Investor Relations

SiriusXM Reports Second Quarter 2014 Results

NEW YORK, July 29, 2014 /PRNewswire/ --

  • Revenue Exceeds $1.0 Billion, Up 10% From Second Quarter of 2013
  • Net Income of $120 Million
  • Adjusted EBITDA Grows 31% to a Record $370 Million
  • Free Cash Flow Increases 42% to a Record $335 Million
  • Share Repurchases Exceed $1.6 Billion in 2014
  • 2014 Financial Guidance Raised

SiriusXM announced second quarter 2014 financial and operating results, including revenue of $1.035 billion, up 10% from the second quarter 2013.  Net income was $120 million, or $0.02 per diluted share, in the second quarter of 2014.

SIRIUS XM logo.

Adjusted net income climbed 60% to $131 million in the second quarter of 2014 from $82 million in the second quarter of 2013.  Adjusted EBITDA for the second quarter of 2014 reached a record $370 million, up 31% from $283 million in the second quarter of 2013.

"SiriusXM once again posted outstanding results in the second quarter by adding 475,000 total net new subscribers, including 380,000 net new self-pay subscribers.  We set new records for trial conversions to self-pay, adjusted EBITDA and adjusted EBITDA margin in the quarter, and we are raising our 2014 guidance for revenue, adjusted EBITDA, and free cash flow," stated Jim Meyer, Chief Executive Officer, SiriusXM.

"Our extraordinary operating performance supported the buyback of over 350 million shares in the quarter, or approximately 6% of our outstanding stock.  Perhaps more importantly, we improved our superior content by adding even more channels and shows created with major brands and personalities, such as Joel Osteen, NBC's TODAY Show, and YouTube, and we expanded the range and depth of our commercial-free music programming with the introduction of three new channels in the categories of country, women's pop, and dance," added Meyer. "As the leader in audio entertainment, we never rest in searching for new content that our subscribers will love."

Additional financial and operating highlights of the second quarter include:

  • Subscribers Exceed 26.3 Million.  Net subscriber additions in the second quarter of 2014 were 475,472.  The total paid subscriber base reached a record 26.3 million, up 5% from a year earlier.  Self-pay net subscriber additions were 379,711, and the self-pay subscriber base reached a record high of 21.6 million, up 7% from the second quarter of 2013. Paid and unpaid trials combined to produce a total trial funnel of 7.3 million at the end of the second quarter of 2014, the largest in our history.
  • Adjusted EBITDA and Adjusted EBITDA Margin Highest Ever.  Adjusted EBITDA climbed 31% from the second quarter of 2013 to a record quarterly amount of $370 million.  The Company's adjusted EBITDA margin reached a record 35.7% in the second quarter of 2014, up approximately 570 basis points from the second quarter of 2013.
  • Free Cash Flow Per Share Climbs 47%.  Free cash flow in the second quarter of 2014 was $335 million, up 42% from $237 million in the second quarter of 2013.  Free cash flow per diluted share was 5.4 cents in the second quarter of 2014, up 47% from 3.7 cents in the second quarter of 2013. 

"Since we launched our capital return program in late 2012, we have returned approximately $3.75 billion to stockholders in less than two years," noted David Frear, Chief Financial Officer, SiriusXM.

"On July 15th, our Board of Directors increased our cumulative share repurchase authorization to $6 billion.  Total debt-to-adjusted EBITDA at the end of the second quarter 2014 was 3.5 times, and our $1.25 billion revolving credit was undrawn, leaving us ample liquidity to return capital to shareholders and pursue strategic opportunities as they arise," added Frear.

2014 GUIDANCE

SiriusXM reaffirmed its previously issued 2014 guidance for net subscriber additions and increased its guidance for revenue, adjusted EBITDA, and free cash flow:

  • Net subscriber additions of approximately 1.25 million,
  • Revenue of approximately $4.1 billion,
  • Adjusted EBITDA of approximately $1.425 billion, and
  • Free cash flow of approximately $1.1 billion.

SECOND QUARTER 2014 RESULTS

 

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)










For the Three Months Ended June 30,


For the Six Months Ended June 30,

(in thousands, except per share data)

2014


2013


2014


2013

Revenue:








Subscriber revenue

$             878,160


$             814,718


$          1,729,596


$          1,598,060

Advertising revenue

25,498


21,757


47,712


41,968

Equipment revenue

27,616


18,443


51,594


36,599

Other revenue

104,071


85,192


204,154


160,881

Total revenue

1,035,345


940,110


2,033,056


1,837,508

Operating expenses:








Cost of services:








Revenue share and royalties

200,221


155,859


395,632


304,390

Programming and content

69,570


70,381


144,440


144,991

Customer service and billing

90,092


80,290


181,161


160,684

Satellite and transmission

21,272


19,493


42,651


39,188

Cost of equipment

12,030


5,442


19,834


12,469

Subscriber acquisition costs

124,407


129,992


247,429


246,103

Sales and marketing

77,759


68,058


154,086


133,956

Engineering, design and development

15,630


15,052


31,541


29,894

General and administrative

72,582


60,392


148,825


116,732

Depreciation and amortization

67,204


67,415


135,471


134,433

Total operating expenses

750,767


672,374


1,501,070


1,322,840

Income from operations

284,578


267,736


531,986


514,668

Other income (expense):








Interest expense, net of amounts capitalized

(67,521)


(49,728)


(121,613)


(95,902)

Loss on extinguishment of debt and credit facilities, net

-


(16,377)


-


(16,377)

Interest and investment (loss) income 

(1,066)


294


3,283


1,932

Loss on change in value of derivatives

(7,463)


-


(34,485)


-

Other (loss) income 

(1,745)


256


(1,652)


502

Total other expense

(77,795)


(65,555)


(154,467)


(109,845)

Income before income taxes

206,783


202,181


377,519


404,823

Income tax expense

(86,822)


(76,659)


(163,570)


(155,699)

Net income

$             119,961


$             125,522


$             213,949


$             249,124

Foreign currency translation adjustment, net of tax

(40)


(109)


78


(281)

Total comprehensive income

$             119,921


$             125,413


$             214,027


$             248,843

Net income per common share:








Basic

$                   0.02


$                   0.02


$                   0.04


$                   0.04

Diluted

$                   0.02


$                   0.02


$                   0.04


$                   0.04

Weighted average common shares outstanding:








Basic

5,865,032


6,354,755


5,979,273


6,307,541

Diluted

6,210,078


6,447,517


6,054,771


6,526,698









 







SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS



As of June 30,


As of December 31,



2014


2013


(in thousands, except share and per share data)

(Unaudited)




ASSETS





Current assets:





Cash and cash equivalents

$                       169,980


$                       134,805


Accounts receivable, net

109,117


103,937


Receivables from distributors

93,159


88,975


Inventory, net

21,555


13,863


Prepaid expenses

110,994


110,530


Related party current assets

4,937


9,145


Deferred tax asset

846,612


937,598


Other current assets

13,764


20,160


Total current assets

1,370,118


1,419,013


Property and equipment, net

1,549,881


1,594,574


Long-term restricted investments

5,718


5,718


Deferred financing fees, net

13,334


12,604


Intangible assets, net

2,672,118


2,700,062


Goodwill

2,203,409


2,204,553


Related party long-term assets

108


30,164


Long-term deferred tax asset

801,079


868,057


Other long-term assets

8,769


10,035


Total assets

$                    8,624,534


$                    8,844,780


LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts payable and accrued expenses

$                       560,591


$                       578,333


Accrued interest

55,028


42,085


Current portion of deferred revenue

1,635,901


1,586,611


Current portion of deferred credit on executory contracts

3,285


3,781


Current maturities of long-term debt

497,884


496,815


Current maturities of long-term related party debt

10,981


10,959


Related party current liabilities

4,961


20,320


Total current liabilities

2,768,631


2,738,904


Deferred revenue

144,717


149,026


Deferred credit on executory contracts

-


1,394


Long-term debt

4,115,429


3,093,821


Related party long-term liabilities

15,055


16,337


Other long-term liabilities

94,813


99,556


Total liabilities

7,138,645


6,099,038


Stockholders' equity:





Preferred stock, undesignated, par value $0.001 (liquidation preference of $0.001 per share); 50,000,000 shares authorized and 0 shares issued and outstanding at June 30, 2014 and December 31, 2013

-


-


Common stock, par value $0.001; 9,000,000,000 shares authorized; 5,712,347,567 and 6,096,220,526 shares issued; 5,706,347,567 and 6,096,220,526 outstanding at June 30, 2014 and December 31, 2013, respectively

5,712


6,096


Accumulated other comprehensive loss, net of tax

(230)


(308)


Additional paid-in capital

7,221,372


8,674,129


Treasury stock, at cost; 6,000,000 and 0 shares of common stock at June 30, 2014 and December 31, 2013, respectively

(20,739)


-


Accumulated deficit

(5,720,226)


(5,934,175)


Total stockholders' equity

1,485,889


2,745,742


Total liabilities and stockholders' equity

$                    8,6