock reserved for issuance in connection with outstanding stock based awards to be granted to members of our board of directors, employees and third parties. Quarterly Dividends During the six months ended June 30, 2018 , our board of directors declared the following dividends: Declaration Date Dividend Per Share Record Date Total Amount Payment Date January 23, 2018 $ 0.011 February 7, 2018 $ 49,397 February 28, 2018 April 26, 2018 $ 0.011 May 10, 2018 $ 49,287 May 31, 2018 Stock Repurchase Program As of June 30, 2018 , our board of directors had approved for repurchase an aggregate of $12,000,000 of our common stock. Our board of directors did not establish an end date for this stock repurchase 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, in privately negotiated transactions, including transactions with Liberty Media and its affiliates, or otherwise. As of June 30, 2018 , our cumulative repurchases since December 2012 under our stock repurchase program totaled 2,529,978 shares for $9,694,181 , and $2,305,819 remained available under our stock repurchase program. The following table summarizes our total share repurchase activity for the six months ended: June 30, 2018 June 30, 2017 Share Repurchase Type Shares Amount Shares Amount Open Market 55,843 $ 317,061 155,711 $ 775,701 Preferred Stock, par value $0.001 per share We are authorized to issue up to 50,000 shares of undesignated preferred stock with a liquidation preference of $0.001 per share. There were no shares of preferred stock issued or outstanding as of June 30, 2018 and 2017 . |
Benefit Plans
Benefit Plans | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans We recognized share-based payment expense of $36,215 and $30,251 for the three months ended June 30, 2018 and $70,448 and $59,697 for the six months ended June 30, 2018 and 2017 , respectively. 2015 Long-Term Stock Incentive Plan In May 2015, our stockholders approved the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (the “2015 Plan”). Employees, consultants and members of our board of directors are eligible to receive awards under the 2015 Plan. The 2015 Plan provides for the grant of stock options, restricted stock awards, restricted stock units and other stock-based awards that the compensation committee of our board of directors deems appropriate. Stock-based awards granted under the 2015 Plan are generally subject to a graded vesting requirement, which is generally three to four years from the grant date. Stock options generally expire ten years from the date of grant. Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the third anniversary of the grant date. Each restricted stock unit entitles the holder to receive one share of common stock upon vesting. As of June 30, 2018 , 171,619 shares of common stock were available for future grants under the 2015 Plan. Other Plans We maintain three other share-based benefit plans — the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan, the XM 2007 Stock Incentive Plan and the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan. Excluding dividend equivalent units granted as a result of a declared dividend, no further awards may be made under these plans. The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Risk-free interest rate 2.6% 1.6% 2.5% 1.6% Expected life of options — years 3.48 4.35 3.54 4.07 Expected stock price volatility 22% 26% 22% 26% Expected dividend yield 0.6% 0.8% 0.7% 0.8% There were no options granted to third parties during the three and six months ended June 30, 2018 and 2017 . The following table summarizes stock option activity under our share-based plans for the six months ended June 30, 2018 : Options Weighted- Weighted- Aggregate Outstanding as of December 31, 2017 280,457 $ 3.76 Granted 10,617 $ 6.44 Exercised (41,644 ) $ 3.18 Forfeited, cancelled or expired (1,926 ) $ 4.48 Outstanding as of June 30, 2018 247,504 $ 3.96 6.40 $ 695,499 Exercisable as of June 30, 2018 115,544 $ 3.40 5.30 $ 389,015 The weighted average grant date fair value per share of stock options granted during the six months ended June 30, 2018 was $1.19 . The total intrinsic value of stock options exercised during the six months ended June 30, 2018 and 2017 was $139,812 and $47,572 , respectively. During the six months ended June 30, 2018 the number of net settled shares which were issued as a result of stock option exercises was 12,054 . We recognized share-based payment expense associated with stock options of $20,776 and $20,125 for the three months ended June 30, 2018 and 2017 , respectively, and $40,435 and $39,637 for the six months ended June 30, 2018 and 2017 , respectively. The following table summarizes the restricted stock unit, including PRSU, activity under our share-based plans for the six months ended June 30, 2018 : Shares Grant Date Nonvested as of December 31, 2017 31,323 $ 4.54 Granted 7,123 $ 6.27 Vested (3,518 ) $ 3.92 Forfeited (569 ) $ 4.80 Nonvested as of June 30, 2018 34,359 $ 4.93 The total intrinsic value of restricted stock units, including PRSUs, vesting during the six months ended June 30, 2018 and 2017 was $22,656 and $4,802 , respectively. During the six months ended June 30, 2018 , the number of net settled shares which were issued as a result of restricted stock units vesting totaled 1,821 . During the six months ended June 30, 2018 , we granted 3,768 PRSUs to certain employees. We believe it is probable that the performance target applicable to these PRSUs will be achieved. In connection with the cash dividends paid during the six months ended June 30, 2018 , we granted 126 restricted stock units, including PRSUs, in accordance with the terms of existing award agreements. These grants did not result in any additional incremental share-based payment expense being recognized during the six months ended June 30, 2018 . We recognized share-based payment expense associated with restricted stock units, including PRSUs, of $15,439 and $10,126 for the three months ended June 30, 2018 and 2017 , respectively, and $30,013 and $20,060 for the six months ended June 30, 2018 and 2017 , respectively. Total unrecognized compensation costs related to unvested share-based payment awards for stock options and restricted stock units, including PRSUs, granted to employees, members of our board of directors and third parties at June 30, 2018 and December 31, 2017 was $251,588 and $241,521 , respectively. The total unrecognized compensation costs at June 30, 2018 are expected to be recognized over a weighted-average period of 1.72 years. 401(k) Savings Plan Sirius XM sponsors the Sirius XM Radio Inc. 401(k) Savings Plan (the “Sirius XM Plan”) for eligible employees. The Sirius XM Plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain defined limits. We match 50% of an employee’s voluntary contributions per pay period on the first 6% of an employee’s pre-tax salary up to a maximum of 3% of eligible compensation. We may also make additional discretionary matching, true-up matching and non-elective contributions to the Sirius XM Plan. Employer matching contributions under the Sirius XM Plan vest at a rate of 33.33% for each year of employment and are fully vested after three years of employment for all current and future contributions. Our cash employer matching contributions are not used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution. We recognized $2,159 and $1,835 in expense during three months ended June 30, 2018 and 2017 , respectively, and $4,028 and $3,517 in expense during the six months ended June 30, 2018 and 2017 , respectively, in connection with the Sirius XM Plan. Sirius XM Holdings Inc. Deferred Compensation Plan In 2015, we adopted the Sirius XM Holdings Inc. Deferred Compensation Plan (the “DCP”). The DCP allows members of our board of directors and certain eligible employees to defer all or a portion of their base salary, cash incentive compensation and/or board of directors’ cash compensation, as applicable. Pursuant to the terms of the DCP, we may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so. We have established a grantor (or “rabbi”) trust to facilitate the payment of our obligations under the DCP. Contributions to the DCP, net of withdrawals, for the three months ended June 30, 2018 and 2017 were $307 and $334 , respectively, and for the six months ended June 30, 2018 and 2017 were $7,138 and $7,355 , respectively. As of June 30, 2018 and December 31, 2017 , the fair value of the investments held in the trust were $22,375 and $14,641 , respectively, which is included in Other long-term assets in our unaudited consolidated balance sheets and are classified as trading securities. Trading gains and losses associated with these investments are recorded in Other income within our unaudited consolidated statements of comprehensive income. The associated liability is recorded within Other long-term liabilities in our unaudited consolidated balance sheets, and any increase or decrease in the liability is recorded in General and administration expense within our unaudited consolidated statements of comprehensive income. For the three and six months ended June 30, 2018 and 2017 , we recorded an immaterial amount of unrealized gains on investments held in the trust. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The following table summarizes our expected contractual cash commitments as of June 30, 2018 : 2018 2019 2020 2021 2022 Thereafter Total Debt obligations $ 2,455 $ 3,935 $ 1,207 $ 727 $ 1,000,000 $ 5,500,000 $ 6,508,324 Cash interest payments 168,407 338,887 338,844 338,817 338,811 919,243 2,443,009 Satellite and transmission 59,557 94,922 51,056 4,347 2,428 4,288 216,598 Programming and content 136,122 251,953 207,728 118,706 52,475 162,938 929,922 Sales and marketing 9,990 12,817 7,701 7,446 1,644 203 39,801 Satellite incentive payments 8,001 10,652 10,197 8,574 8,558 61,767 107,749 Operating lease obligations 19,499 44,983 42,779 37,416 34,096 143,628 322,401 Royalties and other 230,132 139,285 103,414 86,253 23,199 33 582,316 Total (1) $ 634,163 $ 897,434 $ 762,926 $ 602,286 $ 1,461,211 $ 6,792,100 $ 11,150,120 (1) The table does not include our reserve for uncertain tax positions, which at June 30, 2018 totaled $15,344 . Debt obligations. Debt obligations include principal payments on outstanding debt and capital lease obligations. Cash interest payments. Cash interest payments include interest due on outstanding debt and capital lease payments through maturity. Satellite and transmission. We have entered into agreements with several third parties to design, build, launch and insure two satellites, SXM-7 and SXM-8. We also have entered into agreements with third parties to operate and maintain satellite telemetry, tracking and control facilities and certain components of our terrestrial repeater networks. Programming and content. We have entered into various programming and content agreements. Under the terms of these agreements, our obligations include fixed payments, advertising commitments and revenue sharing arrangements. In certain of these agreements, the future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they are not included in our minimum contractual cash commitments. Sales and marketing. We have entered into various marketing, sponsorship and distribution agreements to promote our brand and are obligated to make payments to sponsors, retailers, automakers and radio manufacturers under these agreements. Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors. Satellite incentive payments. Boeing Satellite Systems International, Inc., the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments with respect to XM-3 and XM-4 meeting their fifteen -year design life, which we expect to occur. Boeing may also be entitled to up to $10,000 of additional incentive payments if our XM-4 satellite continues to operate above baseline specifications during the five years beyond the satellite’s fifteen -year design life, which is currently not expected to occur. Space Systems/Loral, the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments with respect to XM-5, SIRIUS FM-5 and SIRIUS FM-6 meeting their fifteen -year design life, which we expect to occur. Operating lease obligations. We have entered into both cancelable and non-cancelable operating leases for office space, equipment and terrestrial repeaters. These leases provide for minimum lease payments, additional operating expense charges, leasehold improvements and rent escalations that have initial terms ranging from one to fifteen years , and certain leases have options to renew. The effect of the rent holidays and rent concessions are recognized on a straight-line basis over the lease term, including reasonably assured renewal periods. Royalties and other. We have entered into certain music royalty arrangements that include fixed payments. We have also entered into various agreements with third parties for general operating purposes. In addition to the minimum contractual cash commitments described above, we have entered into other variable cost arrangements. These future costs are dependent upon many factors and are difficult to anticipate; however, these costs may be substantial. We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions. We also have a surety bond of approximately $45,000 primarily used as security against non-performance in the normal course of business. We do not have any other significant off-balance sheet financing arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources. Legal Proceedings In the ordinary course of business, we are a defendant or party to various claims and lawsuits, including those discussed below. We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the reasonably possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any. SoundExchange Royalty Claims . On June 7, 2018, Sirius XM entered into an agreement with SoundExchange, Inc., the organization that collects and distributes sound recording royalties pursuant to our statutory license, to settle the cases titled SoundExchange, Inc. v. Sirius XM Radio, Inc., No.13-cv-1290-RJL (D.D.C.), and SoundExchange, Inc. v. Sirius XM Radio, Inc., No.17-cv-02666-RJL (D.D.C.). A description of these actions is contained in our prior public filings. In connection with the settlement, we made a one-time lump sum payment of $150,000 to SoundExchange on July 6, 2018. The settlement resolved all outstanding claims, including ongoing audits, under our statutory license for sound recordings for the period January 1, 2007 through December 31, 2017. Telephone Consumer Protection Act Suits . On March 13, 2017, Thomas Buchanan, individually and on behalf of all others similarly situated, filed a class action complaint against us in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiff in this action alleges that we violated the Telephone Consumer Protection Act of 1991 (the “TCPA”) by, among other things, making telephone solicitations to persons on the National Do-Not-Call registry, a database established to allow consumers to exclude themselves from telemarketing calls unless they consent to receive the calls in a signed, written agreement, and making calls to consumers in violation of our internal Do-Not-Call registry. The plaintiff is seeking various forms of relief, including statutory damages of five hundred dollars for each violation of the TCPA or, in the alternative, treble damages of up to fifteen hundred dollars for each knowing and willful violation of the TCPA and a permanent injunction prohibiting us from making, or having made, any calls to land lines that are listed on the National Do-Not-Call registry or our internal Do-Not-Call registry. We believe we have substantial defenses to the claims asserted in this action, and we intend to defend this action vigorously. Other Matters . In the ordinary course of business, we are a defendant in various other lawsuits and arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases; and owners of patents, trademarks, copyrights or other intellectual property. None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We file a consolidated federal income tax return for all of our wholly-owned subsidiaries, including Sirius XM. For the three months ended June 30, 2018 and 2017 , income tax expense was $70,570 and $119,513 , respectively, and $150,819 and $233,486 for the six months ended June 30, 2018 and 2017 , respectively. Our effective tax rate for the three months ended June 30, 2018 and 2017 was 19.4% and 37.2% , respectively. Our effective tax rate for the six months ended June 30, 2018 and 2017 was 20.6% and 36.3% , respectively. The effective tax rate for the three and six months ended June 30, 2018 was primarily impacted by the reduced federal income tax rate as a result of the Tax Act and the recognition of excess tax benefits related to share based compensation. The effective tax rate for the three and six months ended June 30, 2017 was impacted by the recognition of excess tax benefits related to share based compensation. We estimate our effective tax rate for the year ending December 31, 2018 will be approximately 22% . As of June 30, 2018 and December 31, 2017 , we had a valuation allowance related to deferred tax assets of $52,405 and $52,883 , respectively, that were not likely to be realized due to certain net operating loss limitations and acquired net operating losses that were not more likely than not going to be utilized. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 18, 2018 , our board of directors declared a quarterly dividend on our common stock in the amount of $0.011 per share of common stock payable on August 31, 2018 to stockholders of record as of the close of business on August 10, 2018 . |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements of Holdings and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Estimates, by their nature, are based on judgment and available information. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the accompanying unaudited consolidated financial statements include asset impairment, depreciable lives of our satellites, share-based payment expense, and income taxes. |
Recent Accounting Pronouncements and Recently Adopted Accounting Policies | In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We are in the process of evaluating the impact of adoption of this ASU on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The FASB recently issued an exposure draft amending certain aspects of the new leasing standard. The proposed amendment allows adoption of the standard as of the effective date without restating prior periods. We plan to adopt this ASU on January 1, 2019. We expect the adoption of ASU 2016-02 will result in the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for operating leases. Recently Adopted Accounting Policies ASU 2014-09, Revenue - Revenue from Contracts with Customers . In May 2014, the FASB issued ASU 2014-09 which requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09, and all related amendments, which established ASC Topic 606 (the "new revenue standard"), effective as of January 1, 2018. We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The new revenue standard primarily impacts how we account for revenue share payments and also has other immaterial impacts. Revenue Share - Paid Trials We previously recorded revenue share related to paid trials as Revenue share and royalties expense. Under the new revenue standard, we have recorded these revenue share payments as a reduction to revenue as the payments do not transfer a distinct good or service to us. Prior to the adoption, we recognized revenue share related to paid trial subscriptions as the Current portion of deferred revenue. Under the new revenue standard, we reclassified the revenue share related to paid trial subscriptions existing as of the date of adoption from Current portion of deferred revenue to Accounts payable and accrued expenses. For new paid trial subscriptions, the net amount of the paid trial subscription will be recorded as deferred revenue and the portion of revenue share will be recorded to Accounts payable and accrued expenses. Other Impacts Other impacts of the new revenue standard include: • Activation fees were previously recognized over the expected subscriber life using the straight-line method. Under the new revenue standard, the activation fees have been recognized over a one month period from activation as the activation fees are non-refundable and they do not convey a material right. As of January 1, 2018, we reduced deferred revenue related to activation fees of $8,260 , net of tax, to Accumulated deficit. • Loyalty payments to OEMs were previously expensed when incurred as Subscriber acquisition costs. Under the new revenue standard, these costs have been capitalized in Prepaid expenses and other current assets as costs to obtain a contract and these costs will be amortized to Subscriber acquisition costs over an average self-pay subscriber life of that OEM. As of January 1, 2018, we capitalized previously expensed loyalty payments of $10,156 , net of tax, to Prepaid expenses and other current assets by reducing Accumulated deficit. These changes do not have a material impact to our financial statements. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02 to amend its standard on comprehensive income to provide an option for an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) that was passed in December 2017 from accumulated other comprehensive income (“AOCI”) directly to retained earnings. The stranded tax effects result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal years beginning after December 15, 2018, with early adoption permitted. We elected to adopt ASU 2018-02 effective January 1, 2018 and reclassified the stranded tax effects due to the Tax Act of $4,013 related to the currency translation adjustment from our investment balance and note receivable with Sirius XM Canada from AOCI to Accumulated deficit. The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09 and ASU 2018-02 are included in the table below. Balance at Adjustments Due to ASU 2014-09 Adjustments Due to ASU 2018-02 Balance at January 1, 2018 Balance Sheet Assets Prepaid expenses and other current assets $ 129,669 $ 8,262 $ — $ 137,931 Other long-term assets 118,671 2,576 — 121,247 Deferred tax assets 505,528 (5,915 ) — 499,613 Liabilities: Accounts payable and accrued expenses 794,341 32,399 — 826,740 Current portion of deferred revenue 1,881,825 (41,902 ) — 1,839,923 Deferred revenue 174,579 (3,990 ) — 170,589 Equity: Accumulated deficit (3,243,473 ) 18,416 (4,013 ) (3,229,070 ) AOCI, net of tax 18,407 — 4,013 22,420 The following table illustrates the impact of adopting ASU 2014-09 on our unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income. For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 As Reported Impact of Adopting ASU 2014-09 Balances Without Adoption of ASU 2014-09 As Reported Impact of Adopting ASU 2014-09 Balances Without Adoption of ASU 2014-09 Income Statement Revenues Subscriber revenue $ 1,138,962 $ 23,787 $ 1,162,749 $ 2,256,046 $ 48,179 $ 2,304,225 Expenses Revenue share and royalties 404,284 22,235 426,519 714,416 44,304 758,720 Subscriber acquisition costs 119,778 800 120,578 242,471 1,845 244,316 Income tax expense (70,570 ) (146 ) (70,716 ) (150,819 ) (418 ) (151,237 ) Net Income $ 292,352 $ 606 $ 292,958 $ 581,793 $ 1,612 $ 583,405 The adoption of the new revenue standard did not have a material impact on our unaudited consolidated balance sheet as of June 30, 2018 . ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This ASU updates the guidance related to the statement of cash flows and requires that the statement include restricted cash with cash and cash equivalents when reconciling beginning and ending cash. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We adopted this ASU effective January 1, 2018. As a result of the adoption, we have added restricted cash to the reconciliation of beginning and ending cash and cash equivalents and included a reconciliation of total cash, cash equivalents and restricted cash to the balance sheet for each period presented in the unaudited consolidated statements of cash flows. |
Revenues | Subscription Revenue Subscription revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio typically receive between a three and twelve month subscription to our service. In certain cases, the subscription fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from certain automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale and activation. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the OEM when we receive a certain amount of payments from self-pay customers acquired from that OEM. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life of that OEM. Revenue share and loyalty fees paid to the OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service. Advertising Revenue We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue. Additionally, we pay certain third parties a percentage of advertising revenue. Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service. Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted. Equipment Revenue Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon shipment. Revenue is recognized net of discounts and rebates. Music Royalty Fee and Other Revenue Music Royalty Fee and Other Revenue primarily consists of U.S. music royalty fees ("MRF"). The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense. Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the subscription services which are continuously delivered to our customers. Deferred Revenue Customers generally pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our unaudited consolidated statement of comprehensive income as the services are provided. Changes in the liability balance during the period ended June 30, 2018 was not materially impacted by other factors. |
Transaction Price Allocated to the Remaining Performance Obligations | As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. As of June 30, 2018, less than ten percent of our total deferred revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance. These amounts will be recognized on a straight-line basis as our services are provided. |
Earnings per Share | Basic net income per common share is calculated by dividing the income available to common stockholders by the weighted average common shares outstanding during each reporting period. Diluted net income per common share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. |
Receivables, net | Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables. Customer accounts receivable, net, includes receivables from our subscribers and other customers, including advertising, and is stated at amounts due, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is based upon our assessment of various factors. We consider historical experience, the age of the receivable balances, current economic conditions and other factors that may affect the counterparty’s ability to pay. Bad debt expense is included in Customer service and billing expense in our unaudited consolidated statements of comprehensive income. Receivables from distributors primarily include billed and unbilled amounts due from OEMs for services included in the sale or lease price of vehicles, as well as billed amounts due from wholesale distributors of our satellite radios. Other receivables primarily include amounts due from manufacturers of our radios, modules and chipsets where we are entitled to subsidies and royalties based on the number of units produced. We have not established an allowance for doubtful accounts for our receivables from distributors or other receivables as we have historically not experienced any significant collection issues with OEMs or other third parties. |
Inventory, net | Inventory consists of finished goods, refurbished goods, chipsets and other raw material components used in manufacturing radios and connected vehicle devices. Inventory is stated at the lower of cost or market. We record an estimated allowance for inventory that is considered slow moving or obsolete or whose carrying value is in excess of net realizable value. The provision related to products purchased for resale in our direct to consumer distribution channel and components held for resale by us is reported as a component of Cost of equipment in our unaudited consolidated statements of comprehensive income. The provision related to inventory consumed in our OEM channel is reported as a component of Subscriber acquisition costs in our unaudited consolidated statements of comprehensive income. |
Goodwill | Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Our annual impairment assessment of our single reporting unit is performed as of the fourth quarter of each year, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ASC 350, Intangibles - Goodwill and Other , states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASC 350 also states that a reporting unit with a zero or negative carrying amount is not required to perform a qualitative assessment. |
Indefinite Life Intangible Assets | Our annual impairment assessment of our identifiable indefinite life intangible assets is performed as of the fourth quarter of each year. An assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. If the carrying value of the intangible assets exceeds its fair value, an impairment loss is recognized. |
Legal Proceedings | We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the reasonably possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of assets and liabilities measured at fair value | Our assets and liabilities measured at fair value were as follows: June 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Fair Level 1 Level 2 Level 3 Total Fair Assets: Pandora Media, Inc. (“Pandora”) - investment (a) — $ 597,921 — $ 597,921 — $ 480,472 — $ 480,472 Liabilities: Debt (b) — $ 6,342,699 — $ 6,342,699 — $ 6,987,473 — $ 6,987,473 (a) During the year ended December 31, 2017, Sirius XM completed a $480,000 investment in Pandora. We have elected the fair value option to account for this investment. Refer to Note 10 for information on this transaction. (b) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 11 for information related to the carrying value of our debt as of June 30, 2018 and December 31, 2017 . |
Schedule of new ASU adoption impact on financial statements | The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09 and ASU 2018-02 are included in the table below. Balance at Adjustments Due to ASU 2014-09 Adjustments Due to ASU 2018-02 Balance at January 1, 2018 Balance Sheet Assets Prepaid expenses and other current assets $ 129,669 $ 8,262 $ — $ 137,931 Other long-term assets 118,671 2,576 — 121,247 Deferred tax assets 505,528 (5,915 ) — 499,613 Liabilities: Accounts payable and accrued expenses 794,341 32,399 — 826,740 Current portion of deferred revenue 1,881,825 (41,902 ) — 1,839,923 Deferred revenue 174,579 (3,990 ) — 170,589 Equity: Accumulated deficit (3,243,473 ) 18,416 (4,013 ) (3,229,070 ) AOCI, net of tax 18,407 — 4,013 22,420 The following table illustrates the impact of adopting ASU 2014-09 on our unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income. For the Three Months Ended June 30, 2018 For the Six Months Ended June 30, 2018 As Reported Impact of Adopting ASU 2014-09 Balances Without Adoption of ASU 2014-09 As Reported Impact of Adopting ASU 2014-09 Balances Without Adoption of ASU 2014-09 Income Statement Revenues Subscriber revenue $ 1,138,962 $ 23,787 $ 1,162,749 $ 2,256,046 $ 48,179 $ 2,304,225 Expenses Revenue share and royalties 404,284 22,235 426,519 714,416 44,304 758,720 Subscriber acquisition costs 119,778 800 120,578 242,471 1,845 244,316 Income tax expense (70,570 ) (146 ) (70,716 ) (150,819 ) (418 ) (151,237 ) Net Income $ 292,352 $ 606 $ 292,958 $ 581,793 $ 1,612 $ 583,405 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share | For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income available to common stockholders for basic and diluted net income per common share $ 292,352 $ 202,109 $ 581,793 $ 409,182 Denominator: Weighted average common shares outstanding for basic net income per common share 4,481,930 4,652,426 4,486,620 4,681,223 Weighted average impact of dilutive equity instruments 107,165 83,166 102,366 78,518 Weighted average shares for diluted net income per common share 4,589,095 4,735,592 4,588,986 4,759,741 Net income per common share: Basic $ 0.07 $ 0.04 $ 0.13 $ 0.09 Diluted $ 0.06 $ 0.04 $ 0.13 $ 0.09 |
Receivables, net (Tables)
Receivables, net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Accounts receivable, net | Receivables, net, consists of the following: June 30, 2018 December 31, 2017 Gross customer accounts receivable $ 105,764 $ 100,342 Allowance for doubtful accounts (8,302 ) (9,500 ) Customer accounts receivable, net $ 97,462 $ 90,842 Receivables from distributors 121,407 121,410 Other receivables 28,279 29,475 Total receivables, net $ 247,148 $ 241,727 |
Inventory, net (Tables)
Inventory, net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of inventory, net | Inventory, net, consists of the following: June 30, 2018 December 31, 2017 Raw materials $ 5,615 $ 6,489 Finished goods 18,915 21,225 Allowance for obsolescence (5,563 ) (7,515 ) Total inventory, net $ 18,967 $ 20,199 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of indefinite-lived intangible assets | Our intangible assets include the following: June 30, 2018 December 31, 2017 Weighted Gross Accumulated Amortization Net Carrying Gross Accumulated Amortization Net Carrying Indefinite life intangible assets: FCC licenses Indefinite $ 2,083,654 $ — $ 2,083,654 $ 2,083,654 $ — $ 2,083,654 Trademarks Indefinite 250,800 — 250,800 250,800 — 250,800 Definite life intangible assets: Subscriber relationships 9 years — — — 380,000 (380,000 ) — OEM relationships 15 years 220,000 (68,444 ) 151,556 220,000 (61,111 ) 158,889 Licensing agreements 12 years 45,289 (36,193 ) 9,096 45,289 (34,350 ) 10,939 Software and technology 7 years 33,872 (17,857 ) 16,015 43,915 (25,351 ) 18,564 Total intangible assets $ 2,633,615 $ (122,494 ) $ 2,511,121 $ 3,023,658 $ (500,812 ) $ 2,522,846 |
Schedule of finite-lived intangible assets | Our intangible assets include the following: June 30, 2018 December 31, 2017 Weighted Gross Accumulated Amortization Net Carrying Gross Accumulated Amortization Net Carrying Indefinite life intangible assets: FCC licenses Indefinite $ 2,083,654 $ — $ 2,083,654 $ 2,083,654 $ — $ 2,083,654 Trademarks Indefinite 250,800 — 250,800 250,800 — 250,800 Definite life intangible assets: Subscriber relationships 9 years — — — 380,000 (380,000 ) — OEM relationships 15 years 220,000 (68,444 ) 151,556 220,000 (61,111 ) 158,889 Licensing agreements 12 years 45,289 (36,193 ) 9,096 45,289 (34,350 ) 10,939 Software and technology 7 years 33,872 (17,857 ) 16,015 43,915 (25,351 ) 18,564 Total intangible assets $ 2,633,615 $ (122,494 ) $ 2,511,121 $ 3,023,658 $ (500,812 ) $ 2,522,846 |
Years in which satellite licenses expire | The following table outlines the years in which each of our satellite licenses expires: FCC satellite licenses Expiration year SIRIUS FM-5 2025 SIRIUS FM-6 2022 XM-3 2021 XM-4 2022 XM-5 2018 |
Expected future amortization expense | The expected amortization expense for the remaining period in 2018 , each of the fiscal years 2019 through 2022 and for periods thereafter is as follows: Years ending December 31, Amount 2018 (remaining) $ 11,413 2019 22,701 2020 22,121 2021 16,678 2022 15,542 Thereafter 88,212 Total definite life intangible assets, net $ 176,667 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net | Property and equipment, net, consists of the following: June 30, 2018 December 31, 2017 Satellite system $ 1,586,794 $ 1,586,794 Terrestrial repeater network 124,904 123,254 Leasehold improvements 59,477 57,635 Broadcast studio equipment 101,338 96,582 Capitalized software and hardware 719,433 639,516 Satellite telemetry, tracking and control facilities 74,201 69,147 Furniture, fixtures, equipment and other 98,849 96,965 Land 38,411 38,411 Building 61,844 61,824 Construction in progress 347,196 301,153 Total property and equipment 3,212,447 3,071,281 Accumulated depreciation and amortization (1,743,517 ) (1,608,515 ) Property and equipment, net $ 1,468,930 $ 1,462,766 |
Summary of orbiting satellites | The chart below provides certain information on our satellites as of June 30, 2018 : Satellite Description Year Delivered Estimated End of SIRIUS FM-5 2009 2024 SIRIUS FM-6 2013 2028 XM-3 2005 2020 XM-4 2006 2021 XM-5 2010 2025 |
Construction in progress | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net | Construction in progress consists of the following: June 30, 2018 December 31, 2017 Satellite system $ 231,047 $ 183,243 Terrestrial repeater network 2,972 2,515 Capitalized software and hardware 95,555 94,456 Other 17,622 20,939 Construction in progress $ 347,196 $ 301,153 |
Related Party Transactions (Tab
Related Party Transactions (Tables) - Equity Method Investee | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |
Summary of related party balances | We had the following related party balances associated with Sirius XM Canada: June 30, 2018 December 31, 2017 Related party current assets $ 13,692 $ 10,284 Related party long-term assets $ 453,416 $ 481,608 Related party current liabilities $ 4,103 $ 2,839 Related party long-term liabilities $ 6,269 $ 7,364 |
Schedule of related party revenues and other income | We recorded the following revenue and other income associated with Sirius XM Canada in our unaudited consolidated statements of comprehensive income: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Revenue (a)(b) $ 23,273 $ 28,129 $ 47,370 $ 40,345 Other income Share of net earnings (b) $ (896 ) $ (5,197 ) $ 85 $ (2,183 ) Interest income (c) $ 2,557 $ 803 $ 5,204 $ 803 (a) Prior to the Transaction, under our former agreements with Sirius XM Canada, we received a percentage-based fee of 10% and 15% for certain types of subscription revenue earned by Sirius XM Canada for the use of the Sirius and XM platforms, respectively, and additional fees for premium services and fees for activation fees and reimbursements for other charges. We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income. (b) Prior to the Transaction, we recognized our proportionate share of revenue and earnings or losses attributable to Sirius XM Canada on a one month lag. As a result of the Transaction, there is no longer a one -month lag and Sirius XM Canada changed its fiscal year-end to December 31 to align with us. For the three and six months ended June 30, 2018 , Share of net earnings included $611 and $1,234 , respectively, of amortization related to equity method intangible assets. (c) This interest income relates to the loan to Sirius XM Canada and is recorded as Other income in our unaudited consolidated statements of comprehensive income. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Our debt as of June 30, 2018 and December 31, 2017 consisted of the following: Carrying value (a) at Issuer / Borrower Issued Debt Maturity Date Interest Payable Principal Amount at June 30, 2018 June 30, 2018 December 31, 2017 Sirius XM July 2017 3.875% Senior Notes August 1, 2022 semi-annually on February 1 and August 1 $ 1,000,000 $ 992,811 $ 992,011 Sirius XM May 2013 4.625% Senior Notes May 15, 2023 semi-annually on May 15 and November 15 500,000 496,923 496,646 Sirius XM May 2014 6.00% Senior Notes July 15, 2024 semi-annually on January 15 and July 15 1,500,000 1,488,758 1,488,002 Sirius XM March 2015 5.375% Senior Notes April 15, 2025 semi-annually on April 15 and October 15 1,000,000 991,777 991,285 Sirius XM May 2016 5.375% Senior Notes July 15, 2026 semi-annually on January 15 and July 15 1,000,000 990,597 990,138 Sirius XM July 2017 5.00% Senior Notes August 1, 2027 semi-annually on February 1 and August 1 1,500,000 1,486,728 1,486,162 Sirius XM December 2012 Senior Secured Revolving Credit Facility (the "Credit Facility") June 29, 2023 variable fee paid quarterly 1,750,000 — 300,000 Sirius XM Various Capital leases Various n/a n/a 8,324 10,597 Total Debt 6,455,918 6,754,841 Less: total current maturities 4,660 5,105 Less: total deferred financing costs for Notes 7,969 8,493 Total long-term debt $ 6,443,289 $ 6,741,243 (a) The carrying value of the obligations is net of any remaining unamortized original issue discount. (b) Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes. (c) In June 2018, Sirius XM entered into an amendment to extend the maturity of the Credit Facility to June 2023. Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries. Interest on borrowings is payable on a monthly basis and accrues at a rate based on LIBOR plus an applicable rate. Sirius XM is also required to pay a variable fee on the average daily unused portion of the Credit Facility which is payable on a quarterly basis. The variable rate for the unused portion of the Credit Facility was 0.25% per annum as of June 30, 2018 . All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our unaudited consolidated balance sheets due to the long-term maturity of this debt. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of dividends declared | During the six months ended June 30, 2018 , our board of directors declared the following dividends: Declaration Date Dividend Per Share Record Date Total Amount Payment Date January 23, 2018 $ 0.011 February 7, 2018 $ 49,397 February 28, 2018 April 26, 2018 $ 0.011 May 10, 2018 $ 49,287 May 31, 2018 |
Schedule of repurchase agreements | The following table summarizes our total share repurchase activity for the six months ended: June 30, 2018 June 30, 2017 Share Repurchase Type Shares Amount Shares Amount Open Market 55,843 $ 317,061 155,711 $ 775,701 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Fair value of options granted | The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors: For the Three Months Ended June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Risk-free interest rate 2.6% 1.6% 2.5% 1.6% Expected life of options — years 3.48 4.35 3.54 4.07 Expected stock price volatility 22% 26% 22% 26% Expected dividend yield 0.6% 0.8% 0.7% 0.8% |
Stock options activity under share-based payment plans | The following table summarizes stock option activity under our share-based plans for the six months ended June 30, 2018 : Options Weighted- Weighted- Aggregate Outstanding as of December 31, 2017 280,457 $ 3.76 Granted 10,617 $ 6.44 Exercised (41,644 ) $ 3.18 Forfeited, cancelled or expired (1,926 ) $ 4.48 Outstanding as of June 30, 2018 247,504 $ 3.96 6.40 $ 695,499 Exercisable as of June 30, 2018 115,544 $ 3.40 5.30 $ 389,015 |
Summary of restricted stock unit and stock award activity | The following table summarizes the restricted stock unit, including PRSU, activity under our share-based plans for the six months ended June 30, 2018 : Shares Grant Date Nonvested as of December 31, 2017 31,323 $ 4.54 Granted 7,123 $ 6.27 Vested (3,518 ) $ 3.92 Forfeited (569 ) $ 4.80 Nonvested as of June 30, 2018 34,359 $ 4.93 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Expected contractual cash commitments | The following table summarizes our expected contractual cash commitments as of June 30, 2018 : 2018 2019 2020 2021 2022 Thereafter Total Debt obligations $ 2,455 $ 3,935 $ 1,207 $ 727 $ 1,000,000 $ 5,500,000 $ 6,508,324 Cash interest payments 168,407 338,887 338,844 338,817 338,811 919,243 2,443,009 Satellite and transmission 59,557 94,922 51,056 4,347 2,428 4,288 216,598 Programming and content 136,122 251,953 207,728 118,706 52,475 162,938 929,922 Sales and marketing 9,990 12,817 7,701 7,446 1,644 203 39,801 Satellite incentive payments 8,001 10,652 10,197 8,574 8,558 61,767 107,749 Operating lease obligations 19,499 44,983 42,779 37,416 34,096 143,628 322,401 Royalties and other 230,132 139,285 103,414 86,253 23,199 33 582,316 Total (1) $ 634,163 $ 897,434 $ 762,926 $ 602,286 $ 1,461,211 $ 6,792,100 $ 11,150,120 (1) The table does not include our reserve for uncertain tax positions, which at June 30, 2018 totaled $15,344 . |
Business & Basis of Presentat36
Business & Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2018segmentsatellite_radio_system | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of satellite radio systems | satellite_radio_system | 2 |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |
Number of reportable segments | segment | 1 |
Liberty Media | Common Stock | Management | |
Related Party Transactions [Abstract] | |
Related party ownership percentage | 70.00% |
Minimum | |
Related Party Transaction [Line Items] | |
Length of prepaid subscriptions, term | 3 months |
Maximum | |
Related Party Transaction [Line Items] | |
Length of prepaid subscriptions, term | 12 months |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Liabilities: | |||
Debt | $ 6,342,699 | $ 6,987,473 | |
Investment in convertible preferred stock | 6,138 | $ 302,526 | |
Level 1 | |||
Liabilities: | |||
Debt | 0 | 0 | |
Level 2 | |||
Liabilities: | |||
Debt | 6,342,699 | 6,987,473 | |
Level 3 | |||
Liabilities: | |||
Debt | 0 | 0 | |
Pandora | |||
Assets: | |||
Fair value of investment | 597,921 | 480,472 | |
Pandora | Investee | |||
Liabilities: | |||
Investment in convertible preferred stock | 480,000 | ||
Pandora | Level 1 | |||
Assets: | |||
Fair value of investment | 0 | 0 | |
Pandora | Level 2 | |||
Assets: | |||
Fair value of investment | 597,921 | 480,472 | |
Pandora | Level 3 | |||
Assets: | |||
Fair value of investment | $ 0 | $ 0 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Stockholders’ (deficit) equity | $ (1,370,568) | $ (1,370,568) | $ (1,523,874) | |||
Foreign currency translation adjustment, net of tax | 8,242 | $ (2,763) | 17,826 | $ (2,746) | ||
Foreign currency translation adjustment, tax | 2,663 | 5,735 | ||||
Accumulated other comprehensive income, net of tax | 4,594 | $ 4,594 | $ 22,420 | 18,407 | ||
Activation fee revenue recognition period | 1 month | |||||
Accumulated deficit | (2,647,277) | $ (2,647,277) | (3,229,070) | (3,243,473) | ||
Adjustments Due to ASU 2018-02 | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive income, net of tax | 4,013 | |||||
Accumulated deficit | (4,013) | |||||
Adjustments Due to ASU 2014-09 | Impact of Adopting ASU 2014-09 | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive income, net of tax | 0 | |||||
Accumulated deficit | 18,416 | |||||
Adjustments Due to ASU 2014-09 | Impact of Adopting ASU 2014-09 | Activation Fees | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Reduction in deferred revenue | 8,260 | |||||
Accumulated deficit | 8,260 | |||||
Adjustments Due to ASU 2014-09 | Impact of Adopting ASU 2014-09 | Loyalty Payments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated deficit | 10,156 | |||||
Prepaid expenses and other current assets | $ 10,156 | |||||
Accumulated Other Comprehensive Income (Loss) | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Stockholders’ (deficit) equity | $ 4,594 | $ 4,594 | $ 18,407 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Cumulative Effect of Adoption of ASUs on the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Prepaid expenses and other current assets | $ 138,015 | $ 137,931 | $ 129,669 |
Other long-term assets | 128,543 | 121,247 | 118,671 |
Deferred tax assets | 371,303 | 499,613 | 505,528 |
Liabilities: | |||
Accounts payable and accrued expenses | 871,373 | 826,740 | 794,341 |
Current portion of deferred revenue | 1,935,326 | 1,839,923 | 1,881,825 |
Deferred revenue | 160,286 | 170,589 | 174,579 |
Equity: | |||
Accumulated deficit | (2,647,277) | (3,229,070) | (3,243,473) |
Accumulated other comprehensive income, net of tax | $ 4,594 | 22,420 | 18,407 |
Adjustments Due to ASU 2018-02 | |||
Assets | |||
Prepaid expenses and other current assets | 0 | ||
Other long-term assets | 0 | ||
Deferred tax assets | 0 | ||
Liabilities: | |||
Accounts payable and accrued expenses | 0 | ||
Current portion of deferred revenue | 0 | ||
Deferred revenue | 0 | ||
Equity: | |||
Accumulated deficit | (4,013) | ||
Accumulated other comprehensive income, net of tax | 4,013 | ||
Balances Without Adoption of ASU 2014-09 | |||
Assets | |||
Prepaid expenses and other current assets | 129,669 | ||
Other long-term assets | 118,671 | ||
Deferred tax assets | 505,528 | ||
Liabilities: | |||
Accounts payable and accrued expenses | 794,341 | ||
Current portion of deferred revenue | 1,881,825 | ||
Deferred revenue | 174,579 | ||
Equity: | |||
Accumulated deficit | (3,243,473) | ||
Accumulated other comprehensive income, net of tax | $ 18,407 | ||
Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09 | |||
Assets | |||
Prepaid expenses and other current assets | 8,262 | ||
Other long-term assets | 2,576 | ||
Deferred tax assets | (5,915) | ||
Liabilities: | |||
Accounts payable and accrued expenses | 32,399 | ||
Current portion of deferred revenue | (41,902) | ||
Deferred revenue | (3,990) | ||
Equity: | |||
Accumulated deficit | 18,416 | ||
Accumulated other comprehensive income, net of tax | $ 0 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Impact of ASU 2014-09 in the Unaudited Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Total revenue | $ 1,432,299 | $ 1,347,569 | $ 2,807,401 | $ 2,641,635 |
Expenses | ||||
Subscriber acquisition costs | 119,778 | 125,154 | 242,471 | 252,642 |
Income tax expense | (70,570) | (119,513) | (150,819) | (233,486) |
Net income | 292,352 | 202,109 | 581,793 | 409,182 |
Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09 | ||||
Expenses | ||||
Subscriber acquisition costs | 800 | 1,845 | ||
Income tax expense | (146) | (418) | ||
Net income | 606 | 1,612 | ||
Balances Without Adoption of ASU 2014-09 | ||||
Expenses | ||||
Subscriber acquisition costs | 120,578 | 244,316 | ||
Income tax expense | (70,716) | (151,237) | ||
Net income | 292,958 | 583,405 | ||
Subscriber revenue | ||||
Revenues | ||||
Total revenue | 1,138,962 | 1,111,011 | 2,256,046 | 2,189,268 |
Subscriber revenue | Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09 | ||||
Revenues | ||||
Total revenue | 23,787 | 48,179 | ||
Subscriber revenue | Balances Without Adoption of ASU 2014-09 | ||||
Revenues | ||||
Total revenue | 1,162,749 | 2,304,225 | ||
Revenue share and royalties | ||||
Expenses | ||||
Cost of services | 404,284 | $ 292,893 | 714,416 | $ 570,193 |
Revenue share and royalties | Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09 | ||||
Expenses | ||||
Cost of services | 22,235 | 44,304 | ||
Revenue share and royalties | Balances Without Adoption of ASU 2014-09 | ||||
Expenses | ||||
Cost of services | $ 426,519 | $ 758,720 |
Revenues - Additional Informati
Revenues - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |
Contract period (or less) | 1 year |
Activation fee revenue recognition period | 1 month |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Data trial contract period | 3 years |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Percent of deferred revenue related to long-term contracts | 10.00% |
Data trial contract period | 5 years |
Subscription prepayment period | 3 years |
Prepaid Vehicle Subscriptions [Member] | Minimum | |
Disaggregation of Revenue [Line Items] | |
Contract period (or less) | 3 months |
Prepaid Vehicle Subscriptions [Member] | Maximum | |
Disaggregation of Revenue [Line Items] | |
Contract period (or less) | 12 months |
Earnings per Share - Additional
Earnings per Share - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Participating securities (in shares) | 0 | 0 | 0 | 0 |
Anti-dilutive common stock equivalents (in shares) | 24,191,000 | 35,468,000 | 45,032,000 | 35,447,000 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net income available to common stockholders for basic and diluted net income per common share | $ 292,352 | $ 202,109 | $ 581,793 | $ 409,182 |
Denominator: | ||||
Weighted average common shares outstanding for basic net income per common share (in shares) | 4,481,930 | 4,652,426 | 4,486,620 | 4,681,223 |
Weighted average impact of dilutive equity instruments (in shares) | 107,165 | 83,166 | 102,366 | 78,518 |
Weighted average shares for diluted net income per common share (in shares) | 4,589,095 | 4,735,592 | 4,588,986 | 4,759,741 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.04 | $ 0.13 | $ 0.09 |
Diluted (in dollars per share) | $ 0.06 | $ 0.04 | $ 0.13 | $ 0.09 |
Receivables, net (Details)
Receivables, net (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts receivable, net | ||
Gross customer accounts receivable | $ 105,764 | $ 100,342 |
Allowance for doubtful accounts | (8,302) | (9,500) |
Customer accounts receivable, net | 97,462 | 90,842 |
Receivables from distributors | 121,407 | 121,410 |
Other receivables | 28,279 | 29,475 |
Total receivables, net | $ 247,148 | $ 241,727 |
Inventory, net (Details)
Inventory, net (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,615 | $ 6,489 |
Finished goods | 18,915 | 21,225 |
Allowance for obsolescence | (5,563) | (7,515) |
Total inventory, net | $ 18,967 | $ 20,199 |
Goodwill (Details)
Goodwill (Details) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)reporting_unit | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||
Number of reporting units | 1 | 1 | |||||
Stockholders’ (deficit) equity | $ (1,370,568,000) | $ (1,370,568,000) | $ (1,370,568,000) | $ (1,370,568,000) | $ (1,523,874,000) | ||
Goodwill | 2,286,582,000 | 2,286,582,000 | 2,286,582,000 | 2,286,582,000 | $ 2,286,582,000 | ||
Impairment losses for goodwill | 0 | $ 0 | 0 | $ 0 | |||
Accumulated impairment of goodwill since the merger | $ 4,766,190,000 | $ 4,766,190,000 | $ 4,766,190,000 | $ 4,766,190,000 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Definite life intangible assets: | ||
Accumulated Amortization | $ (122,494) | $ (500,812) |
Net Carrying Value | 176,667 | |
Gross Carrying Value | ||
Total intangible assets | 2,633,615 | 3,023,658 |
Net Carrying Value | ||
Total intangible assets | 2,511,121 | 2,522,846 |
FCC licenses | ||
Indefinite life intangible assets: | ||
Gross Carrying Value | 2,083,654 | 2,083,654 |
Net Carrying Value | 2,083,654 | 2,083,654 |
Trademarks | ||
Indefinite life intangible assets: | ||
Gross Carrying Value | 250,800 | 250,800 |
Net Carrying Value | $ 250,800 | 250,800 |
Subscriber relationships | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 9 years | |
Gross Carrying Value | $ 0 | 380,000 |
Accumulated Amortization | 0 | (380,000) |
Net Carrying Value | $ 0 | 0 |
OEM relationships | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 15 years | |
Gross Carrying Value | $ 220,000 | 220,000 |
Accumulated Amortization | (68,444) | (61,111) |
Net Carrying Value | $ 151,556 | 158,889 |
Licensing agreements | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 12 years | |
Gross Carrying Value | $ 45,289 | 45,289 |
Accumulated Amortization | (36,193) | (34,350) |
Net Carrying Value | $ 9,096 | 10,939 |
Software and technology | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 7 years | |
Gross Carrying Value | $ 33,872 | 43,915 |
Accumulated Amortization | (17,857) | (25,351) |
Net Carrying Value | $ 16,015 | $ 18,564 |
Intangible Assets - Indefinite
Intangible Assets - Indefinite Life Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | $ 0 | $ 0 | $ 0 |
Intangible Assets - Definite Li
Intangible Assets - Definite Life Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 5,863,000 | $ 12,098,000 | $ 11,725,000 | $ 23,626,000 |
Retired | ||||
Definite life intangible assets: | ||||
Intangible assets | $ 390,043,000 | $ 0 | $ 390,043,000 | $ 0 |
Intangible Assets - Expected Am
Intangible Assets - Expected Amortization Expense for Each of the Fiscal Years (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Expected amortization expense for each of the fiscal years | |
2018 (remaining) | $ 11,413 |
2,019 | 22,701 |
2,020 | 22,121 |
2,021 | 16,678 |
2,022 | 15,542 |
Thereafter | 88,212 |
Net Carrying Value | $ 176,667 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,212,447 | $ 3,071,281 |
Accumulated depreciation and amortization | (1,743,517) | (1,608,515) |
Property and equipment, net | 1,468,930 | 1,462,766 |
Satellite system | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,586,794 | 1,586,794 |
Terrestrial repeater network | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 124,904 | 123,254 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 59,477 | 57,635 |
Broadcast studio equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 101,338 | 96,582 |
Capitalized software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 719,433 | 639,516 |
Satellite telemetry, tracking and control facilities | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 74,201 | 69,147 |
Furniture, fixtures, equipment and other | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 98,849 | 96,965 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 38,411 | 38,411 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 61,844 | 61,824 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 347,196 | $ 301,153 |
Property and Equipment - Sche52
Property and Equipment - Schedule of Construction in Progress (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Construction in progress | $ 347,196 | $ 301,153 |
Satellite system | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 231,047 | 183,243 |
Terrestrial repeater network | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 2,972 | 2,515 |
Capitalized software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 95,555 | 94,456 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | $ 17,622 | $ 20,939 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($)satellite | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)satellite | Jun. 30, 2017USD ($) | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense on property and equipment | $ 68,760,000 | $ 61,421,000 | $ 135,110,000 | $ 126,597,000 |
Disposal of property and equipment | 0 | 14,760,000 | ||
Capitalized interest costs | $ 2,901,000 | $ 1,005,000 | $ 5,155,000 | $ 1,723,000 |
Number of owned satellites | satellite | 5 | 5 |
Related Party Transactions - Li
Related Party Transactions - Liberty Media, Sirius XM Canada - Additional Information (Details) $ / shares in Units, $ / shares in Units, shares in Thousands, $ in Thousands | May 25, 2017CAD ($) | Jun. 30, 2018USD ($)directorexecutive$ / sharesshares | Jun. 30, 2017USD ($) | May 24, 2017shareholder | Jun. 30, 2018USD ($)directorexecutive$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)shares | Jun. 30, 2018$ / shares | Jan. 01, 2018USD ($) | May 25, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||||||
Preferred stock liquidation preference per share (in Canadian dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||
Current portion of deferred revenue | $ 1,935,326 | $ 1,935,326 | $ 1,881,825 | $ 1,839,923 | ||||||
Deferred revenue, noncurrent | $ 160,286 | $ 160,286 | 174,579 | $ 170,589 | ||||||
Management | Liberty Media | Executives | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of related party members on the board of directors | executive | 2 | 2 | ||||||||
Management | Liberty Media | Director | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of related party members on the board of directors | director | 1 | 1 | ||||||||
Management | Liberty Media | Common Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party ownership percentage | 70.00% | 70.00% | ||||||||
Equity Method Investee | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Notes receivable, related parties | $ 130,794 | |||||||||
Notes receivable, maturity period | 15 years | |||||||||
Interest rate | 7.62% | |||||||||
Annual principal repayment period | 60 days | |||||||||
Annual prepayment cash threshold | $ 10,000,000 | |||||||||
Notes receivable, repayment from related party | $ 3,242 | |||||||||
Current portion of deferred revenue | $ 2,776 | 2,776 | 2,776 | |||||||
Deferred revenue, noncurrent | $ 3,700 | $ 3,700 | $ 5,088 | |||||||
Equity Method Investee | Services Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Period of agreement | 30 years | |||||||||
Equity Method Investee | Services Agreement, Years 1 Through 5 | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percent of gross revenue receivable | 25.00% | |||||||||
Equity Method Investee | Services Agreement, Years 6 Through 30 | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percent of gross revenue receivable | 30.00% | |||||||||
Equity Method Investee | Advisory Services Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percent of gross revenue receivable | 5.00% | |||||||||
Equity Method Investee | Common Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Issuance of common stock as part of recapitalization of Sirius XM Canada (in shares) | shares | 35,000 | |||||||||
Equity Method Investee | Sirius XM Canada | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity method investment, equity interest | 70.00% | 70.00% | ||||||||
Equity method investment, voting interest | 33.00% | 33.00% | ||||||||
Number of shareholders | shareholder | 2 | |||||||||
Consideration transferred | $ 308,526 | |||||||||
Payments to acquire equity method investments | 129,676 | |||||||||
Consideration transferred, equity interests issued and issuable | 178,850 | |||||||||
Number of preferred shares owned (in shares) | shares | 590,950 | 590,950 | ||||||||
Preferred stock liquidation preference per share (in Canadian dollars per share) | $ / shares | $ 1 | |||||||||
Notes receivable, related parties | $ 130,190 | $ 130,190 | 140,073 | |||||||
Equity method investments | 323,226 | 323,226 | $ 341,214 | |||||||
Equity method investment, dividends, including reduction of investment | $ 408 | $ 0 | $ 1,439 | $ 3,796 |
Related Party Transactions - Su
Related Party Transactions - Summary of Related Party Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Related party current assets | $ 13,692 | $ 10,284 |
Related party long-term assets | 1,051,337 | 962,080 |
Related party current liabilities | 4,103 | 2,839 |
Related party long-term liabilities | 6,269 | 7,364 |
Equity Method Investee | Sirius XM Canada | ||
Related Party Transaction [Line Items] | ||
Related party current assets | 13,692 | 10,284 |
Related party long-term assets | 453,416 | 481,608 |
Related party current liabilities | 4,103 | 2,839 |
Related party long-term liabilities | $ 6,269 | $ 7,364 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Revenue and Other Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other income | ||||
Share of net earnings | $ (64) | $ (2,183) | ||
Sirius XM Canada | Equity Method Investee | ||||
Related Party Transaction [Line Items] | ||||
Revenue | $ 23,273 | $ 28,129 | 47,370 | 40,345 |
Other income | ||||
Share of net earnings | (896) | (5,197) | 85 | (2,183) |
Interest income | $ 2,557 | $ 803 | $ 5,204 | $ 803 |
Related Party Transactions - 57
Related Party Transactions - Schedule of Related Party Revenue and Other Income, Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | May 24, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related Party Transaction [Line Items] | |||||
Amortization of intangible assets | $ 5,863 | $ 12,098 | $ 11,725 | $ 23,626 | |
Sirius XM Canada | Equity Method Investee | |||||
Related Party Transaction [Line Items] | |||||
Earning recognition lag period | 1 month | ||||
Amortization of intangible assets | $ 611 | $ 1,234 | |||
Sirius XM Canada | Equity Method Investee | Sirius Platform | |||||
Related Party Transaction [Line Items] | |||||
Percentage-based fee | 10.00% | ||||
Sirius XM Canada | Equity Method Investee | X M Platform | |||||
Related Party Transaction [Line Items] | |||||
Percentage-based fee | 15.00% |
Related Party Transactions - Pa
Related Party Transactions - Pandora (Details) $ / shares in Units, $ in Thousands | Sep. 22, 2017USD ($)$ / sharesshares | Dec. 31, 2020trading_day$ / shares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2018USD ($)director$ / sharesshares | Jun. 30, 2017USD ($) | Jun. 09, 2022 | Sep. 22, 2020 | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||||
Investment in convertible preferred stock | $ 6,138 | $ 302,526 | ||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||
Pandora | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fair value of investment | $ 597,921 | $ 597,921 | $ 480,472 | |||||
Pandora | Level 2 | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fair value of investment | $ 597,921 | $ 597,921 | $ 480,472 | |||||
Pandora | Series A Preferred Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of shares issued (in shares) | shares | 480,000 | |||||||
Investee | Pandora | ||||||||
Related Party Transaction [Line Items] | ||||||||
Investment in convertible preferred stock | $ 480,000 | |||||||
Investment ownership percentage | 18.00% | 18.00% | ||||||
Ownership percentage on an as-converted basis | 15.00% | 15.00% | ||||||
Accrued dividends | $ 25,684 | $ 25,684 | ||||||
Unrealized gain on investment | $ 86,074 | $ 117,449 | ||||||
Minimum ownership percentage for director designation, converted basis | 50.00% | 50.00% | ||||||
Minimum ownership percentage for designation of two directors, converted basis | 75.00% | 75.00% | ||||||
Number of directors designated | director | 2 | |||||||
Investee | Pandora | Series A Preferred Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||
Price per share (in dollars per share) | $ / shares | $ 10.50 | $ 10.50 | ||||||
Common shares issued upon conversion (in shares) | shares | 95.2381 | 95.2381 | ||||||
Preferred stock dividend rate, percentage | 6.00% | |||||||
Liquidation preference | $ 505,684 | $ 505,684 | ||||||
Percentage of liquidation preference | 100.00% | |||||||
Investee | Pandora | Series A Preferred Stock | Forecast | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of liquidation preference | 100.00% | 100.00% | ||||||
Convertible preferred stock, stock trigger price (in dollars per share) | $ / shares | $ 18.375 | |||||||
Convertible preferred stock, threshold trading days | trading_day | 20 | |||||||
Convertible preferred stock, threshold consecutive trading days | trading_day | 30 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Debt | ||
Capital leases | $ 8,324,000 | $ 10,597,000 |
Total debt | 6,455,918,000 | 6,754,841,000 |
Less: total current maturities | 4,660,000 | 5,105,000 |
Less: total deferred financing costs for Notes | 7,969,000 | 8,493,000 |
Total long-term debt | 6,443,289,000 | 6,741,243,000 |
Senior Secured Revolving Credit Facility | ||
Debt | ||
Principal Amount | 1,750,000,000 | |
Carrying value | $ 0 | 300,000,000 |
Senior Notes | 3.875% Senior Notes Due 2022 | ||
Debt | ||
Stated interest rate | 3.875% | |
Principal Amount | $ 1,000,000,000 | |
Carrying value | $ 992,811,000 | 992,011,000 |
Senior Notes | 4.625% Senior Notes Due 2023 | ||
Debt | ||
Stated interest rate | 4.625% | |
Principal Amount | $ 500,000,000 | |
Carrying value | $ 496,923,000 | 496,646,000 |
Senior Notes | 6.00% Senior Note Due 2024 | ||
Debt | ||
Stated interest rate | 6.00% | |
Principal Amount | $ 1,500,000,000 | |
Carrying value | $ 1,488,758,000 | 1,488,002,000 |
Senior Notes | 5.375% Senior Notes Due 2025 | ||
Debt | ||
Stated interest rate | 5.375% | |
Principal Amount | $ 1,000,000,000 | |
Carrying value | $ 991,777,000 | 991,285,000 |
Senior Notes | 5.375% Senior Notes Due 2026 | ||
Debt | ||
Stated interest rate | 5.375% | |
Principal Amount | $ 1,000,000,000 | |
Carrying value | $ 990,597,000 | 990,138,000 |
Senior Notes | 5.00% Senior Notes Due 2027 | ||
Debt | ||
Stated interest rate | 5.00% | |
Principal Amount | $ 1,500,000,000 | |
Carrying value | $ 1,486,728,000 | $ 1,486,162,000 |
Debt - Schedule of Long-term 60
Debt - Schedule of Long-term Debt Instruments Additional Information (Details) | Jun. 30, 2018 |
Senior Secured Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Credit facility, unused capacity, commitment fee percentage | 0.25% |
Debt - Additional Information (
Debt - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Senior Secured Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Maximum consolidated leverage ratio | 5 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Equity [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 9,000,000,000 | 9,000,000,000 |
Common stock, shares issued (in shares) | 4,485,774,000 | 4,530,928,000 |
Common stock, shares outstanding (in shares) | 4,485,774,000 | 4,527,742,000 |
Common stock reserved for issuance (in shares) | 281,863,000 |
Stockholders' Equity - Quarterl
Stockholders' Equity - Quarterly Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 26, 2018 | Jan. 23, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Equity [Abstract] | ||||||
Dividends Per Share (in dollars per share) | $ 0.011 | $ 0.011 | $ 0.011 | $ 0.010 | $ 0.022 | $ 0.02 |
Total Amount | $ 49,287 | $ 49,397 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) shares in Thousands | Jun. 30, 2018USD ($)shares |
Class of Stock [Line Items] | |
Number of shares repurchased (in shares) | shares | 2,529,978 |
Aggregate cost for shares repurchased | $ 9,694,181,000 |
Remaining amount authorized under the stock repurchase program | 2,305,819,000 |
Common Stock | |
Class of Stock [Line Items] | |
Stock repurchase program, aggregate authorized amount | $ 12,000,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Repurchase Agreements (Details) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Shares Repurchase Activity [Line Items] | |||
Amount | $ 317,061 | ||
Treasury stock value | $ 0 | $ 17,154 | |
Open Market | |||
Shares Repurchase Activity [Line Items] | |||
Shares (in shares) | 55,843 | 155,711 | |
Amount | $ 317,061 | $ 775,701 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Jun. 30, 2018 | Jun. 30, 2017 |
Equity [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Undesignated preferred stock authorized (in shares) | 50,000,000 | |
Preferred stock liquidation preference per share (in dollars per share) | $ 0.001 | |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)plan$ / sharesshares | Jun. 30, 2017USD ($)shares | Dec. 31, 2017USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment expense | $ 36,215 | $ 30,251 | $ 70,448 | $ 59,697 | |
Number of other share-based benefit plans | plan | 3 | ||||
Options granted (in shares) | shares | 0 | 0 | |||
Deferred compensation contributions | 307 | 334 | $ 7,138 | $ 7,355 | |
Fair value of investment assets related to deferred compensation plan | 22,375 | 22,375 | $ 14,641 | ||
Unrealized gain (loss) on investments | $ 0 | 0 | |||
Sirius XM Savings Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Minimum of employee contributions of pre-tax eligible earnings to Company 401(k) Savings Plan | 1.00% | ||||
Maximum of employee contributions of pre-tax eligible earnings to Company 401(k) Savings Plan | 50.00% | ||||
Percent of Company match of employee's voluntary contributions | 50.00% | ||||
Percent of employee's pre-tax salary | 6.00% | ||||
Maximum annual contributions per employee, percent | 3.00% | ||||
Vesting percentage of employer contributions for each year of employment | 33.33% | ||||
Savings plan, fully vested period | 3 years | ||||
Recognized cost | 2,159 | 1,835 | $ 4,028 | 3,517 | |
Employees and Non Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment expense | 20,776 | 20,125 | $ 40,435 | 39,637 | |
Weighted average grant date fair value of options granted (in dollars per share) | $ / shares | $ 1.19 | ||||
Total intrinsic value of stock options exercised | $ 139,812 | 47,572 | |||
Number of net settled shares issued as a result of exercise of stock options and vesting of restricted stock units (in shares) | shares | 12,054,000 | ||||
Restricted Stock Units (RSUs) and Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment expense | 15,439 | $ 10,126 | $ 30,013 | 20,060 | |
Total intrinsic value of restricted stock units and stock awards vested | $ 22,656 | $ 4,802 | |||
Shares granted (in shares) | shares | 7,123,000 | ||||
Incremental shares granted (in shares) | shares | 126,000 | ||||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of net settled shares issued as a result of exercise of stock options and vesting of restricted stock units (in shares) | shares | 1,821,000 | ||||
Performance-based Share Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Shares granted (in shares) | shares | 3,768,000 | ||||
Restricted Stock Units RSU and Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total unrecognized compensation costs related to unvested share based payment awards for restricted stock units, net of estimated forfeitures | $ 251,588 | $ 251,588 | $ 241,521 | ||
Weighted average expected period for recognition of compensation expenses | 1 year 8 months 19 days | ||||
2015 Long Term Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock conversion to common stock | 1 | ||||
Common stock available for future grants (in shares) | shares | 171,619,000 | 171,619,000 | |||
2015 Long Term Stock Incentive Plan | Employees and Non Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option expiration period | 10 years | ||||
2015 Long Term Stock Incentive Plan | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
2015 Long Term Stock Incentive Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years |
Benefit Plans - Fair Value of O
Benefit Plans - Fair Value of Options Granted (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Retirement Benefits [Abstract] | ||||
Risk-free interest rate | 2.60% | 1.60% | 2.50% | 1.60% |
Expected life of options — years | 3 years 5 months 23 days | 4 years 4 months 6 days | 3 years 6 months 15 days | 4 years 26 days |
Expected stock price volatility | 22.00% | 26.00% | 22.00% | 26.00% |
Expected dividend yield | 0.60% | 0.80% | 0.70% | 0.80% |
Benefit Plans - Stock Options A
Benefit Plans - Stock Options Activity Under Share-Based Payment Plans (Details) - Employees and Non Employee Stock Option $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Options | |
Outstanding as of beginning of period (in shares) | shares | 280,457 |
Granted (in shares) | shares | 10,617 |
Exercised (in shares) | shares | (41,644) |
Forfeited, cancelled or expired (in shares) | shares | (1,926) |
Outstanding as of end of period (in shares) | shares | 247,504 |
Exercisable (in shares) | shares | 115,544 |
Weighted- Average Exercise Price Per Share | |
Outstanding as of beginning of period (in dollars per share) | $ / shares | $ 3.76 |
Granted (in dollars per share) | $ / shares | 6.44 |
Exercised (in dollars per share) | $ / shares | 3.18 |
Forfeited, cancelled or expired (in dollars per share) | $ / shares | 4.48 |
Outstanding as of end of period (in dollars per share) | $ / shares | 3.96 |
Exercisable (in dollars per share) | $ / shares | $ 3.40 |
Weighted- Average Remaining Contractual Term (Years) | |
Outstanding | 6 years 4 months 24 days |
Exercisable | 5 years 3 months 18 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 695,499 |
Exercisable | $ | $ 389,015 |
Benefit Plans - Summary of Rest
Benefit Plans - Summary of Restricted Stock Unit and Stock Award Activity (Details) - Restricted Stock Units (RSUs) and Performance Shares shares in Thousands | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Shares | |
Nonvested as of beginning of period (in shares) | shares | 31,323 |
Granted (in shares) | shares | 7,123 |
Vested (in shares) | shares | (3,518) |
Forfeited (in shares) | shares | (569) |
Nonvested as of end of period (in shares) | shares | 34,359 |
Grant Date Fair Value Per Share | |
Nonvested as of beginning of period (in dollars per share) | $ / shares | $ 4.54 |
Granted (in dollars per share) | $ / shares | 6.27 |
Vested (in dollars per share) | $ / shares | 3.92 |
Forfeited (in dollars per share) | $ / shares | 4.80 |
Nonvested as of end of period (in dollars per share) | $ / shares | $ 4.93 |
Commitments and Contingencies -
Commitments and Contingencies - Expected Contractual Cash Commitments (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Expected contractual cash commitments | |
2,018 | $ 634,163 |
2,019 | 897,434 |
2,020 | 762,926 |
2,021 | 602,286 |
2,022 | 1,461,211 |
Thereafter | 6,792,100 |
Total | 11,150,120 |
Uncertain tax positions are recognized in other long-term liabilities | 15,344 |
Debt obligations | |
Expected contractual cash commitments | |
2,018 | 2,455 |
2,019 | 3,935 |
2,020 | 1,207 |
2,021 | 727 |
2,022 | 1,000,000 |
Thereafter | 5,500,000 |
Total | 6,508,324 |
Cash interest payments | |
Expected contractual cash commitments | |
2,018 | 168,407 |
2,019 | 338,887 |
2,020 | 338,844 |
2,021 | 338,817 |
2,022 | 338,811 |
Thereafter | 919,243 |
Total | 2,443,009 |
Satellite and transmission | |
Expected contractual cash commitments | |
2,018 | 59,557 |
2,019 | 94,922 |
2,020 | 51,056 |
2,021 | 4,347 |
2,022 | 2,428 |
Thereafter | 4,288 |
Total | 216,598 |
Programming and content | |
Expected contractual cash commitments | |
2,018 | 136,122 |
2,019 | 251,953 |
2,020 | 207,728 |
2,021 | 118,706 |
2,022 | 52,475 |
Thereafter | 162,938 |
Total | 929,922 |
Sales and marketing | |
Expected contractual cash commitments | |
2,018 | 9,990 |
2,019 | 12,817 |
2,020 | 7,701 |
2,021 | 7,446 |
2,022 | 1,644 |
Thereafter | 203 |
Total | 39,801 |
Satellite incentive payments | |
Expected contractual cash commitments | |
2,018 | 8,001 |
2,019 | 10,652 |
2,020 | 10,197 |
2,021 | 8,574 |
2,022 | 8,558 |
Thereafter | 61,767 |
Total | 107,749 |
Operating lease obligations | |
Expected contractual cash commitments | |
2,018 | 19,499 |
2,019 | 44,983 |
2,020 | 42,779 |
2,021 | 37,416 |
2,022 | 34,096 |
Thereafter | 143,628 |
Total | 322,401 |
Royalties and other | |
Expected contractual cash commitments | |
2,018 | 230,132 |
2,019 | 139,285 |
2,020 | 103,414 |
2,021 | 86,253 |
2,022 | 23,199 |
Thereafter | 33 |
Total | $ 582,316 |
Commitments and Contingencies72
Commitments and Contingencies - Additional Information (Details) | Jul. 06, 2018USD ($) | Mar. 03, 2017USD ($) | Jun. 30, 2018USD ($)satellite |
Loss Contingencies [Line Items] | |||
Number of replacement satellites | satellite | 2 | ||
Sound Exchange, Inc | Settled Litigation | Subsequent Event | |||
Loss Contingencies [Line Items] | |||
Payments for legal settlements | $ 150,000,000 | ||
Telephone Consumer Protection Act Suits | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Damages sought per violation | $ 500 | ||
Surety Bond | |||
Loss Contingencies [Line Items] | |||
Estimate of possible loss | $ 45,000,000 | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Operating lease obligations, term | 15 years | ||
Maximum | Telephone Consumer Protection Act Suits | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Damages sought per willful violation | $ 1,500 | ||
Minimum | |||
Loss Contingencies [Line Items] | |||
Operating lease obligations, term | 1 year | ||
XM-5, FM-5, FM-6, XM-3, and XM-4 | |||
Loss Contingencies [Line Items] | |||
Operating performance over design life | 15 years | ||
XM4 | |||
Loss Contingencies [Line Items] | |||
Period beyond expected operating performance of design life for XM-4 | 5 years | ||
XM-4 | Maximum | |||
Loss Contingencies [Line Items] | |||
Additional payments required if XM-4 continues to operate above baseline specifications | $ 10,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||||
Income tax expense | $ 70,570 | $ 119,513 | $ 150,819 | $ 233,486 | ||
Income Taxes [Line Items] | ||||||
Effective income tax rate percent | 19.40% | 37.20% | 20.60% | 36.30% | ||
Valuation allowance | $ 52,405 | $ 52,405 | $ 52,883 | |||
Forecast | ||||||
Income Taxes [Line Items] | ||||||
Effective income tax rate percent | 22.00% |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jul. 18, 2018 | Apr. 26, 2018 | Jan. 23, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Subsequent Event [Line Items] | |||||||
Dividends declared per common share (in dollars per share) | $ 0.011 | $ 0.011 | $ 0.011 | $ 0.010 | $ 0.022 | $ 0.02 | |
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Dividends declared per common share (in dollars per share) | $ 0.011 |