Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 22, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SIRIUS XM HOLDINGS INC. | |
Entity Central Index Key | 0000908937 | |
Trading Symbol | SIRI | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 4,607,284,743 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | ||
Revenue | $ 1,744,000 | $ 1,375,000 |
Cost of services: | ||
Cost of services | 739,000 | |
Subscriber acquisition costs | 108,000 | 123,000 |
Sales and marketing | 183,000 | 107,000 |
Engineering, design and development | 54,000 | 31,000 |
General and administrative | 135,000 | 85,000 |
Depreciation and amortization | 107,000 | 72,000 |
Acquisition and other related costs | 76,000 | 0 |
Total operating expenses | 1,411,000 | 952,000 |
Income from operations | 333,000 | 423,000 |
Other income (expense): | ||
Interest expense | (90,000) | (90,000) |
Loss on extinguishment of debt | (1,000) | 0 |
Other income | 1,000 | 36,000 |
Total other expense | (90,000) | (54,000) |
Income before income taxes | 243,000 | 369,000 |
Income tax expense | (81,000) | (80,000) |
Net Income available to common stockholders for basic net income per common share | 162,000 | 289,000 |
Net income | 162,000 | 289,000 |
Foreign currency translation adjustment, net of tax | 7,000 | (9,000) |
Total comprehensive income | $ 169,000 | $ 280,000 |
Net income per common share: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.06 |
Diluted (in dollars per share) | $ 0.03 | $ 0.06 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 4,571 | 4,491 |
Diluted (in shares) | 4,678 | 4,586 |
Dividends declared per common share (in dollars per share) | $ 0.0121 | $ 0.0110 |
Subscriber revenue | ||
Revenue: | ||
Revenue | $ 1,458,000 | $ 1,258,000 |
Advertising revenue | ||
Revenue: | ||
Revenue | 209,000 | 42,000 |
Equipment | ||
Revenue: | ||
Revenue | 41,000 | 35,000 |
Cost of services: | ||
Cost of services | 6,000 | 7,000 |
Other revenue | ||
Revenue: | ||
Revenue | 36,000 | 40,000 |
Revenue share and royalties | ||
Cost of services: | ||
Cost of services | 492,000 | 310,000 |
Programming and content | ||
Cost of services: | ||
Cost of services | 106,000 | 101,000 |
Customer service and billing | ||
Cost of services: | ||
Cost of services | 113,000 | 94,000 |
Transmission | ||
Cost of services: | ||
Cost of services | $ 31,000 | $ 22,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 62 | $ 54 |
Receivables, net | 592 | 233 |
Inventory, net | 20 | 22 |
Related party current assets | 12 | 11 |
Prepaid expenses and other current assets | 221 | 158 |
Total current assets | 907 | 478 |
Property and equipment, net | 1,586 | 1,513 |
Intangible assets, net | 3,581 | 2,501 |
Goodwill | 3,831 | 2,290 |
Related party long-term assets | 448 | 960 |
Deferred tax assets | 298 | 293 |
Operating lease right-of-use assets | 428 | 0 |
Other long-term assets | 146 | 138 |
Total assets | 11,225 | 8,173 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,072 | 736 |
Accrued interest | 86 | 128 |
Current portion of deferred revenue | 1,994 | 1,932 |
Current maturities of debt | 4 | 3 |
Operating lease current liabilities | 46 | 0 |
Related party current liabilities | 4 | 4 |
Total current liabilities | 3,206 | 2,803 |
Long-term deferred revenue | 145 | 149 |
Long-term debt | 7,181 | 6,885 |
Related party long-term liabilities | 3 | 4 |
Deferred tax liabilities | 48 | 47 |
Operating lease liabilities | 397 | 0 |
Other long-term liabilities | 91 | 102 |
Total liabilities | 11,071 | 9,990 |
Commitments and contingencies (Note 15) | ||
Stockholders’ (deficit) equity: | ||
Common stock, par value $0.001 per share; 9,000 shares authorized; 4,650 and 4,346 shares issued; 4,645 and 4,346 outstanding at March 31, 2019 and December 31, 2018, respectively | 5 | 4 |
Accumulated other comprehensive income (loss), net of tax | 1 | (6) |
Additional paid-in capital | 2,071 | 242 |
Treasury stock, at cost; 5 and 0 shares of common stock at March 31, 2019 and December 31, 2018, respectively | (28) | 0 |
Accumulated deficit | (1,895) | (2,057) |
Total stockholders’ equity (deficit) | 154 | (1,817) |
Total liabilities and stockholders’ equity (deficit) | $ 11,225 | $ 8,173 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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) | 4,650,000,000 | 4,346,000,000 |
Common stock, shares outstanding (in shares) | 4,645,000,000 | 4,346,000,000 |
Treasury stock (in shares) | 5,000,000 | 0 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Accumulated Other Comprehensive Income (Loss) | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Pandora | PandoraCommon Stock | PandoraAdditional Paid-in Capital |
Beginning balance (in shares) at Dec. 31, 2017 | 4,531 | 3 | |||||||
Beginning balance at Dec. 31, 2017 | $ (1,524) | $ 4 | $ 19 | $ 1,713 | $ (17) | $ (3,243) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income, net of tax | 280 | (9) | 289 | ||||||
Share-based payment expense | 29 | 29 | |||||||
Exercise of options and vesting of restricted stock units (in shares) | 5 | ||||||||
Exercise of options and vesting of restricted stock units | 0 | ||||||||
Withholding taxes on net share settlement of stock-based compensation | (24) | (24) | |||||||
Cash dividends paid on common stock, $0.0121 per share | (49) | (49) | |||||||
Common stock repurchased (in shares) | 52 | ||||||||
Common stock repurchased | (295) | $ (295) | |||||||
Common stock retired (in shares) | (55) | (55) | |||||||
Common stock retired | 0 | (309) | $ 309 | ||||||
Ending balance (in shares) at Mar. 31, 2018 | 4,481 | 0 | |||||||
Ending balance at Mar. 31, 2018 | (1,565) | $ 4 | 14 | 1,360 | $ (3) | (2,940) | |||
Beginning balance (in shares) at Dec. 31, 2018 | 4,346 | 0 | |||||||
Beginning balance at Dec. 31, 2018 | (1,817) | $ 4 | (6) | 242 | $ 0 | (2,057) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income, net of tax | 169 | 7 | 162 | ||||||
Share-based payment expense | 74 | 74 | |||||||
Exercise of options and vesting of restricted stock units (in shares) | 8 | ||||||||
Exercise of options and vesting of restricted stock units | 0 | ||||||||
Withholding taxes on net share settlement of stock-based compensation | (34) | (34) | |||||||
Cash dividends paid on common stock, $0.0121 per share | (57) | (57) | |||||||
Issuance of common stock as part of Pandora acquisition (in shares) | 392 | ||||||||
Issuance of common stock as part of Pandora Acquisition | $ 2,355 | $ 1 | $ 2,354 | ||||||
Equity component of convertible note | 68 | 68 | |||||||
Common stock repurchased (in shares) | 101 | ||||||||
Common stock repurchased | (604) | $ (604) | |||||||
Common stock retired (in shares) | (96) | (96) | |||||||
Common stock retired | 0 | (576) | $ 576 | ||||||
Ending balance (in shares) at Mar. 31, 2019 | 4,650 | 5 | |||||||
Ending balance at Mar. 31, 2019 | $ 154 | $ 5 | $ 1 | $ 2,071 | $ (28) | $ (1,895) |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend per share of common stock (in dollars per share) | $ 0.0121 | $ 0.0110 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 162,000 | $ 289,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 107,000 | 72,000 |
Non-cash interest expense, net of amortization of premium | 4,000 | 2,000 |
Provision for doubtful accounts | 14,000 | 11,000 |
Amortization of deferred income related to equity method investment | (1,000) | (1,000) |
Loss on extinguishment of debt | (1,000) | 0 |
Loss (gain) on unconsolidated entity investments, net | 4,000 | (1,000) |
Gain on fair value instrument | 0 | (31,000) |
Dividend received from unconsolidated entity investment | 0 | 1,000 |
Share-based payment expense | 70,000 | 34,000 |
Deferred income taxes | 77,000 | 72,000 |
Changes in operating assets and liabilities: | ||
Receivables | (13,000) | (14,000) |
Inventory | 2,000 | 3,000 |
Related party, net | (1,000) | (2,000) |
Prepaid expenses and other current assets | (31,000) | (8,000) |
Other long-term assets | 1,000 | 6,000 |
Operating lease right-of-use assets | 19,000 | |
Accounts payable and accrued expenses | 15,000 | (38,000) |
Accrued interest | (42,000) | (53,000) |
Deferred revenue | 20,000 | 66,000 |
Operating lease liabilities | (17,000) | |
Other long-term liabilities | 5,000 | 7,000 |
Net cash provided by operating activities | 396,000 | 415,000 |
Cash flows from investing activities: | ||
Additions to property and equipment | (90,000) | (81,000) |
Purchases of other investments | (6,000) | (7,000) |
Cash received from Pandora Acquisition | 313,000 | 0 |
Sale of short-term investments | 72,000 | 0 |
Investments in related parties and other equity investees | (5,000) | 0 |
Repayment from related party | 0 | 3,000 |
Net cash provided by (used in) investing activities | 284,000 | (85,000) |
Cash flows from financing activities: | ||
Taxes paid from net share settlements for stock-based compensation | (33,000) | (23,000) |
Revolving credit facility, net of deferred financing costs | 143,000 | 65,000 |
Proceeds from sale of capped call security | 3,000 | 0 |
Principal payments of long-term borrowings | (152,000) | (4,000) |
Common stock repurchased and retired | (576,000) | (309,000) |
Dividends paid | (57,000) | (49,000) |
Net cash used in financing activities | (672,000) | (320,000) |
Net decrease in cash, cash equivalents and restricted cash | 8,000 | 10,000 |
Cash, cash equivalents and restricted cash at beginning of period | 65,000 | 79,000 |
Cash, cash equivalents and restricted cash at end of period | 73,000 | 89,000 |
Cash paid during the period for: | ||
Interest, net of amounts capitalized | 128,000 | 139,000 |
Income taxes paid | 1,000 | 6,000 |
Non-cash investing and financing activities: | ||
Treasury stock not yet settled | (28,000) | 14,000 |
Fair value of shares issued related to acquisition of a business | 0 | |
Accumulated other comprehensive income (loss), net of tax | $ (7,000) | $ 9,000 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 62 | $ 54 | $ 79 | $ 69 |
Restricted cash included in Other long-term assets | 11 | 11 | 10 | 10 |
Cash, cash equivalents and restricted cash at end of period | $ 73 | $ 65 | $ 89 | $ 79 |
Business & Basis of Presentatio
Business & Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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. “Sirius XM” refers to our wholly owned subsidiary Sirius XM Radio Inc. and its subsidiaries. “Pandora” refers to Sirius XM's wholly owned subsidiary Pandora Media, LLC (the successor to Pandora Media, Inc.) and its subsidiaries. Holdings has no operations independent of Sirius XM and Pandora. Business We operate two complementary audio entertainment businesses - our Sirius XM business and our Pandora business. Sirius XM Our Sirius XM business transmits 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. Satellite radios are primarily distributed through automakers, retailers and our website. Subscribers can also receive music and other channels, plus certain other features, over our Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment. The primary source of revenue from our Sirius XM business is generated from subscription fees, with most of our customers subscribing to monthly, quarterly, semi-annual or annual plans. We also derive revenue from advertising on select non-music channels, direct sales of our satellite radios and accessories, and other ancillary services. As of March 31, 2019 , our Sirius XM business had approximately 34.2 million subscribers. In addition to our audio entertainment businesses, we provide connected vehicle services to several automakers and directly to consumers through aftermarket devices. These services are designed to enhance safety, security and the driving experience. We also offer a suite of data services that includes graphical weather, fuel prices, sports schedules and scores and movie listings, a traffic information service that includes information as to road closings, traffic flow and incident data to consumers with compatible in-vehicle navigation systems, and real-time weather services designed for improving situational awareness in vehicles, boats and planes. Sirius XM also holds a 70% equity interest and 33% voting interest in Sirius XM Canada Holdings Inc. ("Sirius XM Canada"). Pandora Our Pandora business operates a music discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen to music, whether through mobile devices, car speakers or connected devices in the home. Pandora enables listeners to create personalized stations and playlists, as well as search and play songs and albums on-demand. Pandora is available as an ad-supported radio service, a radio subscription service, called Pandora Plus, and an on-demand subscription service, called Pandora Premium. As of March 31, 2019 , Pandora had approximately 6.9 million subscribers. The majority of revenue from our Pandora business is generated from advertising on our ad-supported radio service. In addition, as a result of the May 2018 acquisition of AdsWizz Inc. by Pandora, we provide a comprehensive digital audio advertising technology platform, which connects audio publishers and advertisers. As of March 31, 2019 , our Pandora business had approximately 66.0 million active users. Liberty Media As of March 31, 2019 , Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, approximately 68% 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 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany transactions have been eliminated in consolidation. Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation. Music Royalty Fee revenue was reported as Other revenue in our March 31, 2018 Quarterly Report on Form 10-Q. This revenue was reclassified to Subscriber revenue to conform with the current period presentation. For the Three Months Ended March 31, 2018 As Reported Reclassification Current Year Subscriber revenue $ 1,117 $ 141 $ 1,258 Advertising revenue 42 — 42 Equipment revenue 35 — 35 Other revenue 181 (141 ) 40 Total revenue $ 1,375 $ — $ 1,375 In the opinion of our management, all normal recurring adjustments necessary for a fair presentation of our unaudited consolidated financial statements as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 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, 2018, which was filed with the SEC on January 30, 2019. 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 two reportable segments as our chief operating decision maker, our Chief Executive Officer, assesses performance and allocates resources based on the financial results of these segments. Refer to Note 16 for information related to our segments. 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 months ended March 31, 2019 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 18. 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, income taxes, and the purchase accounting related to the Pandora Acquisition (defined below). |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On February 1, 2019, through a series of transactions, Pandora Media, Inc., became an indirect wholly owned subsidiary of Sirius XM and continues to operate as Pandora Media, LLC (the “Pandora Acquisition”). In connection with the Pandora Acquisition, we purchased all of the outstanding shares of the capital stock of Pandora for $2,355 by converting each outstanding share of Pandora common stock into 1.44 shares of our common stock and we also canceled our preferred stock investment in Pandora for $524 for total consideration of $2,879 . Net cash acquired was $313 . As part of the Pandora Acquisition, Holdings unconditionally guaranteed all of the payment obligations of Pandora under its outstanding 1.75% convertible senior notes due 2020 and 1.75% convertible senior notes due 2023. The table below shows the value of the consideration paid in connection with the Pandora Acquisition: Total Pandora common stock outstanding 272 Exchange ratio 1.44 Common stock issued 392 Price per share of Holdings common stock $ 5.83 Value of common stock issued to Pandora stockholders $ 2,285 Value of replacement equity awards attributable to pre-combination service $ 70 Consideration of common stock and replacement equity awards for pre-combination service $ 2,355 Sirius XM’s Pandora preferred stock investment (related party fair value instrument) canceled $ 524 Total consideration for transactions $ 2,879 Value attributed to par at $0.001 par value $ 1 Balance to capital in excess of par value $ 2,354 The table below summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date: Acquired Assets: Cash and cash equivalents $ 313 Receivables, net 361 Prepaid expenses and other current assets 109 Property and equipment 65 Intangible assets 1,107 Goodwill 1,541 Deferred tax assets 83 Operating lease right-of-use assets 96 Long term assets 7 Total assets $ 3,682 Assumed Liabilities: Accounts payable and accrued expenses $ 302 Deferred revenue 37 Operating lease current liabilities 27 Current maturities of debt 151 Long-term debt (a) 218 Operating lease liabilities 62 Other long-term liabilities 6 Total liabilities $ 803 Total Consideration $ 2,879 (a) In order to present the assets acquired and liabilities assumed, the conversion feature associated with the convertible notes for $68 has been included within Long-term debt in the table above and included within Additional paid-in-capital within our unaudited statements of stockholders' equity (deficit). Refer to note 12 for additional information. The Pandora Acquisition was accounted for using the acquisition method of accounting. The initial purchase price allocation is preliminary and is subject to revision as permitted by ASC 805, Business Combinations . The primary areas of the purchase price allocation that are not yet finalized are related to certain current assets, contingencies and tax balances. The excess purchase price over identifiable net tangible and intangible assets of $1,541 has been recorded to Goodwill in our unaudited consolidated balance sheets as of March 31, 2019 . A total of $776 has been allocated to identifiable intangible assets subject to amortization and relates to the assessed fair value of the acquired customer relationships and software and technology and is being amortized over the estimated weighted average useful lives of 8 and 5 years, respectively. A total of $331 has been allocated to identifiable indefinite lived intangible assets and relates to the assessed fair value of the acquired trademarks. The fair value assessed for the majority of the remaining assets acquired and liabilities assumed equaled their carrying value. Goodwill represents synergies and economies of scale expected from the combination of services. Goodwill has been allocated to the Pandora segment. Additionally, in connection with the Pandora Acquisition, we acquired gross net operating loss (“NOL”) carryforwards of approximately $1,199 for federal income tax purposes available to offset future taxable income. The acquired NOL's are limited by Section 382 of the Internal Revenue Code. Those limitations are not expected to impact our ability to fully utilize those NOL's within the carryforward period. We recognized acquisition related costs of $76 that were expensed in Acquisition and other related costs in our unaudited consolidated statements of comprehensive income during the three months ended March 31, 2019 . Pro Forma Financial Information Pandora was consolidated into our financial statements starting on the acquisition date, February 1, 2019. The aggregate revenue and net loss of Pandora consolidated into our financial statements since the date of acquisition was $251 and $122 , respectively, for the three months ended March 31, 2019 . The following pro forma financial information presents our results as if the Pandora Acquisition had occurred on January 1, 2018: For the Three Months Ended March 31, 2019 2018 Total revenue $ 1,860 $ 1,697 Net income $ 181 $ 172 These pro forma results are based on estimates and assumptions, which we believe are reasonable. They are not the results that would have been realized had the acquisition actually occurred on January 1, 2018 and are not indicative of our consolidated results of operations in future periods. The pro forma results primarily include adjustments related to amortization of acquired intangible assets, depreciation of property and equipment, acquisition costs and associated tax impacts. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018 , 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: March 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Total Fair Level 1 Level 2 Level 3 Total Fair Assets: Pandora investment (a) — — — $ — — $ 523 — $ 523 Liabilities: Debt (b) — $ 7,403 — $ 7,403 — $ 6,633 — $ 6,633 (a) During the year ended December 31, 2017, Sirius XM completed a $480 preferred stock investment in Pandora. Prior to the Pandora Acquisition, we elected the fair value option to account for this investment. This investment was canceled in conjunction with the Pandora Acquisition. Refer to Note 2 for information on this acquisition. (b) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 12 for information related to the carrying value of our debt as of March 31, 2019 and December 31, 2018 . Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income of $1 was primarily comprised of the cumulative foreign currency translation adjustments related to our investment in and loan to Sirius XM Canada (refer to Note 11 for additional information). During the three months ended March 31, 2019 and 2018 , we recorded foreign currency translation adjustment income (loss) of $7 and $(9) , respectively, net of tax (expense) benefit of $(2) and $3 , respectively. Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset in the balance sheet and expensed over the term of the hosting arrangement to the same line item in the statement of income as the costs related to the hosting fees. The guidance in this ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted including adoption in any interim period. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after adoption. This ASU will not have a material impact on our consolidated statements of operations. Recently Adopted Accounting Policies ASU 2016-02, Leases (Topic 842). In February 2016, FASB issued ASU 2016-02 which requires companies 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, measure, and present 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. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements , amending certain aspects of the new leasing standard. The amendment allows an additional optional transition method whereby an entity records a cumulative effect adjustment to opening retained earnings in the year of adoption without restating prior periods. We adopted this ASU on January 1, 2019 and elected the additional transition method per ASU 2018-11. Our leases consist of repeater leases, facility leases and equipment leases. We elected the package of practical expedients permitted under the transition guidance within the new standard. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities of approximately $347 and $369 , respectively, as of January 1, 2019. The standard did not impact our consolidated statements of operations, consolidated statements of cash flows or debt. Additionally, we did not record a cumulative effect adjustment to opening retained earnings. The effect of the changes made to our consolidated balance sheet as of January 1, 2019 for the adoption of ASU 2016-02 is included in the table below. Balance at December 31, 2018 Adjustments Due to ASU 2016-02 Balance at January 1, 2019 Balance Sheet Assets: Operating lease right-of-use assets $ — $ 347 $ 347 Liabilities: Accounts payable and accrued expenses $ 736 $ (1 ) $ 735 Operating lease current liabilities — 30 30 Operating lease liabilities — 339 339 Other long-term liabilities 102 (21 ) 81 |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2019 | |
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, restricted stock units and convertible debt) were exercised or converted into common stock, calculated using the treasury stock method. We had no participating securities during the three months ended March 31, 2019 and 2018 . Common stock equivalents of 60 and 44 for the three months ended March 31, 2019 and 2018 , respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive. We issued 392 shares of our common stock in connection with the Pandora Acquisition. For the Three Months Ended March 31, 2019 2018 Numerator: Net Income available to common stockholders for basic net income per common share $ 162 $ 289 Effect of interest on assumed conversions of convertible debt, net of tax 1 — Net Income available to common stockholders for dilutive net income per common share $ 163 $ 289 Denominator: Weighted average common shares outstanding for basic net income per common share 4,571 4,491 Weighted average impact of assumed Convertible Notes 25 — Weighted average impact of dilutive equity instruments 82 95 Weighted average shares for diluted net income per common share 4,678 4,586 Net income per common share: Basic $ 0.04 $ 0.06 Diluted $ 0.03 $ 0.06 |
Receivables, net
Receivables, net | 3 Months Ended |
Mar. 31, 2019 | |
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, advertising customers and other customers, 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: March 31, 2019 December 31, 2018 Gross customer accounts receivable $ 465 $ 105 Allowance for doubtful accounts (20 ) (7 ) Customer accounts receivable, net $ 445 $ 98 Receivables from distributors 121 107 Other receivables 26 28 Total receivables, net $ 592 $ 233 |
Inventory, net
Inventory, net | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, 2019 December 31, 2018 Raw materials $ 6 $ 5 Finished goods 20 23 Allowance for obsolescence (6 ) (6 ) Total inventory, net $ 20 $ 22 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2019 | |
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 two reporting units 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. As of March 31, 2019 , there were no indicators of impairment, and no impairment losses were recorded for goodwill during the three months ended March 31, 2019 and 2018 . As of March 31, 2019 , the cumulative balance of goodwill impairments recorded since the July 2008 merger between our wholly owned subsidiary, Vernon Merger Corporation, and XM Satellite Radio Holdings Inc. (“XM”), was $4,766 , which was recognized during the year ended December 31, 2008. As a result of the Pandora Acquisition, we recorded additional goodwill of $1,541 during the three months ended March 31, 2019 at our Pandora reporting unit. The goodwill of the acquired company is not deductible for tax purposes. Refer to Note 2 for information on this acquisition. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Our intangible assets include the following: March 31, 2019 December 31, 2018 Weighted Gross Accumulated Amortization Net Carrying Gross Accumulated Amortization Net Carrying Indefinite life intangible assets: FCC licenses Indefinite $ 2,084 $ — $ 2,084 $ 2,084 $ — $ 2,084 Trademarks Indefinite 251 — 251 251 — 251 Definite life intangible assets: OEM relationships 15 years 220 (79 ) 141 220 (76 ) 144 Licensing agreements 12 years 45 (39 ) 6 45 (38 ) 7 Software and technology 7 years 35 (21 ) 14 35 (20 ) 15 Due to Pandora Acquisition: Indefinite life intangible assets: Trademarks Indefinite $ 331 $ — $ 331 $ — $ — $ — Definite life intangible assets: Customer relationships 8 years 403 (9 ) 394 — — — Software and technology 5 years 373 (13 ) 360 — — — Total intangible assets $ 3,742 $ (161 ) $ 3,581 $ 2,635 $ (134 ) $ 2,501 Indefinite Life Intangible Assets We have identified our FCC licenses and the Pandora, XM and Automatic 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. As part of the Pandora Acquisition, we also identified $331 related to its trademarks, for which the fair value was determined using the relief from royalty method as of the acquisition date. We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary services. Each of the FCC licenses authorizes us to use radio spectrum, a 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 March 31, 2019 , there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three months ended March 31, 2019 and 2018 . Definite Life Intangible Assets Amortization expense for all definite life intangible assets was $27 and $6 for the three months ended March 31, 2019 and 2018 , respectively. There were no retirements of definite lived intangible assets during the three months ended March 31, 2019 . As part of the Pandora Acquisition, $776 was allocated to identifiable intangible assets subject to amortization and related to the assessed fair value of customer relationships and software and technology, which was determined by using the multi-period excess earnings method and the relief from royalty method, respectively, as of the acquisition date. The expected amortization expense for each of the fiscal years 2019 through 2023 and for periods thereafter is as follows: Years ending December 31, Amount 2019 (remaining) $ 114 2020 152 2021 146 2022 144 2023 134 Thereafter 225 Total definite life intangible assets, net $ 915 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net, consists of the following: March 31, 2019 December 31, 2018 Satellite system $ 1,587 $ 1,587 Terrestrial repeater network 99 98 Leasehold improvements 76 58 Broadcast studio equipment 112 111 Capitalized software and hardware 875 824 Satellite telemetry, tracking and control facilities 80 76 Furniture, fixtures, equipment and other 101 97 Land 38 38 Building 63 63 Construction in progress 486 412 Total property and equipment 3,517 3,364 Accumulated depreciation and amortization (1,931 ) (1,851 ) Property and equipment, net $ 1,586 $ 1,513 Construction in progress consists of the following: March 31, 2019 December 31, 2018 Satellite system $ 321 $ 296 Terrestrial repeater network 5 5 Capitalized software and hardware 117 77 Other 43 34 Construction in progress $ 486 $ 412 Depreciation and amortization expense on property and equipment was $80 and $66 for the three months ended March 31, 2019 and 2018 , respectively. There were no retirements of property and equipment during the three months ended March 31, 2019 and 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 $4 and $2 for the three months ended March 31, 2019 and 2018 , respectively, which related to the construction of our SXM-7 and SXM-8 satellites. We also capitalize a portion of stock based compensation related to employee time for capitalized software projects. Capitalized stock based compensation costs were $3 for the three months ended March 31, 2019 . We did no t capitalize any stock based compensation for the three months ended March 31, 2018 . Satellites As of March 31, 2019 , we owned a fleet of five satellites. The chart below provides certain information on our satellites as of March 31, 2019 : 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 Each satellite requires an FCC license and prior to the expiration of each license, we are required to apply for a renewal of the FCC satellite licenses. The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred. 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 2026 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases We have operating and finance leases for offices, terrestrial repeaters, data centers and certain equipment. Our leases have remaining lease terms of less than 1 year to 19 years , some of which may include options to extend the leases for up to 5 years , and some of which may include options to terminate the leases within 1 year . We elected the practical expedient to account for the lease and non-lease components as a single component. Additionally, we elected the practical expedient to not recognize right-of-use assets or lease liabilities for short-term leases, which are those leases with a term of twelve months or less at the lease commencement date. The components of lease expense were as follows: For the Three Months Ended March 31, 2019 Operating lease cost $ 17 Finance lease cost Amortization of right-of-use assets 1 Sublease income (1 ) Total lease cost $ 17 Supplemental cash flow information related to leases was as follows: For the Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 17 Financing cash flows from finance leases $ 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2 Supplemental balance sheet information related to leases was as follows: March 31, 2019 Operating Leases Operating lease right-of-use assets $ 428 Operating lease current liabilities 46 Operating lease liabilities 397 Total operating lease liabilities $ 443 March 31, 2019 Finance Leases Property and equipment, gross $ 31 Accumulated depreciation (22 ) Property and equipment, net $ 9 Current maturities of debt $ 4 Long-term debt 1 Total finance lease liabilities $ 5 March 31, 2019 Weighted Average Remaining Lease Term Operating leases 10 years Finance leases 2 years March 31, 2019 Weighted Average Discount Rate Operating leases 5.3 % Finance leases 1.9 % Maturities of lease liabilities were as follows: Operating Leases Finance Leases Year ending December 31, 2019 (remaining) $ 48 $ 3 2020 70 2 2021 59 1 2022 56 — 2023 53 — Thereafter 290 — Total future minimum lease payments 576 6 Less imputed interest (133 ) (1 ) Total $ 443 $ 5 As of March 31, 2019 , we had entered into an additional operating lease for office space that has not yet commenced of $33 . This operating lease will commence in the second quarter of 2019 with a lease term of 11 years. |
Leases | Leases We have operating and finance leases for offices, terrestrial repeaters, data centers and certain equipment. Our leases have remaining lease terms of less than 1 year to 19 years , some of which may include options to extend the leases for up to 5 years , and some of which may include options to terminate the leases within 1 year . We elected the practical expedient to account for the lease and non-lease components as a single component. Additionally, we elected the practical expedient to not recognize right-of-use assets or lease liabilities for short-term leases, which are those leases with a term of twelve months or less at the lease commencement date. The components of lease expense were as follows: For the Three Months Ended March 31, 2019 Operating lease cost $ 17 Finance lease cost Amortization of right-of-use assets 1 Sublease income (1 ) Total lease cost $ 17 Supplemental cash flow information related to leases was as follows: For the Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 17 Financing cash flows from finance leases $ 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2 Supplemental balance sheet information related to leases was as follows: March 31, 2019 Operating Leases Operating lease right-of-use assets $ 428 Operating lease current liabilities 46 Operating lease liabilities 397 Total operating lease liabilities $ 443 March 31, 2019 Finance Leases Property and equipment, gross $ 31 Accumulated depreciation (22 ) Property and equipment, net $ 9 Current maturities of debt $ 4 Long-term debt 1 Total finance lease liabilities $ 5 March 31, 2019 Weighted Average Remaining Lease Term Operating leases 10 years Finance leases 2 years March 31, 2019 Weighted Average Discount Rate Operating leases 5.3 % Finance leases 1.9 % Maturities of lease liabilities were as follows: Operating Leases Finance Leases Year ending December 31, 2019 (remaining) $ 48 $ 3 2020 70 2 2021 59 1 2022 56 — 2023 53 — Thereafter 290 — Total future minimum lease payments 576 6 Less imputed interest (133 ) (1 ) Total $ 443 $ 5 As of March 31, 2019 , we had entered into an additional operating lease for office space that has not yet commenced of $33 . This operating lease will commence in the second quarter of 2019 with a lease term of 11 years. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
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 and Sirius XM Canada. Liberty Media As of March 31, 2019 , Liberty Media beneficially owned, directly and indirectly, approximately 68% 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 $309 , which included $130 in cash and we issued 35 shares of our common stock with an aggregate value of $179 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 591 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 loan to Sirius XM Canada in the aggregate amount of $131 . 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 at the last day of the financial year if all target dividends have been paid in full. During the three months ended March 31, 2019 and 2018 , Sirius XM Canada repaid less than $1 and $3 of the principal amount of the loan, respectively. 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: March 31, 2019 December 31, 2018 Related party current assets $ 12 $ 11 Related party long-term assets $ 448 $ 437 Related party current liabilities $ 4 $ 4 Related party long-term liabilities $ 3 $ 4 As of March 31, 2019 and December 31, 2018 , 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 March 31, 2019 and December 31, 2018 included the carrying value of our investment balance in Sirius XM Canada of $320 and $311 , respectively, and, as of March 31, 2019 and December 31, 2018 , also included $128 and $126 , respectively, for the long-term value of the outstanding loan to Sirius XM Canada. Our related party liabilities for both March 31, 2019 and December 31, 2018 included $3 for the current portion of deferred revenue and $2 for the long-term portion of deferred revenue recorded as of the date of the Sirius and XM merger 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 less than $1 during each of the three months ended March 31, 2019 and 2018 . 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 March 31, 2019 2018 Revenue (a) $ 24 $ 24 Other income Share of net earnings (b) $ 3 $ 1 Interest income (c) $ 2 $ 3 (a) We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income. (b) For both the three months ended March 31, 2019 and 2018 , Share of net earnings included $1 of amortization expense related to equity method intangible assets. (c) This interest income relates to the loan to Sirius XM Canada and is recorded as Other income (expense) in our unaudited consolidated statements of comprehensive income. Pandora The $523 preferred stock investment in Pandora as of December 31, 2018 was canceled in conjunction with the Pandora Acquisition. Refer to Note 2 for information on this acquisition. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Our debt as of March 31, 2019 and December 31, 2018 consisted of the following: Carrying value (a) at Issuer / Borrower Issued Debt Maturity Date Interest Payable Principal Amount at March 31, 2019 March 31, 2019 December 31, 2018 Pandora December 2015 1.75% Convertible Senior Notes December 1, 2020 semi-annually on June 1 and December 1 $ 1 $ 1 $ — Sirius XM July 2017 3.875% Senior Notes August 1, 2022 semi-annually on February 1 and August 1 1,000 994 994 Sirius XM May 2013 4.625% Senior Notes May 15, 2023 semi-annually on May 15 and November 15 500 497 497 Pandora June 2018 1.75% Convertible Senior Notes December 1, 2023 semi-annually on June 1 and December 1 193 151 — Sirius XM May 2014 6.00% Senior Notes July 15, 2024 semi-annually on January 15 and July 15 1,500 1,490 1,490 Sirius XM March 2015 5.375% Senior Notes April 15, 2025 semi-annually on April 15 and October 15 1,000 993 992 Sirius XM May 2016 5.375% Senior Notes July 15, 2026 semi-annually on January 15 and July 15 1,000 991 991 Sirius XM July 2017 5.00% Senior Notes August 1, 2027 semi-annually on February 1 and August 1 1,500 1,488 1,487 Sirius XM December 2012 Senior Secured Revolving Credit Facility (the "Credit Facility") June 29, 2023 variable fee paid quarterly 1,750 582 439 Sirius XM Various Finance leases Various n/a n/a 5 5 Total Debt 7,192 6,895 Less: total current maturities 4 3 Less: total deferred financing costs 7 7 Total long-term debt $ 7,181 $ 6,885 (a) The carrying value of the obligations is net of any remaining unamortized original issue discount. (b) Holdings has unconditionally guaranteed all of the payment obligations of Pandora under these notes. (c) We acquired $152 in principal amount of the 1.75% Convertible Senior Notes due 2020 as part of the Pandora Acquisition. On February 14, 2019, Pandora announced a tender offer to repurchase for cash any and all of its outstanding 1.75% Convertible Senior Notes due 2020 at a price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to, but not including, the repurchase date. On March 18, 2019, we purchased $ 151 in aggregate principal amount of the 1.75% Convertible Senior Notes due 2020 that had been validly tendered and not validly withdrawn in the repurchase offer. We recorded $1 Loss on extinguishment of debt in connection with this transaction. In addition, we unwound the capped call security acquired as part of the Pandora Acquisition in March 2019 for $3 . (d) Substantially all material domestic subsidiaries, including Pandora and its subsidiaries, that guarantee the credit facility have guaranteed these notes. (e) We acquired $193 in principal amount of the 1.75% Convertible Senior Notes due 2023 as part of the Pandora Acquisition. We allocate the principal amount of the 1.75% Convertible Senior Notes due 2023 between the liability and equity components. The value assigned to the debt components of the 1.75% Convertible Senior Notes due 2023 is the estimated fair value as of the issuance date of similar debt without the conversion feature. The difference between the fair value of the debt and this estimated fair value represents the value which has been assigned to the equity component. The equity component is recorded to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the Notes over the carrying amount of the liability component is recorded as a debt discount, and is being amortized to interest expense using the effective interest method through the December 1, 2023 maturity date. The 1.75% Convertible Senior Notes due 2023 were not convertible and not redeemable as of March 31, 2019 . As a result, we have classified the debt as Long-term within our unaudited consolidated balance sheets. This classification will be reassessed each reporting period. (f) 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, including Pandora and its 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 March 31, 2019 . 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. Additionally, the amount available for future borrowing under the Credit Facility is reduced by letters of credit issued for the benefit of Pandora, which were $1 as of March 31, 2019 . 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. Pandora Convertible Notes Pandora's 1.75% Convertible Senior Notes due 2020 (the “Pandora 2020 Notes”) and Pandora's 1.75% Convertible Senior Notes due 2023 (the “Pandora 2023 Notes” and, together with the Pandora 2020 Notes, the “Pandora Convertible Notes”) are unsecured, senior obligations of Pandora. Holdings has guaranteed the payment and performance obligations of Pandora under each series of the Pandora Convertible Notes and the indentures governing such Pandora Convertible Notes. The Pandora 2020 Notes will mature on December 1, 2020, unless earlier repurchased or redeemed by Pandora or converted in accordance with their terms. Upon consummation of the Pandora Acquisition, the conversion rate applicable to the Pandora 2020 Notes was 87.7032 shares of Holdings’ common stock per $1,000 principal amount of the Pandora 2020 Notes. Pandora has irrevocably elected and determined to settle all conversion obligations from and after February 1, 2019 with respect to the Pandora 2020 Notes solely in cash. During the three months ended March 31, 2019, Pandora purchased $151 in aggregate principal amount of the Pandora 2020 Notes. See footnote (c) to the table above. The Pandora 2023 Notes will mature on December 1, 2023, unless earlier repurchased or redeemed by Pandora or converted in accordance with their terms. Upon consummation of the Pandora Acquisition, the conversion rate applicable to the Pandora 2023 Notes was 150.4466 shares of Holdings common stock per $1,000 principal amount of the Pandora 2023 Notes. The indentures governing the Pandora Convertible Notes contain covenants that limit Pandora’s ability to merge or consolidate and provide for customary events of default, which include nonpayment of principal or interest, breach of covenants, payment defaults or acceleration of other indebtedness and certain events of bankruptcy. At March 31, 2019 and December 31, 2018 , we were in compliance with our debt covenants. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock, par value $0.001 per share We are authorized to issue up to 9,000 shares of common stock. There were 4,650 and 4,346 shares of common stock issued and 4,645 and 4,346 shares outstanding on March 31, 2019 and December 31, 2018 , respectively. As part of the Pandora Acquisition, we issued 392 shares of our common stock. As of March 31, 2019 , there were 337 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 three months ended March 31, 2019 , we declared and paid the following dividends: Declaration Date Dividend Per Share Record Date Total Amount Payment Date January 29, 2019 $ 0.0121 February 11, 2019 $ 57 February 28, 2019 Stock Repurchase Program As of March 31, 2019 , our board of directors had approved for repurchase an aggregate of $14,000 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 March 31, 2019 , our cumulative repurchases since December 2012 under our stock repurchase program totaled 2,784 shares for $11,278 , and $2,722 remained available for future share repurchases under our stock repurchase program. The following table summarizes our total share repurchase activity for the three months ended: March 31, 2019 March 31, 2018 Share Repurchase Type Shares Amount Shares Amount Open Market and Privately Negotiated Repurchases (a) 101 $ 604 52 $ 295 (a) As of March 31, 2019 , $28 of common stock repurchases had not settled, nor been retired, and were recorded as Treasury stock within our unaudited consolidated balance sheets and unaudited consolidated statements of stockholders’ (deficit) equity. For a discussion of subsequent events refer to Note 18. Preferred Stock, par value $0.001 per share We are authorized to issue up to 50 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 March 31, 2019 and 2018 . |
Benefit Plans
Benefit Plans | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans We recognized share-based payment expense of $70 and $34 for the three months ended March 31, 2019 and 2018 , respectively. This amount includes $21 of share-based compensation expense recorded in Acquisition and other related costs in our unaudited consolidated statements of comprehensive income during the three months ended March 31, 2019 . 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 March 31, 2019 , 153 shares of common stock were available for future grants under the 2015 Plan. In connection with the Pandora Acquisition, we assumed all shares available for issuance (including any shares that later become available for issuance in accordance with the terms of the applicable plans) under each of the 2014 Stock Incentive Plan of AdsWizz Inc., the Pandora Media, Inc. 2011 Equity Incentive Plan, the Pandora Media, Inc. 2004 Stock Plan and the TheSavageBeast.com, Inc. 2000 Stock Incentive Plan, which were previously approved by stockholders of Pandora or the applicable adopting entity. All shares available under these stock plans became additional shares available for grant pursuant to the terms of the 2015 Plan (as adjusted, to the extent appropriate, to reflect the application of the exchange ratio). Subject to certain limitations set forth in the 2015 Plan, such shares may be used for awards under the 2015 Plan. Other Plans We maintain six additional share-based benefit plans — the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the 2014 Stock Incentive Plan of AdsWizz Inc., the Pandora Media, Inc. 2011 Equity Incentive Plan, the Pandora Media, Inc. 2004 Stock Plan and the TheSavageBeast.com, Inc. 2000 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: For the Three Months Ended March 31, 2019 2018 Risk-free interest rate 2.5% 2.4% Expected life of options — years 3.36 3.57 Expected stock price volatility 26% 21% Expected dividend yield 0.8% 0.7% The following table summarizes stock option activity under our share-based plans for the three months ended March 31, 2019 : Options Weighted- Weighted- Aggregate Outstanding as of December 31, 2018 243 $ 4.22 Options granted in connection with Pandora Acquisition 7 $ 3.85 Granted 13 $ 6.00 Exercised (4 ) $ 3.58 Forfeited, cancelled or expired (1 ) $ 5.48 Outstanding as of March 31, 2019 258 $ 4.30 6.15 $ 386 Exercisable as of March 31, 2019 150 $ 3.66 5.05 $ 303 The weighted average grant date fair value per share of stock options granted during the three months ended March 31, 2019 was $1.26 . The total intrinsic value of stock options exercised during the three months ended March 31, 2019 and 2018 was $10 and $55 , respectively. During the three months ended March 31, 2019 , the number of net settled shares which were issued as a result of stock option exercises was 1 . In connection with the Pandora Acquisition, each option granted by Pandora under its stock incentive plans to purchase shares of Pandora common stock, whether vested or unvested, was assumed and converted into an option to purchase shares of our common stock, with appropriate adjustments (based on the 1.44 exchange ratio) to the exercise price and number of shares of our common stock subject to such option, and has the same vesting schedule and exercise conditions as in effect as of immediately prior to the closing of the Pandora Acquisition; provided, that any Pandora stock option that had an exercise price per share that was equal to or greater than the value, at the closing of the Pandora Acquisition, of our common stock issued as merger consideration in exchange for each share of Pandora common stock, was canceled without payment. We recorded $8 to Goodwill related to pre-acquisition replacement equity awards attributable to pre-combination service. We recognized share-based payment expense associated with stock options of $20 and $19 for the three months ended March 31, 2019 and 2018 , respectively. The following table summarizes the restricted stock unit, including PRSU, activity under our share-based plans for the three months ended March 31, 2019 : Shares Grant Date Nonvested as of December 31, 2018 35 $ 5.50 Units granted in connection with Pandora Acquisition 48 $ 5.83 Granted 11 $ 5.92 Vested (13 ) $ 5.82 Forfeited (2 ) $ 5.79 Nonvested as of March 31, 2019 79 $ 5.69 The total intrinsic value of restricted stock units, including PRSUs, vesting during the three months ended March 31, 2019 and 2018 was $74 and $1 , respectively. During the three months ended March 31, 2019 , the number of net settled shares which were issued as a result of restricted stock units vesting totaled 7 . During the three months ended March 31, 2019 , we granted 5 PRSUs to certain employees. We believe it is probable that the performance target applicable to these PRSUs will be achieved. In connection with the Pandora Acquisition, each unvested restricted stock unit granted by Pandora under its stock incentive plans was assumed and converted into an unvested restricted stock unit of Holdings, with appropriate adjustments (based on the 1.44 exchange ratio) to the number of shares of our common stock to be received, and has the same vesting schedule and settlement date as in effect as of immediately prior to the closing of the Pandora Acquisition. We recorded $62 to Goodwill related to pre-acquisition replacement equity awards attributable to pre-combination service In connection with the cash dividend paid during the three months ended March 31, 2019 , we granted less than 1 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 three months ended March 31, 2019 . We recognized share-based payment expense associated with restricted stock units, including PRSUs, of $50 and $15 for the three months ended March 31, 2019 and 2018 , 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 March 31, 2019 and December 31, 2018 was $477 and $254 , respectively. The total unrecognized compensation costs at March 31, 2019 are expected to be recognized over a weighted-average period of 2.0 years. 401(k) Savings Plans Sirius XM Radio Inc. 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 in expense during both the three months ended March 31, 2019 and 2018 in connection with the Sirius XM Plan. Pandora Media, LLC 401(k) Profit Sharing Plan and Trust Pandora sponsors the Pandora Media, LLC 401(k) Profit Sharing Plan and Trust (the “Pandora Plan”) for eligible employees. The Pandora Plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain defined limits. There is no employer matching of employee's contributions. Sirius XM Holdings Inc. Deferred Compensation Plan The Sirius XM Holdings Inc. Deferred Compensation Plan (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 March 31, 2019 and 2018 were $6 and $7 , respectively. As of March 31, 2019 and 2018 , the fair value of the investments held in the trust were $30 and $22 , respectively, which is included in Other long-term assets in our unaudited consolidated balance sheets and 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 months ended March 31, 2019 and 2018 , we recorded an immaterial amount of unrealized gains and losses on investments, respectively, held in the trust. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The following table summarizes our expected contractual cash commitments as of March 31, 2019 : 2019 2020 2021 2022 2023 Thereafter Total Debt obligations $ 3 $ 2 $ 1 $ 1,000 $ 1,275 $ 5,000 $ 7,281 Cash interest payments 232 367 367 367 304 632 2,269 Satellite and transmission 76 51 4 2 1 3 137 Programming and content 193 227 129 56 33 130 768 Sales and marketing 28 12 11 7 4 11 73 Satellite incentive payments 8 10 9 9 9 53 98 Operating lease obligations 49 74 59 52 45 171 450 Advertising sales commitments 15 20 15 — — — 50 Royalties, minimum guarantees and other 337 181 100 30 12 7 667 Total (1) $ 941 $ 944 $ 695 $ 1,523 $ 1,683 $ 6,007 $ 11,793 (1) The table does not include our reserve for uncertain tax positions, which at March 31, 2019 totaled $8 . Debt obligations. Debt obligations include principal payments on outstanding debt and finance 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 brands 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 upon 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 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 upon 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, terrestrial repeaters, data centers and equipment. 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. Advertising Sales Commitments. We have entered into agreements with third parties that contain minimum advertising sales guarantees, and require that we make guaranteed payments. As of March 31, 2019 , we had future minimum guarantee commitments of $50 , of which $15 will be paid in 2019 and the remainder will be paid in 2020. On a quarterly basis, we record the greater of the cumulative actual expense incurred or the cumulative minimum guarantee based on our forecast for the minimum guarantee period. The minimum guarantee period is the period of time that the minimum guarantee relates to, as specified in the agreement, which may be annual or a longer period. Royalties, Minimum Guarantees and Other. We have entered into music royalty arrangements that include fixed payments. Certain of our content acquisition agreements also contain minimum guarantees, and require that we make upfront minimum guaranteed payments. During the three months ended March 31, 2019 , we prepaid $11 in content acquisition costs related to minimum guarantees. As of March 31, 2019 , we have future fixed minimum guarantee commitments of $250 , of which $189 will be paid in 2019 and the remainder will be paid thereafter. On a quarterly basis, we record the greater of the cumulative actual content acquisition costs incurred or the cumulative minimum guarantee based on forecasted usage for the minimum guarantee period. The minimum guarantee period is the period of time that the minimum guarantee relates to, as specified in each agreement, which may be annual or a longer period. The cumulative minimum guarantee, based on forecasted usage, considers factors such as listening hours, revenue, subscribers and other terms of each agreement that impact our expected attainment or recoupment of the minimum guarantees based on the relative attribution method. Several of our content agreements also include provisions related to the royalty payments and structures of those agreements relative to other content licensing arrangements, which, if triggered, could cause our payments under those agreements to escalate. In addition, record labels, publishers and performing rights organizations (“PROs”) with whom we have entered into direct license agreements have the right to audit our content acquisition payments, and any such audit could result in disputes over whether we have paid the proper content acquisition costs. We have also entered into various agreements with third parties for general operating purposes. The cost of our common stock acquired in our capital return program but not paid for as of March 31, 2019 was also included in this category. 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 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. 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. Following a mediation, on January 31, 2019, we entered into a memorandum of understanding to settle this purported class action suit. The settlement is expected to resolve the claims of consumers for the period October 2013 through January 2019. As part of the settlement, we will agree to pay $25 into a non-reversionary settlement fund from which cash to class members, notice, administrative costs, and attorney's fees and costs will be paid. The settlement also contemplates that we will provide three months of service to our All Access subscription package for those members of the class that elect to receive it, in lieu of cash, at no cost to those class members and who are not active subscribers at the time of the distribution. The availability of this three -month service option will not diminish the $25 common fund. As part of the settlement, we also expects to implement certain changes relating to our “Do-Not-Call” practices and telemarketing programs. Settlement of this matter is subject to execution of a definitive settlement agreement between the parties and, among other things, approval by the Court. Pre-1972 Sound Recording Litigation. On October 2, 2014, Flo & Eddie Inc. filed a class action suit against Pandora in the federal district court for the Central District of California. The complaint alleges misappropriation and conversion in connection with the public performance of sound recordings recorded prior to February 15, 1972. On December 19, 2014, Pandora filed a motion to strike the complaint pursuant to California’s Anti-Strategic Lawsuit Against Public Participation ("Anti-SLAPP") statute, which following denial of Pandora’s motion was appealed to the Ninth Circuit Court of Appeals. The district court litigation is currently stayed pending the Ninth Circuit’s decision. In March 2019, the Ninth Circuit requested certification to the California Supreme Court on the substantive legal questions. The California Supreme Court has accepted certification, briefing in the case is complete, but the Court has not yet scheduled oral argument. In September and October 2015, Arthur and Barbara Sheridan filed separate class action suits against Pandora in the federal district courts for the Northern District of California and the District of New Jersey. The complaints allege a variety of violations of common law and state copyright statutes, common law misappropriation, unfair competition, conversion, unjust enrichment and violation of rights of publicity arising from allegations that Pandora owes royalties for the public performance of sound recordings recorded prior to February 15, 1972. The actions in California and New Jersey are currently stayed pending the Ninth Circuit's decision in Flo & Eddie, Inc. v. Pandora Media, Inc . In September 2016, Ponderosa Twins Plus One and others filed a class action suit against Pandora alleging claims similar to those asserted in Flo & Eddie, Inc. v. Pandora Media Inc . The action is currently stayed in the Northern District of California pending the Ninth Circuit’s decision in Flo & Eddie, Inc. v. Pandora Media, Inc . We believe we have substantial defenses to the claims asserted in these actions, and we intend to defend these actions 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; owners of patents, trademarks, copyrights or other intellectual property and certain contingencies related to Pandora. 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. |
Segments and Geographic Informa
Segments and Geographic Information (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segments and Geographic Information | Segments and Geographic Information In accordance with FASB ASC Topic 280, Segment Reporting , we disaggregate our operations into two reportable segments: Sirius XM and Pandora. The change in segment reporting is due to the acquisition of Pandora. The financial results of these segments are utilized by the chief operating decision maker, who is our Chief Executive Officer, for evaluating segment performance and allocating resources. Our reportable segments have been determined based on our internal management structure. For additional information on our segments refer to Note 1. Segment results include the revenues and cost of services which are directly attributable to each segment. There are no indirect revenues or costs incurred that are allocated to the segments. There are planned intersegment advertising campaigns which will be eliminated. We did no t have any intersegment advertising campaigns during the three months ended March 31, 2019 . Segment revenue and gross profit were as follows during the periods presented: For the Three Months Ended March 31, 2019 Sirius XM Pandora Total Revenue Subscriber revenue $ 1,370 $ 88 $ 1,458 Advertising revenue 46 163 209 Equipment revenue 41 — 41 Other revenue 36 — 36 Total revenue 1,493 251 1,744 Cost of services (a) (569 ) (170 ) (739 ) Segment gross profit $ 924 $ 81 $ 1,005 The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows: Three Months Ended March 31, 2019 Segment Gross Profit $ 1,005 Subscriber acquisition costs (108 ) Sales and marketing (a) (168 ) Engineering, design and development (a) (45 ) General and administrative (a) (119 ) Depreciation and amortization (107 ) Share-based payment expense (49 ) Acquisition and other related costs (76 ) Total other expense (90 ) Consolidated income before income taxes $ 243 (a) Share-based payment expense includes $9 related to cost of services, $15 related to sales and marketing, $9 related to engineering, design and development and $16 related to general and administrative. A measure of segment assets is not currently provided to the Chief Executive Officer and has therefore not been provided. As of March 31, 2019 , long-lived assets were predominantly located in the United States. No individual foreign country represented a material portion of our consolidated revenue during the three months ended March 31, 2019 . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We file a consolidated federal income tax return for all of our wholly owned subsidiaries. For the three months ended March 31, 2019 and 2018 , income tax expense was $81 and $80 , respectively. Our effective tax rate for the three months ended March 31, 2019 and 2018 was 33.3% and 21.7% , respectively. The effective tax rate for the three months ended March 31, 2019 was primarily impacted by the increase to the valuation allowance related to the federal research and development credits that are no longer expected to be realizable. The effective tax rate for the three months ended March 31, 2018 was primarily 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, 2019 will be approximately 24% . As of March 31, 2019 and December 31, 2018 , we had a valuation allowance related to deferred tax assets of $88 and $66 , respectively, that were not likely to be realized due to certain net operating loss limitations, including tax credits, and acquired net operating losses that were not more likely than not going to be utilized. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Capital Return Program For the period from April 1, 2019 to April 22, 2019 we repurchased 38 shares of our common stock on the open market for an aggregate purchase price of $224 , including fees and commissions. On April 23, 2019 , our board of directors declared a quarterly dividend on our common stock in the amount of $0.0121 per share of common stock payable on May 31, 2019 to stockholders of record as of the close of business on May 10, 2019 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements of Holdings have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany transactions have been eliminated in consolidation. 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, income taxes |
Fair Value Measurements | 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. |
Recent Accounting Pronouncements and Recently Adopted Accounting Policies | Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The amendments in this ASU align the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset in the balance sheet and expensed over the term of the hosting arrangement to the same line item in the statement of income as the costs related to the hosting fees. The guidance in this ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted including adoption in any interim period. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after adoption. This ASU will not have a material impact on our consolidated statements of operations. Recently Adopted Accounting Policies ASU 2016-02, Leases (Topic 842). In February 2016, FASB issued ASU 2016-02 which requires companies 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, measure, and present 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. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements , amending certain aspects of the new leasing standard. The amendment allows an additional optional transition method whereby an entity records a cumulative effect adjustment to opening retained earnings in the year of adoption without restating prior periods. We adopted this ASU on January 1, 2019 and elected the additional transition method per ASU 2018-11. Our leases consist of repeater leases, facility leases and equipment leases. We elected the package of practical expedients permitted under the transition guidance within the new standard. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities of approximately $347 and $369 , respectively, as of January 1, 2019. The standard did not impact our consolidated statements of operations, consolidated statements of cash flows or debt. Additionally, we did not record a cumulative effect adjustment to opening retained earnings. |
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, restricted stock units and convertible debt) 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, advertising customers and other customers, 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 two reporting units 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. |
Indefinite Life Intangible Assets | We have identified our FCC licenses and the Pandora, XM and Automatic 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. As part of the Pandora Acquisition, we also identified $331 related to its trademarks, for which the fair value was determined using the relief from royalty method as of the acquisition date. We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary services. Each of the FCC licenses authorizes us to use radio spectrum, a 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 March 31, 2019 , there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three months ended March 31, 2019 and 2018 . |
Equity Method Investments | 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. |
Commitments and Contingencies | 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. |
Business & Basis of Presentat_2
Business & Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassification | For the Three Months Ended March 31, 2018 As Reported Reclassification Current Year Subscriber revenue $ 1,117 $ 141 $ 1,258 Advertising revenue 42 — 42 Equipment revenue 35 — 35 Other revenue 181 (141 ) 40 Total revenue $ 1,375 $ — $ 1,375 |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable | The table below shows the value of the consideration paid in connection with the Pandora Acquisition: Total Pandora common stock outstanding 272 Exchange ratio 1.44 Common stock issued 392 Price per share of Holdings common stock $ 5.83 Value of common stock issued to Pandora stockholders $ 2,285 Value of replacement equity awards attributable to pre-combination service $ 70 Consideration of common stock and replacement equity awards for pre-combination service $ 2,355 Sirius XM’s Pandora preferred stock investment (related party fair value instrument) canceled $ 524 Total consideration for transactions $ 2,879 Value attributed to par at $0.001 par value $ 1 Balance to capital in excess of par value $ 2,354 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date: Acquired Assets: Cash and cash equivalents $ 313 Receivables, net 361 Prepaid expenses and other current assets 109 Property and equipment 65 Intangible assets 1,107 Goodwill 1,541 Deferred tax assets 83 Operating lease right-of-use assets 96 Long term assets 7 Total assets $ 3,682 Assumed Liabilities: Accounts payable and accrued expenses $ 302 Deferred revenue 37 Operating lease current liabilities 27 Current maturities of debt 151 Long-term debt (a) 218 Operating lease liabilities 62 Other long-term liabilities 6 Total liabilities $ 803 Total Consideration $ 2,879 (a) In order to present the assets acquired and liabilities assumed, the conversion feature associated with the convertible notes for $68 has been included within Long-term debt in the table above and included within Additional paid-in-capital within our unaudited statements of stockholders' equity (deficit). Refer to note 12 for additional information. |
Acquisition, Pro Forma Information | The following pro forma financial information presents our results as if the Pandora Acquisition had occurred on January 1, 2018: For the Three Months Ended March 31, 2019 2018 Total revenue $ 1,860 $ 1,697 Net income $ 181 $ 172 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of assets and liabilities measured at fair value | Our assets and liabilities measured at fair value were as follows: March 31, 2019 December 31, 2018 Level 1 Level 2 Level 3 Total Fair Level 1 Level 2 Level 3 Total Fair Assets: Pandora investment (a) — — — $ — — $ 523 — $ 523 Liabilities: Debt (b) — $ 7,403 — $ 7,403 — $ 6,633 — $ 6,633 (a) During the year ended December 31, 2017, Sirius XM completed a $480 preferred stock investment in Pandora. Prior to the Pandora Acquisition, we elected the fair value option to account for this investment. This investment was canceled in conjunction with the Pandora Acquisition. Refer to Note 2 for information on this acquisition. (b) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 12 for information related to the carrying value of our debt as of March 31, 2019 and December 31, 2018 . |
Schedule of new ASU adoption impact on financial statements | The effect of the changes made to our consolidated balance sheet as of January 1, 2019 for the adoption of ASU 2016-02 is included in the table below. Balance at December 31, 2018 Adjustments Due to ASU 2016-02 Balance at January 1, 2019 Balance Sheet Assets: Operating lease right-of-use assets $ — $ 347 $ 347 Liabilities: Accounts payable and accrued expenses $ 736 $ (1 ) $ 735 Operating lease current liabilities — 30 30 Operating lease liabilities — 339 339 Other long-term liabilities 102 (21 ) 81 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | For the Three Months Ended March 31, 2019 2018 Numerator: Net Income available to common stockholders for basic net income per common share $ 162 $ 289 Effect of interest on assumed conversions of convertible debt, net of tax 1 — Net Income available to common stockholders for dilutive net income per common share $ 163 $ 289 Denominator: Weighted average common shares outstanding for basic net income per common share 4,571 4,491 Weighted average impact of assumed Convertible Notes 25 — Weighted average impact of dilutive equity instruments 82 95 Weighted average shares for diluted net income per common share 4,678 4,586 Net income per common share: Basic $ 0.04 $ 0.06 Diluted $ 0.03 $ 0.06 |
Receivables, net (Tables)
Receivables, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Accounts receivable, net | Receivables, net, consists of the following: March 31, 2019 December 31, 2018 Gross customer accounts receivable $ 465 $ 105 Allowance for doubtful accounts (20 ) (7 ) Customer accounts receivable, net $ 445 $ 98 Receivables from distributors 121 107 Other receivables 26 28 Total receivables, net $ 592 $ 233 |
Inventory, net (Tables)
Inventory, net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of inventory, net | Inventory, net, consists of the following: March 31, 2019 December 31, 2018 Raw materials $ 6 $ 5 Finished goods 20 23 Allowance for obsolescence (6 ) (6 ) Total inventory, net $ 20 $ 22 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of indefinite-lived intangible assets | Our intangible assets include the following: March 31, 2019 December 31, 2018 Weighted Gross Accumulated Amortization Net Carrying Gross Accumulated Amortization Net Carrying Indefinite life intangible assets: FCC licenses Indefinite $ 2,084 $ — $ 2,084 $ 2,084 $ — $ 2,084 Trademarks Indefinite 251 — 251 251 — 251 Definite life intangible assets: OEM relationships 15 years 220 (79 ) 141 220 (76 ) 144 Licensing agreements 12 years 45 (39 ) 6 45 (38 ) 7 Software and technology 7 years 35 (21 ) 14 35 (20 ) 15 Due to Pandora Acquisition: Indefinite life intangible assets: Trademarks Indefinite $ 331 $ — $ 331 $ — $ — $ — Definite life intangible assets: Customer relationships 8 years 403 (9 ) 394 — — — Software and technology 5 years 373 (13 ) 360 — — — Total intangible assets $ 3,742 $ (161 ) $ 3,581 $ 2,635 $ (134 ) $ 2,501 |
Schedule of finite-lived intangible assets | Our intangible assets include the following: March 31, 2019 December 31, 2018 Weighted Gross Accumulated Amortization Net Carrying Gross Accumulated Amortization Net Carrying Indefinite life intangible assets: FCC licenses Indefinite $ 2,084 $ — $ 2,084 $ 2,084 $ — $ 2,084 Trademarks Indefinite 251 — 251 251 — 251 Definite life intangible assets: OEM relationships 15 years 220 (79 ) 141 220 (76 ) 144 Licensing agreements 12 years 45 (39 ) 6 45 (38 ) 7 Software and technology 7 years 35 (21 ) 14 35 (20 ) 15 Due to Pandora Acquisition: Indefinite life intangible assets: Trademarks Indefinite $ 331 $ — $ 331 $ — $ — $ — Definite life intangible assets: Customer relationships 8 years 403 (9 ) 394 — — — Software and technology 5 years 373 (13 ) 360 — — — Total intangible assets $ 3,742 $ (161 ) $ 3,581 $ 2,635 $ (134 ) $ 2,501 |
Expected future amortization expense | The expected amortization expense for each of the fiscal years 2019 through 2023 and for periods thereafter is as follows: Years ending December 31, Amount 2019 (remaining) $ 114 2020 152 2021 146 2022 144 2023 134 Thereafter 225 Total definite life intangible assets, net $ 915 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net | Property and equipment, net, consists of the following: March 31, 2019 December 31, 2018 Satellite system $ 1,587 $ 1,587 Terrestrial repeater network 99 98 Leasehold improvements 76 58 Broadcast studio equipment 112 111 Capitalized software and hardware 875 824 Satellite telemetry, tracking and control facilities 80 76 Furniture, fixtures, equipment and other 101 97 Land 38 38 Building 63 63 Construction in progress 486 412 Total property and equipment 3,517 3,364 Accumulated depreciation and amortization (1,931 ) (1,851 ) Property and equipment, net $ 1,586 $ 1,513 |
Summary of orbiting satellites | The chart below provides certain information on our satellites as of March 31, 2019 : 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 |
Years in which 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 2026 |
Construction in progress | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, net | Construction in progress consists of the following: March 31, 2019 December 31, 2018 Satellite system $ 321 $ 296 Terrestrial repeater network 5 5 Capitalized software and hardware 117 77 Other 43 34 Construction in progress $ 486 $ 412 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: For the Three Months Ended March 31, 2019 Operating lease cost $ 17 Finance lease cost Amortization of right-of-use assets 1 Sublease income (1 ) Total lease cost $ 17 Supplemental cash flow information related to leases was as follows: For the Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 17 Financing cash flows from finance leases $ 1 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2 |
Lessee, Operating And Finance Leases, Supplemental Information | Supplemental balance sheet information related to leases was as follows: March 31, 2019 Operating Leases Operating lease right-of-use assets $ 428 Operating lease current liabilities 46 Operating lease liabilities 397 Total operating lease liabilities $ 443 March 31, 2019 Finance Leases Property and equipment, gross $ 31 Accumulated depreciation (22 ) Property and equipment, net $ 9 Current maturities of debt $ 4 Long-term debt 1 Total finance lease liabilities $ 5 March 31, 2019 Weighted Average Remaining Lease Term Operating leases 10 years Finance leases 2 years March 31, 2019 Weighted Average Discount Rate Operating leases 5.3 % Finance leases 1.9 % |
Maturities of Finance Lease Liabilities | Maturities of lease liabilities were as follows: Operating Leases Finance Leases Year ending December 31, 2019 (remaining) $ 48 $ 3 2020 70 2 2021 59 1 2022 56 — 2023 53 — Thereafter 290 — Total future minimum lease payments 576 6 Less imputed interest (133 ) (1 ) Total $ 443 $ 5 |
Maturities of Operating Lease Liabilities | Maturities of lease liabilities were as follows: Operating Leases Finance Leases Year ending December 31, 2019 (remaining) $ 48 $ 3 2020 70 2 2021 59 1 2022 56 — 2023 53 — Thereafter 290 — Total future minimum lease payments 576 6 Less imputed interest (133 ) (1 ) Total $ 443 $ 5 |
Related Party Transactions (Tab
Related Party Transactions (Tables) - Equity Method Investee | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transaction [Line Items] | |
Summary of related party balances | We had the following related party balances associated with Sirius XM Canada: March 31, 2019 December 31, 2018 Related party current assets $ 12 $ 11 Related party long-term assets $ 448 $ 437 Related party current liabilities $ 4 $ 4 Related party long-term liabilities $ 3 $ 4 |
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 March 31, 2019 2018 Revenue (a) $ 24 $ 24 Other income Share of net earnings (b) $ 3 $ 1 Interest income (c) $ 2 $ 3 (a) We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income. (b) For both the three months ended March 31, 2019 and 2018 , Share of net earnings included $1 of amortization expense related to equity method intangible assets. (c) This interest income relates to the loan to Sirius XM Canada and is recorded as Other income (expense) in our unaudited consolidated statements of comprehensive income. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Our debt as of March 31, 2019 and December 31, 2018 consisted of the following: Carrying value (a) at Issuer / Borrower Issued Debt Maturity Date Interest Payable Principal Amount at March 31, 2019 March 31, 2019 December 31, 2018 Pandora December 2015 1.75% Convertible Senior Notes December 1, 2020 semi-annually on June 1 and December 1 $ 1 $ 1 $ — Sirius XM July 2017 3.875% Senior Notes August 1, 2022 semi-annually on February 1 and August 1 1,000 994 994 Sirius XM May 2013 4.625% Senior Notes May 15, 2023 semi-annually on May 15 and November 15 500 497 497 Pandora June 2018 1.75% Convertible Senior Notes December 1, 2023 semi-annually on June 1 and December 1 193 151 — Sirius XM May 2014 6.00% Senior Notes July 15, 2024 semi-annually on January 15 and July 15 1,500 1,490 1,490 Sirius XM March 2015 5.375% Senior Notes April 15, 2025 semi-annually on April 15 and October 15 1,000 993 992 Sirius XM May 2016 5.375% Senior Notes July 15, 2026 semi-annually on January 15 and July 15 1,000 991 991 Sirius XM July 2017 5.00% Senior Notes August 1, 2027 semi-annually on February 1 and August 1 1,500 1,488 1,487 Sirius XM December 2012 Senior Secured Revolving Credit Facility (the "Credit Facility") June 29, 2023 variable fee paid quarterly 1,750 582 439 Sirius XM Various Finance leases Various n/a n/a 5 5 Total Debt 7,192 6,895 Less: total current maturities 4 3 Less: total deferred financing costs 7 7 Total long-term debt $ 7,181 $ 6,885 (a) The carrying value of the obligations is net of any remaining unamortized original issue discount. (b) Holdings has unconditionally guaranteed all of the payment obligations of Pandora under these notes. (c) We acquired $152 in principal amount of the 1.75% Convertible Senior Notes due 2020 as part of the Pandora Acquisition. On February 14, 2019, Pandora announced a tender offer to repurchase for cash any and all of its outstanding 1.75% Convertible Senior Notes due 2020 at a price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to, but not including, the repurchase date. On March 18, 2019, we purchased $ 151 in aggregate principal amount of the 1.75% Convertible Senior Notes due 2020 that had been validly tendered and not validly withdrawn in the repurchase offer. We recorded $1 Loss on extinguishment of debt in connection with this transaction. In addition, we unwound the capped call security acquired as part of the Pandora Acquisition in March 2019 for $3 . (d) Substantially all material domestic subsidiaries, including Pandora and its subsidiaries, that guarantee the credit facility have guaranteed these notes. (e) We acquired $193 in principal amount of the 1.75% Convertible Senior Notes due 2023 as part of the Pandora Acquisition. We allocate the principal amount of the 1.75% Convertible Senior Notes due 2023 between the liability and equity components. The value assigned to the debt components of the 1.75% Convertible Senior Notes due 2023 is the estimated fair value as of the issuance date of similar debt without the conversion feature. The difference between the fair value of the debt and this estimated fair value represents the value which has been assigned to the equity component. The equity component is recorded to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the Notes over the carrying amount of the liability component is recorded as a debt discount, and is being amortized to interest expense using the effective interest method through the December 1, 2023 maturity date. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of dividends declared | During the three months ended March 31, 2019 , we declared and paid the following dividends: Declaration Date Dividend Per Share Record Date Total Amount Payment Date January 29, 2019 $ 0.0121 February 11, 2019 $ 57 February 28, 2019 |
Schedule of repurchase agreements | The following table summarizes our total share repurchase activity for the three months ended: March 31, 2019 March 31, 2018 Share Repurchase Type Shares Amount Shares Amount Open Market and Privately Negotiated Repurchases (a) 101 $ 604 52 $ 295 (a) As of March 31, 2019 , $28 of common stock repurchases had not settled, nor been retired, and were recorded as Treasury stock within our unaudited consolidated balance sheets and unaudited consolidated statements of stockholders’ (deficit) equity. For a discussion of subsequent events refer to Note 18. |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: For the Three Months Ended March 31, 2019 2018 Risk-free interest rate 2.5% 2.4% Expected life of options — years 3.36 3.57 Expected stock price volatility 26% 21% Expected dividend yield 0.8% 0.7% |
Stock options activity under share-based payment plans | The following table summarizes stock option activity under our share-based plans for the three months ended March 31, 2019 : Options Weighted- Weighted- Aggregate Outstanding as of December 31, 2018 243 $ 4.22 Options granted in connection with Pandora Acquisition 7 $ 3.85 Granted 13 $ 6.00 Exercised (4 ) $ 3.58 Forfeited, cancelled or expired (1 ) $ 5.48 Outstanding as of March 31, 2019 258 $ 4.30 6.15 $ 386 Exercisable as of March 31, 2019 150 $ 3.66 5.05 $ 303 |
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 three months ended March 31, 2019 : Shares Grant Date Nonvested as of December 31, 2018 35 $ 5.50 Units granted in connection with Pandora Acquisition 48 $ 5.83 Granted 11 $ 5.92 Vested (13 ) $ 5.82 Forfeited (2 ) $ 5.79 Nonvested as of March 31, 2019 79 $ 5.69 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Expected contractual cash commitments | The following table summarizes our expected contractual cash commitments as of March 31, 2019 : 2019 2020 2021 2022 2023 Thereafter Total Debt obligations $ 3 $ 2 $ 1 $ 1,000 $ 1,275 $ 5,000 $ 7,281 Cash interest payments 232 367 367 367 304 632 2,269 Satellite and transmission 76 51 4 2 1 3 137 Programming and content 193 227 129 56 33 130 768 Sales and marketing 28 12 11 7 4 11 73 Satellite incentive payments 8 10 9 9 9 53 98 Operating lease obligations 49 74 59 52 45 171 450 Advertising sales commitments 15 20 15 — — — 50 Royalties, minimum guarantees and other 337 181 100 30 12 7 667 Total (1) $ 941 $ 944 $ 695 $ 1,523 $ 1,683 $ 6,007 $ 11,793 (1) The table does not include our reserve for uncertain tax positions, which at March 31, 2019 totaled $8 . |
Segments and Geographic Infor_2
Segments and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment revenue and gross profit were as follows during the periods presented: For the Three Months Ended March 31, 2019 Sirius XM Pandora Total Revenue Subscriber revenue $ 1,370 $ 88 $ 1,458 Advertising revenue 46 163 209 Equipment revenue 41 — 41 Other revenue 36 — 36 Total revenue 1,493 251 1,744 Cost of services (a) (569 ) (170 ) (739 ) Segment gross profit $ 924 $ 81 $ 1,005 |
Reconciliation of Revenue from Segments to Consolidated | The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows: Three Months Ended March 31, 2019 Segment Gross Profit $ 1,005 Subscriber acquisition costs (108 ) Sales and marketing (a) (168 ) Engineering, design and development (a) (45 ) General and administrative (a) (119 ) Depreciation and amortization (107 ) Share-based payment expense (49 ) Acquisition and other related costs (76 ) Total other expense (90 ) Consolidated income before income taxes $ 243 (a) Share-based payment expense includes $9 related to cost of services, $15 related to sales and marketing, $9 related to engineering, design and development and $16 related to general and administrative. |
Business & Basis of Presentat_3
Business & Basis of Presentation (Details) subscriber in Millions, active_user in Millions | 3 Months Ended |
Mar. 31, 2019active_usersubscribersegmentsatellite_radio_system | |
Related Party Transaction [Line Items] | |
Number of reportable segments | segment | 2 |
Number of satellite radio systems | satellite_radio_system | 2 |
Common Stock | Management | Liberty Media | |
Related Party Transaction [Line Items] | |
Related party ownership percentage | 68.00% |
Sirius XM | |
Related Party Transaction [Line Items] | |
Number of subscribers | 34.2 |
Pandora | |
Related Party Transaction [Line Items] | |
Number of subscribers | 6.9 |
Number of ad-supported active users | active_user | 66 |
Business & Basis of Presentat_4
Business & Basis of Presentation - Reclassification (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | $ 1,744 | $ 1,375 |
Subscription Revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 1,458 | 1,258 |
Advertising revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 209 | 42 |
Equipment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 41 | 35 |
Other revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | $ 36 | 40 |
Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 1,375 | |
Previously Reported | Subscription Revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 1,117 | |
Previously Reported | Advertising revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 42 | |
Previously Reported | Equipment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 35 | |
Previously Reported | Other revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 181 | |
Restatement Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 0 | |
Restatement Adjustment | Subscription Revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 141 | |
Restatement Adjustment | Advertising revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 0 | |
Restatement Adjustment | Equipment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | 0 | |
Restatement Adjustment | Other revenue | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Revenue | $ (141) |
Acquisition (Details)
Acquisition (Details) $ in Millions | Feb. 01, 2019USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Feb. 14, 2019 | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||
Cash received from Pandora Acquisition | $ 313 | $ 0 | |||
Goodwill | 3,831 | $ 2,290 | |||
Pandora | |||||
Business Acquisition [Line Items] | |||||
Consideration of common stock and replacement equity awards for pre-combination service | $ 2,355 | ||||
Purchase price | $ 2,879 | ||||
Exchange ratio (in shares per share) | 1.44 | ||||
Sirius XM’s Pandora preferred stock investment (related party fair value instrument) canceled | $ 524 | ||||
Cash received from Pandora Acquisition | 313 | ||||
Goodwill | $ 1,541 | ||||
Finite-lived intangible assets | 776 | ||||
Gross operating loss carryforwards | $ 1,199 | ||||
Customer Relationships | Pandora | |||||
Business Acquisition [Line Items] | |||||
Weighted Average Useful Lives | 8 years | ||||
Software and technology | Pandora | |||||
Business Acquisition [Line Items] | |||||
Weighted Average Useful Lives | 5 years | ||||
Senior Notes | 1.75% Senior Notes Due 2020 | |||||
Business Acquisition [Line Items] | |||||
Stated interest rate (as a percent) | 1.75% | ||||
Senior Notes | 1.75% Senior Notes Due 2020 | Pandora | |||||
Business Acquisition [Line Items] | |||||
Stated interest rate (as a percent) | 1.75% | 1.75% | |||
Senior Notes | 1.75% Senior Notes Due 2023 | |||||
Business Acquisition [Line Items] | |||||
Stated interest rate (as a percent) | 1.75% | ||||
Trademarks | Pandora | |||||
Business Acquisition [Line Items] | |||||
Fair value of acquired trademarks | $ 331 |
Acquisition - Consideration Tra
Acquisition - Consideration Transferred (Details) - Pandora $ / shares in Units, shares in Millions, $ in Millions | Feb. 01, 2019USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Pandora common stock outstanding at February 1, 2019 (shares) | $ 272 |
Exchange ratio (in shares per share) | 1.44 |
Price per share of Holdings common stock as of February 1, 2019 (in dollars per share) | $ / shares | $ 5.83 |
Value of common stock issued to Pandora stockholders pursuant to the transactions | $ 2,285 |
Value of replacement equity awards attributable to pre-combination service | 70 |
Consideration of common stock and replacement equity awards for pre-combination service | 2,355 |
Sirius XM’s Pandora preferred stock investment (related party fair value instrument) canceled | 524 |
Purchase price | 2,879 |
Value attributed to par at $0.001 par value | 1 |
Balance to capital in excess of par value | $ 2,354 |
Common Stock | |
Business Acquisition [Line Items] | |
Common stock issued (in shares) | shares | 392 |
Acquisition - Schedule of Acqui
Acquisition - Schedule of Acquisition (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Feb. 01, 2019 | Dec. 31, 2018 |
Acquired Assets: | |||
Goodwill | $ 3,831 | $ 2,290 | |
Assumed Liabilities: | |||
Conversion feature of debt | $ 68 | ||
Pandora | |||
Acquired Assets: | |||
Cash and cash equivalents | 313 | ||
Receivables, net | 361 | ||
Prepaid expenses and other current assets | 109 | ||
Property and equipment | 65 | ||
Intangible assets | 1,107 | ||
Goodwill | 1,541 | ||
Deferred tax assets | 83 | ||
Operating lease right-of-use assets | 96 | ||
Long term assets | 7 | ||
Total assets | 3,682 | ||
Assumed Liabilities: | |||
Accounts payable and accrued expenses | 302 | ||
Deferred revenue | 37 | ||
Operating lease current liabilities | 27 | ||
Current maturities of debt | 151 | ||
Long-term debt | 218 | ||
Operating lease liabilities | 62 | ||
Other long-term liabilities | 6 | ||
Total liabilities | 803 | ||
Total Consideration | $ 2,879 |
Acquisition - Pro Forma Informa
Acquisition - Pro Forma Information (Details) - Pandora - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Business Acquisition [Line Items] | ||
Revenue | $ 251 | |
Net income | 122 | |
Total revenue | 1,860 | $ 1,697 |
Net income | $ 181 | $ 172 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt | $ 7,403 | $ 6,633 | ||
Investment | 5 | $ 0 | ||
Fair Value, Inputs, Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt | 0 | 0 | ||
Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt | 7,403 | 6,633 | ||
Fair Value, Inputs, Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt | 0 | 0 | ||
Pandora | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Pandora investment | 0 | 523 | ||
Pandora | Fair Value, Inputs, Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Pandora investment | 0 | 0 | ||
Pandora | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Pandora investment | 0 | 523 | ||
Pandora | Fair Value, Inputs, Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Pandora investment | $ 0 | $ 0 | ||
Investee | Pandora | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment | $ 480 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss), net of tax | $ 1 | $ (6) | ||
Foreign currency translation adjustment, net of tax | 7 | $ (9) | ||
Foreign currency translation adjustment, tax | (2) | $ 3 | ||
Operating lease right-of-use assets | 428 | $ 347 | $ 0 | |
Operating lease liability | $ 443 | |||
Accounting Standards Update 2016-02 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Operating lease right-of-use assets | 347 | |||
Operating lease liability | $ 369 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Effect of ASU 2016-02 (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Prepaid expenses and other current assets | $ 221 | $ 158 | |
Operating lease right-of-use assets | 428 | $ 347 | 0 |
Accounts payable and accrued expenses | 1,072 | 735 | 736 |
Operating lease current liabilities | 46 | 30 | 0 |
Operating lease liabilities | 397 | 339 | 0 |
Other long-term liabilities | $ 91 | 81 | $ 102 |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | 347 | ||
Accounts payable and accrued expenses | (1) | ||
Operating lease current liabilities | 30 | ||
Operating lease liabilities | 339 | ||
Other long-term liabilities | $ (21) |
Earnings per Share - Additional
Earnings per Share - Additional Information (Details) - shares | Feb. 01, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||
Participating securities (in shares) | 0 | 0 | |
Anti-dilutive common stock equivalents (in shares) | 60,000,000 | 44,000,000 | |
Common Stock | Pandora | |||
Business Acquisition [Line Items] | |||
Common stock issued (in shares) | 392,000,000 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net Income available to common stockholders for basic net income per common share | $ 162 | $ 289 |
Effect of interest on assumed conversions of convertible debt, net of tax | 1 | 0 |
Net Income available to common stockholders for dilutive net income per common share | $ 163 | $ 289 |
Denominator: | ||
Weighted average common shares outstanding for basic net income per common share (in shares) | 4,571 | 4,491 |
Weighted average impact of assumed Convertible Senior Notes conversion (in shares) | 25 | 0 |
Weighted average impact of dilutive equity instruments | 82 | 95 |
Weighted average shares for diluted net income per common share (in shares) | 4,678 | 4,586 |
Net income per common share: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.06 |
Diluted (in dollars per share) | $ 0.03 | $ 0.06 |
Receivables, net (Details)
Receivables, net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts receivable, net | ||
Gross customer accounts receivable | $ 465 | $ 105 |
Allowance for doubtful accounts | (20) | (7) |
Customer accounts receivable, net | 445 | 98 |
Receivables from distributors | 121 | 107 |
Other receivables | 26 | 28 |
Total receivables, net | $ 592 | $ 233 |
Inventory, net (Details)
Inventory, net (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6 | $ 5 |
Finished goods | 20 | 23 |
Allowance for obsolescence | (6) | (6) |
Total inventory, net | $ 20 | $ 22 |
Goodwill (Details)
Goodwill (Details) | 3 Months Ended | |||
Mar. 31, 2019USD ($)reporting_unit | Mar. 31, 2018USD ($) | Feb. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | ||||
Number of reporting units | reporting_unit | 2 | |||
Impairment losses for goodwill | $ 0 | $ 0 | ||
Accumulated impairment of goodwill since the merger | 4,766,000,000 | |||
Goodwill | $ 3,831,000,000 | $ 2,290,000,000 | ||
Pandora | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,541,000,000 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Definite life intangible assets: | ||
Accumulated Amortization | $ (161) | $ (134) |
Net Carrying Value | 915 | |
Gross Carrying Value | ||
Total intangible assets | 3,742 | 2,635 |
Net Carrying Value | ||
Total intangible assets | 3,581 | 2,501 |
FCC licenses | ||
Indefinite life intangible assets: | ||
Gross Carrying Value | 2,084 | 2,084 |
Net Carrying Value | 2,084 | 2,084 |
Trademarks | ||
Indefinite life intangible assets: | ||
Gross Carrying Value | 251 | 251 |
Net Carrying Value | 251 | 251 |
Trademarks | Pandora | ||
Indefinite life intangible assets: | ||
Gross Carrying Value | 331 | |
Net Carrying Value | $ 331 | |
OEM relationships | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 15 years | |
Gross Carrying Value | $ 220 | 220 |
Accumulated Amortization | (79) | (76) |
Net Carrying Value | $ 141 | 144 |
Customer relationships | Pandora | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 8 years | |
Gross Carrying Value | $ 403 | |
Accumulated Amortization | (9) | |
Net Carrying Value | $ 394 | |
Licensing agreements | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 12 years | |
Gross Carrying Value | $ 45 | 45 |
Accumulated Amortization | (39) | (38) |
Net Carrying Value | $ 6 | 7 |
Software and technology | ||
Definite life intangible assets: | ||
Weighted Average Useful Lives | 7 years | |
Gross Carrying Value | $ 35 | 35 |
Accumulated Amortization | (21) | (20) |
Net Carrying Value | 14 | $ 15 |
Software and technology | Pandora | ||
Definite life intangible assets: | ||
Gross Carrying Value | 373 | |
Accumulated Amortization | (13) | |
Net Carrying Value | $ 360 |
Intangible Assets - Indefinite
Intangible Assets - Indefinite Life Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | $ 0 | $ 0 | |
Trademarks | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible asset, trademark | 251,000,000 | $ 251,000,000 | |
Trademarks | Pandora | |||
Acquired Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible asset, trademark | $ 331,000,000 |
Intangible Assets - Definite Li
Intangible Assets - Definite Life Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Definite life intangible assets: | ||
Amortization of intangible assets | $ 27,000,000 | $ 6,000,000 |
Retired | ||
Definite life intangible assets: | ||
Intangible assets | 0 | |
Pandora | ||
Definite life intangible assets: | ||
Finite-lived intangible assets | $ 776,000,000 |
Intangible Assets - Expected Am
Intangible Assets - Expected Amortization Expense for Each of the Fiscal Years (Details) $ in Millions | Mar. 31, 2019USD ($) |
Expected amortization expense for each of the fiscal years | |
2019 (remaining) | $ 114 |
2020 | 152 |
2021 | 146 |
2022 | 144 |
2023 | 134 |
Thereafter | 225 |
Net Carrying Value | $ 915 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,517 | $ 3,364 |
Accumulated depreciation and amortization | (1,931) | (1,851) |
Property and equipment, net | 1,586 | 1,513 |
Satellite system | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,587 | 1,587 |
Terrestrial repeater network | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 99 | 98 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 76 | 58 |
Broadcast studio equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 112 | 111 |
Capitalized software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 875 | 824 |
Satellite telemetry, tracking and control facilities | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 80 | 76 |
Furniture, fixtures, equipment and other | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 101 | 97 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 38 | 38 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 63 | 63 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 486 | $ 412 |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Construction in Progress (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Construction in progress | $ 486 | $ 412 |
Satellite system | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 321 | 296 |
Terrestrial repeater network | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 5 | 5 |
Capitalized software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 117 | 77 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | $ 43 | $ 34 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2019USD ($)satellite | Mar. 31, 2018USD ($) | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense on property and equipment | $ 80,000,000 | $ 66,000,000 |
Disposal of property and equipment | 0 | 0 |
Capitalized interest costs | 4,000,000 | 2,000,000 |
Capitalized stock-based compensation costs | $ 3,000,000 | $ 0 |
Number of owned satellites | satellite | 5 |
Leases (Details)
Leases (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Finance lease, renewal term (years) | 5 years |
Operating lease not yet commenced, value | $ 33 |
Operating lease not yet commenced, term | 11 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease obligations, term (years) | 1 year |
Finance lease obligations, term (years) | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease obligations, term (years) | 19 years |
Finance lease obligations, term (years) | 19 years |
Operating lease, renewal term (years) | 5 years |
Option to terminate lease, term of option (years) | 1 year |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 17 |
Amortization of right-of-use assets | 1 |
Sublease income | (1) |
Total lease cost | $ 17 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 17 |
Financing cash flows from finance leases | 1 |
Operating leases | $ 2 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Lease [Abstract] | |||
Operating lease right-of-use assets | $ 428 | $ 347 | $ 0 |
Operating lease current liabilities | 46 | 30 | 0 |
Operating lease liabilities | 397 | $ 339 | $ 0 |
Total operating lease liabilities | 443 | ||
Finance Lease [Abstract] | |||
Property and equipment, gross | 31 | ||
Accumulated depreciation | (22) | ||
Property and equipment, net | 9 | ||
Current maturities of debt | 4 | ||
Long-term debt | 1 | ||
Total finance lease liabilities | $ 5 | ||
Weighted average remaining lease term, operating leases (years) | 10 years | ||
Weighted average remaining lease term, finance leases (years) | 2 years | ||
Weighted average discount rate, operating lease (as a percent) | 5.30% | ||
Weighted average discount rate, finance lease (as a percent) | 1.90% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | Mar. 31, 2019USD ($) |
Operating Lease Liabilities, Payments Due [Abstract] | |
2019 (remaining) | $ 48 |
2020 | 70 |
2021 | 59 |
2022 | 56 |
2023 | 53 |
Thereafter | 290 |
Total future minimum lease payments | 576 |
Less imputed interest | (133) |
Total operating lease liabilities | 443 |
Finance Lease Liabilities, Payments, Due [Abstract] | |
2019 (remaining) | 3 |
2020 | 2 |
2021 | 1 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total future minimum lease payments | 6 |
Less imputed interest | (1) |
Total finance lease liabilities | $ 5 |
Related Party Transactions - Li
Related Party Transactions - Liberty Media, Sirius XM Canada, Pandora - Additional Information (Details) $ / shares in Units, $ / shares in Units, shares in Millions, $ in Millions, $ in Millions | May 25, 2017USD ($) | Mar. 31, 2019USD ($)directorexecutive$ / sharesshares | Mar. 31, 2018USD ($) | May 24, 2017shareholder | Dec. 31, 2017USD ($)shares | Mar. 31, 2019$ / shares | Dec. 31, 2018USD ($) | May 25, 2017CAD ($) |
Related Party Transaction [Line Items] | ||||||||
Preferred stock liquidation preference per share (in Canadian dollars per share) | $ / shares | $ 0.001 | |||||||
Current portion of deferred revenue | $ 1,994 | $ 1,932 | ||||||
Deferred revenue, noncurrent | 145 | 149 | ||||||
Pandora | ||||||||
Related Party Transaction [Line Items] | ||||||||
Pandora investment | $ 0 | 523 | ||||||
Management | Liberty Media | Executives | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of related party members on the board of directors | executive | 2 | |||||||
Management | Liberty Media | Director | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of related party members on the board of directors | director | 1 | |||||||
Management | Liberty Media | Common Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party ownership percentage | 68.00% | |||||||
Equity Method Investee | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable, related parties | $ 131 | |||||||
Notes receivable, maturity period | 15 years | |||||||
Interest rate | 7.62% | |||||||
Annual principal repayment period | 60 days | |||||||
Annual prepayment cash threshold | $ 10 | |||||||
Notes receivable, repayment from related party | $ 3 | |||||||
Current portion of deferred revenue | $ 3 | 3 | ||||||
Deferred revenue, noncurrent | $ 2 | 2 | ||||||
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] | ||||||||
Period of agreement | 30 years | |||||||
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 | |||||||
Equity Method Investee | Sirius XM Canada | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity method investment, equity interest percentage | 70.00% | |||||||
Equity method investment, voting interest percentage | 33.00% | |||||||
Number of shareholders | shareholder | 2 | |||||||
Consideration transferred | $ 309 | |||||||
Payments to acquire equity method investments | 130 | |||||||
Consideration transferred, equity interests issued and issuable | $ 179 | |||||||
Number of preferred shares owned (in shares) | shares | 591 | |||||||
Preferred stock liquidation preference per share (in Canadian dollars per share) | $ / shares | $ 1 | |||||||
Notes receivable, related parties | $ 128 | 126 | ||||||
Equity method investments | 320 | 311 | ||||||
Maximum | Equity Method Investee | ||||||||
Related Party Transaction [Line Items] | ||||||||
Notes receivable, repayment from related party | 1 | |||||||
Maximum | Equity Method Investee | Sirius XM Canada | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity method investment, dividends, including reduction of investment | 1 | $ 1 | ||||||
Fair Value, Inputs, Level 2 | Pandora | ||||||||
Related Party Transaction [Line Items] | ||||||||
Pandora investment | $ 0 | $ 523 |
Related Party Transactions - Su
Related Party Transactions - Summary of Related Party Balances (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Related party current assets | $ 12 | $ 11 |
Related party long-term assets | 448 | 960 |
Related party current liabilities | 4 | 4 |
Related party long-term liabilities | 3 | 4 |
Equity Method Investee | Sirius XM Canada | ||
Related Party Transaction [Line Items] | ||
Related party current assets | 12 | 11 |
Related party long-term assets | 448 | 437 |
Related party current liabilities | 4 | 4 |
Related party long-term liabilities | $ 3 | $ 4 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Revenue and Other Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other income | ||
Share of net earnings | $ (4) | $ 1 |
Amortization of intangible assets | 27 | 6 |
Sirius XM Canada | Equity Method Investee | ||
Related Party Transaction [Line Items] | ||
Revenue | 24 | 24 |
Other income | ||
Share of net earnings | 3 | 1 |
Interest income | 2 | 3 |
Amortization of intangible assets | $ 1 | $ 1 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 18, 2019 | Feb. 14, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Feb. 01, 2019 | Dec. 31, 2018 |
Debt | |||||||
Capital leases | $ 5,000 | $ 5,000 | $ 5,000 | ||||
Total debt | 7,192,000 | 7,192,000 | 6,895,000 | ||||
Less: total current maturities | 4,000 | 4,000 | 3,000 | ||||
Less: total deferred financing costs for Notes | 7,000 | 7,000 | 7,000 | ||||
Total long-term debt | 7,181,000 | 7,181,000 | 6,885,000 | ||||
Loss on extinguishment of debt | 1,000 | $ 0 | |||||
Proceeds from sale of capped call security | 3,000 | $ 0 | |||||
Senior Secured Revolving Credit Facility | |||||||
Debt | |||||||
Principal amount | 1,750,000 | 1,750,000 | |||||
Carrying value | $ 582,000 | $ 582,000 | 439,000 | ||||
Credit facility, unused capacity, commitment fee percentage | 0.25% | ||||||
Senior Notes | 1.75% Senior Notes Due 2020 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 1.75% | 1.75% | |||||
Principal amount | $ 1,000 | $ 1,000 | |||||
Carrying value | $ 1,000 | 1,000 | 0 | ||||
Loss on extinguishment of debt | $ 1,000 | ||||||
Senior Notes | 3.875% Senior Notes Due 2022 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 3.875% | 3.875% | |||||
Principal amount | $ 1,000,000 | $ 1,000,000 | |||||
Carrying value | $ 994,000 | $ 994,000 | 994,000 | ||||
Senior Notes | 4.625% Senior Notes Due 2023 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 4.625% | 4.625% | |||||
Principal amount | $ 500,000 | $ 500,000 | |||||
Carrying value | $ 497,000 | $ 497,000 | 497,000 | ||||
Senior Notes | 1.75% Senior Notes Due 2023 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 1.75% | 1.75% | |||||
Principal amount | $ 193,000 | $ 193,000 | |||||
Carrying value | $ 151,000 | $ 151,000 | 0 | ||||
Senior Notes | 6.00% Senior Note Due 2024 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 6.00% | 6.00% | |||||
Principal amount | $ 1,500,000 | $ 1,500,000 | |||||
Carrying value | $ 1,490,000 | $ 1,490,000 | 1,490,000 | ||||
Senior Notes | 5.375% Senior Notes Due 2025 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 5.375% | 5.375% | |||||
Principal amount | $ 1,000,000 | $ 1,000,000 | |||||
Carrying value | $ 993,000 | $ 993,000 | 992,000 | ||||
Senior Notes | 5.375% Senior Notes Due 2026 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 5.375% | 5.375% | |||||
Principal amount | $ 1,000,000 | $ 1,000,000 | |||||
Carrying value | $ 991,000 | $ 991,000 | 991,000 | ||||
Senior Notes | 5.00% Senior Notes Due 2027 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 5.00% | 5.00% | |||||
Principal amount | $ 1,500,000 | $ 1,500,000 | |||||
Carrying value | $ 1,488,000 | $ 1,488,000 | $ 1,487,000 | ||||
Pandora | Senior Notes | 1.75% Senior Notes Due 2020 | |||||||
Debt | |||||||
Stated interest rate (as a percent) | 1.75% | 1.75% | 1.75% | ||||
Short-term debt | $ 152,000 | ||||||
Debt instrument redemption price (as a percent of aggregate principal) | 100.00% | ||||||
Pandora | Senior Notes | 1.75% Senior Notes Due 2020 | |||||||
Debt | |||||||
Extinguishment of debt | $ 151,000 |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Senior Secured Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum consolidated leverage ratio | 5 | |
Carrying value | $ 582 | $ 439 |
Senior Notes | 1.75% Senior Notes Due 2020 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 1.75% | |
Shares issued (shares per thousand dollars) | 0.0877 | |
Carrying value | $ 1 | 0 |
Senior Notes | 1.75% Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 1.75% | |
Shares issued (shares per thousand dollars) | 0.1504 | |
Carrying value | $ 151 | $ 0 |
Pandora | Senior Notes | 1.75% Senior Notes Due 2020 | ||
Debt Instrument [Line Items] | ||
Carrying value | 151 | |
Pandora | ||
Debt Instrument [Line Items] | ||
Letters of credit | $ 1 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - $ / shares | Feb. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
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) | 4,650,000,000 | 4,346,000,000 | |
Common stock, shares outstanding (in shares) | 4,645,000,000 | 4,346,000,000 | |
Common stock reserved for issuance (in shares) | 337,000,000 | ||
Pandora | |||
Business Acquisition [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.001 | ||
Common Stock | Pandora | |||
Business Acquisition [Line Items] | |||
Common stock issued (in shares) | 392,000,000 |
Stockholders' Equity - Quarterl
Stockholders' Equity - Quarterly Dividends (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 29, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Equity [Abstract] | |||
Dividends Per Share (in dollars per share) | $ 0.0121 | $ 0.0121 | $ 0.0110 |
Total Amount | $ 57 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) shares in Millions | Mar. 31, 2019USD ($)shares |
Class of Stock [Line Items] | |
Number of shares repurchased (in shares) | shares | 2,784 |
Aggregate cost for shares repurchased | $ 11,278,000,000 |
Remaining amount authorized under the stock repurchase program | 2,722,000,000 |
Common Stock | |
Class of Stock [Line Items] | |
Stock repurchase program, aggregate authorized amount | $ 14,000,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Repurchase Agreements (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Shares Repurchase Activity [Line Items] | |||
Amount | $ 604 | $ 295 | |
Treasury stock value | $ 28 | $ 0 | |
Open Market | |||
Shares Repurchase Activity [Line Items] | |||
Shares (in shares) | 101 | 52 | |
Amount | $ 604 | $ 295 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 |
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, shares in Millions, $ in Millions | Feb. 01, 2019USD ($) | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||
Share-based payment expense | $ (70) | $ (34) | ||
Goodwill | 3,831 | $ 2,290 | ||
Share-based payment expense | $ 70 | 34 | ||
Pandora | ||||
Business Acquisition [Line Items] | ||||
Exchange ratio (in shares per share) | 1.44 | |||
Goodwill | $ 1,541 | |||
Employees and Non Employee Stock Option | ||||
Business Acquisition [Line Items] | ||||
Grant date fair value of options (in dollars per share) | $ / shares | $ 1.26 | |||
Options exercised in period, intrinsic value | $ 10 | 55 | ||
Exercise of options and vesting of restricted stock units (in shares) | shares | 1 | |||
Share-based payment expense | $ 20 | 19 | ||
Pre-Acquisition Replacement Equity Awards | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 8 | |||
Restricted Stock Units (RSUs) and Performance Shares | ||||
Business Acquisition [Line Items] | ||||
Restricted stock units vested, intrinsic value | $ 74 | 1 | ||
Granted (in shares) | shares | 11 | |||
Share-based payment expense | $ 50 | $ 15 | ||
Restricted Stock Units (RSUs) | ||||
Business Acquisition [Line Items] | ||||
Exercise of options and vesting of restricted stock units (in shares) | shares | 7 | |||
Performance-based Share Awards | ||||
Business Acquisition [Line Items] | ||||
Granted (in shares) | shares | 5 | |||
Pre-Acquisition Replacement Equity Awards, Restricted Stock Units | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 62 | |||
Restricted Stock Units Rsu And Stock Options | ||||
Business Acquisition [Line Items] | ||||
Unrecognized compensation costs | $ 477 | $ 254 | ||
Weighted-average service period (in years) | 2 years | |||
Acquisition-related Costs | ||||
Business Acquisition [Line Items] | ||||
Share-based payment expense | $ (21) | |||
Maximum | Restricted Stock Units (RSUs) and Performance Shares | ||||
Business Acquisition [Line Items] | ||||
Restricted stock units granted (in shares) | shares | 1 |
Benefit Plans - 2015 Long-Term
Benefit Plans - 2015 Long-Term Stock Incentive Plan (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2019shares | |
Performance-based Share Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
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) | 153 |
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 - Other Plans (De
Benefit Plans - Other Plans (Details) | 3 Months Ended |
Mar. 31, 2019plan | |
Retirement Benefits [Abstract] | |
Number of other share-based benefit plans | 6 |
Benefit Plans - Fair Value of O
Benefit Plans - Fair Value of Options Granted (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Risk-free interest rate | 2.50% | 2.40% |
Expected life of options — years | 3 years 4 months 9 days | 3 years 6 months 25 days |
Expected stock price volatility | 26.00% | 21.00% |
Expected dividend yield | 0.80% | 0.70% |
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 Millions, $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Options | |
Outstanding as of beginning of period (in shares) | shares | 243 |
Awards granted in connection with Pandora Acquisition (in shares) | shares | 7 |
Granted (in shares) | shares | 13 |
Exercised (in shares) | shares | (4) |
Forfeited, cancelled or expired (in shares) | shares | (1) |
Outstanding as of end of period (in shares) | shares | 258 |
Exercisable (in shares) | shares | 150 |
Weighted- Average Exercise Price Per Share | |
Outstanding as of beginning of period (in dollars per share) | $ / shares | $ 4.22 |
Awards granted in connection with Pandora Acquisition (in dollars per share) | $ / shares | 3.85 |
Granted (in dollars per share) | $ / shares | 6 |
Exercised (in dollars per share) | $ / shares | 3.58 |
Forfeited, cancelled or expired (in dollars per share) | $ / shares | 5.48 |
Outstanding as of end of period (in dollars per share) | $ / shares | 4.30 |
Exercisable (in dollars per share) | $ / shares | $ 3.66 |
Weighted- Average Remaining Contractual Term (Years) | |
Outstanding | 6 years 1 month 24 days |
Exercisable | 5 years 18 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 386 |
Exercisable | $ | $ 303 |
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 Millions | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Shares | |
Nonvested as of beginning of period (in shares) | shares | 35 |
Units granted in connection with Pandora Acquisition (in shares) | shares | 48 |
Granted (in shares) | shares | 11 |
Vested (in shares) | shares | (13) |
Forfeited (in shares) | shares | (2) |
Nonvested as of end of period (in shares) | shares | 79 |
Grant Date Fair Value Per Share | |
Nonvested as of beginning of period (in dollars per share) | $ / shares | $ 5.50 |
Units granted in connection with Pandora Acquisition (in dollars per share) | $ / shares | 5.83 |
Granted (in dollars per share) | $ / shares | 5.92 |
Vested (in dollars per share) | $ / shares | 5.82 |
Forfeited (in dollars per share) | $ / shares | 5.79 |
Nonvested as of end of period (in dollars per share) | $ / shares | $ 5.69 |
Benefit Plans - 401(k) Savings
Benefit Plans - 401(k) Savings Plan (Details) - Sirius XM Savings Plan - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Defined Benefit Plan Disclosure [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 | $ 2 |
Benefit Plans - Sirius XM Holdi
Benefit Plans - Sirius XM Holdings Inc. Deferred Compensation Plan (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Deferred compensation contributions | $ 6 | $ 7 |
Fair value of investment assets related to deferred compensation plan | 30 | 22 |
Unrealized gains (losses) on investments | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Expected Contractual Cash Commitments (Details) $ in Millions | Mar. 31, 2019USD ($) |
Expected contractual cash commitments | |
2019 | $ 941 |
2020 | 944 |
2021 | 695 |
2022 | 1,523 |
2023 | 1,683 |
Thereafter | 6,007 |
Total | 11,793 |
Uncertain tax positions are recognized in other long-term liabilities | 8 |
Debt obligations | |
Expected contractual cash commitments | |
2019 | 3 |
2020 | 2 |
2021 | 1 |
2022 | 1,000 |
2023 | 1,275 |
Thereafter | 5,000 |
Total | 7,281 |
Cash interest payments | |
Expected contractual cash commitments | |
2019 | 232 |
2020 | 367 |
2021 | 367 |
2022 | 367 |
2023 | 304 |
Thereafter | 632 |
Total | 2,269 |
Satellite and transmission | |
Expected contractual cash commitments | |
2019 | 76 |
2020 | 51 |
2021 | 4 |
2022 | 2 |
2023 | 1 |
Thereafter | 3 |
Total | 137 |
Programming and content | |
Expected contractual cash commitments | |
2019 | 193 |
2020 | 227 |
2021 | 129 |
2022 | 56 |
2023 | 33 |
Thereafter | 130 |
Total | 768 |
Sales and marketing | |
Expected contractual cash commitments | |
2019 | 28 |
2020 | 12 |
2021 | 11 |
2022 | 7 |
2023 | 4 |
Thereafter | 11 |
Total | 73 |
Satellite incentive payments | |
Expected contractual cash commitments | |
2019 | 8 |
2020 | 10 |
2021 | 9 |
2022 | 9 |
2023 | 9 |
Thereafter | 53 |
Total | 98 |
Operating lease obligations | |
Expected contractual cash commitments | |
2019 | 49 |
2020 | 74 |
2021 | 59 |
2022 | 52 |
2023 | 45 |
Thereafter | 171 |
Total | 450 |
Advertising sales commitments | |
Expected contractual cash commitments | |
2019 | 15 |
2020 | 20 |
2021 | 15 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total | 50 |
Royalties, minimum guarantees and other | |
Expected contractual cash commitments | |
2019 | 337 |
2020 | 181 |
2021 | 100 |
2022 | 30 |
2023 | 12 |
Thereafter | 7 |
Total | $ 667 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) | Jan. 31, 2019USD ($) | Mar. 13, 2017USD ($) | Mar. 31, 2019USD ($)satellite |
Loss Contingencies [Line Items] | |||
Number of replacement satellites | satellite | 2 | ||
Telephone Consumer Protection Act Suits | |||
Loss Contingencies [Line Items] | |||
Litigation Settlement, Amount Awarded from Other Party | $ 25,000,000 | ||
Litigation Settlement, Amount Awarded To Other Party, Subscription, Term | 3 months | ||
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 (years) | 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 (years) | 1 year | ||
XM-5, FM-5, FM-6, XM-3, and XM-4 | |||
Loss Contingencies [Line Items] | |||
Operating performance over design life | 15 years | ||
XM-4 | |||
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 | ||
Advertising sales commitments | |||
Loss Contingencies [Line Items] | |||
Future minimum guarantee payments | 50,000,000 | ||
Minimum guarantee payments due in remainder of 2019 | 15,000,000 | ||
Royalty Arrangement | |||
Loss Contingencies [Line Items] | |||
Prepayments made of minimum guarantee payments | 11,000,000 | ||
Future minimum guarantee payments | 250,000,000 | ||
Minimum guarantee payments due in remainder of 2019 | $ 189,000,000 |
Segments and Geographic Infor_3
Segments and Geographic Information (Details) subscriber in Millions, active_user in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)active_usersubscribersegmentsatellite_radio_system | Mar. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 2 | |
Number of satellite radio systems | satellite_radio_system | 2 | |
Revenue | $ 1,744,000,000 | $ 1,375,000,000 |
Sirius XM | ||
Segment Reporting Information [Line Items] | ||
Number of subscribers | subscriber | 34.2 | |
Revenue | $ 1,493,000,000 | |
Pandora | ||
Segment Reporting Information [Line Items] | ||
Number of subscribers | subscriber | 6.9 | |
Number of ad-supported active users | active_user | 66 | |
Revenue | $ 251,000,000 | |
Sirius XM Canada | Equity Method Investee | ||
Segment Reporting Information [Line Items] | ||
Equity method investment, equity interest percentage | 70.00% | |
Equity method investment, voting interest percentage | 33.00% | |
Advertising revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 209,000,000 | $ 42,000,000 |
Advertising revenue | Sirius XM | ||
Segment Reporting Information [Line Items] | ||
Revenue | 46,000,000 | |
Advertising revenue | Pandora | ||
Segment Reporting Information [Line Items] | ||
Revenue | 163,000,000 | |
Advertising revenue | Intersegment Eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 0 |
Segments and Geographic Infor_4
Segments and Geographic Information - Revenue and Profit by Segment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 1,744,000,000 | $ 1,375,000,000 |
Cost of services | (739,000,000) | |
Segment gross profit | 1,005,000,000 | |
Sirius XM | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,493,000,000 | |
Cost of services | (569,000,000) | |
Segment gross profit | 924,000,000 | |
Pandora | ||
Segment Reporting Information [Line Items] | ||
Revenue | 251,000,000 | |
Cost of services | (170,000,000) | |
Segment gross profit | 81,000,000 | |
Subscriber revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,458,000,000 | 1,258,000,000 |
Subscriber revenue | Sirius XM | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,370,000,000 | |
Subscriber revenue | Pandora | ||
Segment Reporting Information [Line Items] | ||
Revenue | 88,000,000 | |
Advertising revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 209,000,000 | 42,000,000 |
Advertising revenue | Sirius XM | ||
Segment Reporting Information [Line Items] | ||
Revenue | 46,000,000 | |
Advertising revenue | Pandora | ||
Segment Reporting Information [Line Items] | ||
Revenue | 163,000,000 | |
Advertising revenue | Elimination | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | |
Equipment Revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 41,000,000 | 35,000,000 |
Cost of services | (6,000,000) | (7,000,000) |
Equipment Revenue | Sirius XM | ||
Segment Reporting Information [Line Items] | ||
Revenue | 41,000,000 | |
Equipment Revenue | Pandora | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | |
Other revenue | ||
Segment Reporting Information [Line Items] | ||
Revenue | 36,000,000 | $ 40,000,000 |
Other revenue | Sirius XM | ||
Segment Reporting Information [Line Items] | ||
Revenue | 36,000,000 | |
Other revenue | Pandora | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 0 |
Segments and Geographic Infor_5
Segments and Geographic Information - Gross Profit to Consolidated Income Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment gross profit | $ 1,005 | |
Subscriber acquisition costs | (108) | $ (123) |
Sales and marketing (a) | (183) | (107) |
Engineering, design and development | (54) | (31) |
General and administrative (a) | (135) | (85) |
Depreciation and amortization | (107) | (72) |
Share-based payment expense | (70) | (34) |
Acquisition and other related costs | (76) | 0 |
Income before income taxes | 243 | $ 369 |
Segment Reconciling Items | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Subscriber acquisition costs | (108) | |
Sales and marketing (a) | (168) | |
Engineering, design and development | (45) | |
General and administrative (a) | (119) | |
Depreciation and amortization | (107) | |
Share-based payment expense | (49) | |
Acquisition and other related costs | (76) | |
Total other expense | (90) | |
Cost of Sales | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Share-based payment expense | (9) | |
Sales and Marketing | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Share-based payment expense | (15) | |
Research and Development Expense | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Share-based payment expense | (9) | |
General and Administrative Expense | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Share-based payment expense | $ (16) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Income tax expense | $ 81 | $ 80 | ||
Effective income tax rate percent | 33.30% | 21.70% | ||
Valuation allowance | $ 88 | $ 66 | ||
Forecast | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Effective income tax rate percent | 24.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Apr. 23, 2019 | Jan. 29, 2019 | Apr. 22, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Subsequent Event [Line Items] | |||||
Aggregate cost for shares repurchased | $ 576 | $ 309 | |||
Dividends declared per common share (in dollars per share) | $ 0.0121 | $ 0.0121 | $ 0.0110 | ||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Aggregate cost for shares repurchased | $ 224 | ||||
Dividends declared per common share (in dollars per share) | $ 0.0121 | ||||
Subsequent Event | Common Stock | |||||
Subsequent Event [Line Items] | |||||
Number of shares repurchased (in shares) | 38 |
Uncategorized Items - siri-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 18,000,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 14,000,000 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 4,000,000 |