Sirius XM Radio Inc. released their financial and operating results today showing that 3Q09 total revenue grew 3 percent from the third quarter last year, while total subscribers decreased by 2 percent year over year.
Last year's quarter was the first that both Sirius Satellite Radio and XM Satellite Radio posted results as a combined company.
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Sirius XM also announced a 19 percent decrease in pro forma total cash operating expenses compared to the same quarter last year.
Monthly average revenue per subscriber (ARPU) was $10.87 in
the third quarter 2009, up 3% from $10.51 in the third quarter 2008.
Subscriber acquisition costs decreased 17 percent, or $23 million, and SAC per gross addition declined by 7 percent to $69 from $74 in the year ago period.
Sirius XM ended the third quarter 2009 with 18,515,730 total subscribers - a decrease of 2 percent from last year but an increase of 102,295 from the 2Q09 subscribers. Self-pay subscribers were 15,456,748, up 266,160 from last year.
The self-pay monthly customer churn rate was 2.0% in the third quarter, in-line with Q2, and up from a pro forma 1.7% churn rate in the 3Q08. Ending promotional subscribers were 3,058,982 in the third quarter 2009.
Check out the full financials below...
Unaudited
------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
(Actual) (Pro Forma) (Actual) (Pro Forma)
Beginning subscribers 18,413,435 18,576,830 19,003,856 17,348,622
Gross subscriber
additions 1,606,446 1,843,785 4,325,532 5,997,096
Deactivated
subscribers (1,504,151) (1,499,704) (4,813,658) (4,424,807)
---------- ---------- ---------- ----------
Net additions 102,295 344,081 (488,126) 1,572,289
------- ------- -------- ---------
Ending subscribers 18,515,730 18,920,911 18,515,730 18,920,911
========== ========== ========== ==========
Retail 7,925,904 9,036,420 7,925,904 9,036,420
OEM 10,488,530 9,777,704 10,488,530 9,777,704
Rental 101,296 106,787 101,296 106,787
------- ------- ------- -------
Ending subscribers 18,515,730 18,920,911 18,515,730 18,920,911
========== ========== ========== ==========
Retail (309,972) (149,417) (979,298) (202,295)
OEM 407,131 492,216 492,692 1,744,436
Rental 5,136 1,282 (1,520) 30,148
----- ----- ------ ------
Net additions 102,295 344,081 (488,126) 1,572,289
======= ======= ======== =========
Self-pay 15,456,748 15,190,588 15,456,748 15,190,588
Paid promotional 3,058,982 3,730,323 3,058,982 3,730,323
--------- --------- --------- ---------
Ending subscribers 18,515,730 18,920,911 18,515,730 18,920,911
========== ========== ========== ==========
Self-pay 35,405 361,438 (92,838) 1,317,242
Paid promotional 66,890 (17,357) (395,288) 255,047
------ ------- -------- -------
Net additions 102,295 344,081 (488,126) 1,572,289
======= ======= ======== =========
Daily weighted average
number of subscribers 18,393,678 18,710,940 18,514,041 18,187,927
========== ========== ========== ==========
Unaudited Pro Forma
-----------------------------------------
Three Months Ended Nine Months Ended
(in thousands, except September 30, September 30,
for per subscriber --------------- ----------------
amounts) 2009 2008 2009 2008
---- ---- ---- ----
Average self-pay monthly
churn (1)(7) 2.0% 1.7% 2.1% 1.7%
Conversion rate (2)(7) 46.8% 47.0% 45.3% 49.2%
ARPU (3)(7) $10.87 $10.51 $10.67 $10.53
SAC, as adjusted,
per gross subscriber
addition (4)(7) $69 $74 $63 $76
Customer service and
billing expenses, as
adjusted, per average
subscriber (5)(7) $1.01 $1.05 $1.04 $1.08
Total revenue $629,607 $612,776 $1,842,924 $1,792,632
Free cash flow (6)(7) $26,724 $(97,594) $35,772 $(577,648)
Adjusted income (loss)
from operations (8) $106,140 $(36,851) $347,198 $(168,096)
Net loss $(181,935) $(217,010) $(416,090) $(653,867)
Unaudited Pro Forma
------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
--------------- ----------------
(in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Subscriber revenue,
including effects
of rebates $587,442 $572,355 $1,740,477 $1,669,700
Advertising revenue,
net of agency fees 12,418 17,867 37,287 54,156
Equipment revenue 10,506 12,856 31,343 38,687
Other revenue 19,241 9,698 33,817 30,089
------ ----- ------ ------
Total revenue 629,607 612,776 1,842,924 1,792,632
Operating expenses:
Satellite and
transmission 18,676 25,136 57,077 76,336
Programming
and content 93,230 131,630 277,614 341,422
Revenue share
and royalties 123,531 120,800 362,463 355,251
Customer service
and billing 55,795 58,857 173,517 177,159
Cost of equipment 11,944 16,179 27,988 48,020
Sales and marketing 52,827 78,178 152,039 260,583
Subscriber
acquisition costs 109,384 132,477 274,082 444,396
General and
administrative 48,481 75,981 142,812 215,440
Engineering, design
and development 9,599 10,389 28,134 42,121
Depreciation and
amortization 47,997 64,111 145,596 196,051
Share-based
payment expense 18,799 29,809 71,301 99,673
Restructuring,
impairments and
related costs 2,554 7,430 30,167 7,457
----- ----- ------ -----
Total operating expenses 592,817 750,977 1,742,790 2,263,909
------- ------- --------- ---------
Income (loss) from
operations 36,790 (138,201) 100,134 (471,277)
Other expense (217,610) (77,086) (512,880) (178,777)
-------- ------- -------- --------
Loss before income taxes (180,820) (215,287) (412,746) (650,054)
Income tax expense (1,115) (1,723) (3,344) (3,813)
------ ------ ------ ------
Net loss $(181,935) $(217,010) $(416,090) $(653,867)
========= ========= ========= =========
Unaudited Actual
-------------------------------------------
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
(in thousands, except ----------------- -----------------
per share data) 2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Subscriber revenue,
including effects of
rebates $578,304 $458,237 $1,699,455 $980,396
Advertising revenue,
net of agency fees 12,418 14,674 37,287 31,413
Equipment revenue 10,506 11,271 31,343 25,290
Other revenue 17,428 4,261 28,379 4,710
------ ----- ------ -----
Total revenue 618,656 488,443 1,796,464 1,041,809
Operating expenses
(depreciation and
amortization shown
separately below) (1):
Cost of services:
Satellite and
transmission 19,542 19,526 59,435 34,800
Programming
and content 78,315 106,037 230,825 222,975
Revenue share
and royalties 100,558 85,592 296,855 177,635
Customer service
and billing 56,529 47,432 175,570 97,218
Cost of equipment 11,944 13,773 27,988 28,007
Sales and marketing 52,530 63,637 152,647 151,237
Subscriber acquisition
costs 90,054 86,616 230,773 257,832
General and
administrative 56,923 57,310 182,953 148,555
Engineering, design
and development 11,252 10,434 32,975 28,091
Impairment of goodwill - 4,750,859 - 4,750,859
Depreciation and
amortization 72,100 66,774 231,624 120,793
Restructuring,
impairments and
related costs 2,554 7,430 30,167 7,457
----- ----- ------ -----
Total operating expenses 552,301 5,315,420 1,651,812 6,025,459
------- --------- --------- ---------
Income (loss) from
operations 66,355 (4,826,977) 144,652 (4,983,650)
Other income (expense):
Interest and
investment income 962 4,940 2,602 9,167
Interest expense, net
of amounts
capitalized (78,527) (49,216) (240,062) (83,636)
Loss on extinguishment
of debt and credit
facilities, net (138,053) - (263,767) -
(Loss) gain on
investments (58) (3,089) 457 (3,089)
Other income (expense) 1,246 (3,870) 2,505 (3,935)
----- ------ ----- ------
Total other expense (214,430) (51,235) (498,265) (81,493)
-------- ------- -------- -------
Loss before
income taxes (148,075) (4,878,212) (353,613) (5,065,143)
Income tax expense (1,115) (1,215) (3,344) (2,301)
-------- ---------- -------- ----------
Net loss (149,190) (4,879,427) (356,957) (5,067,444)
Preferred stock
beneficial conversion
feature - - (186,188) -
--- --- -------- ---
Net loss
attributable
to common
stockholders $(149,190) $(4,879,427) $(543,145) $(5,067,444)
========= =========== ========= ===========
Net loss per common share
(basic and diluted) $(0.04) $(1.93) $(0.15) $(2.76)
====== ====== ====== ======
Weighted average common
shares outstanding
(basic and diluted) 3,621,062 2,527,692 3,577,587 1,836,834
========= ========= ========= =========
-------------------------
(1) Amounts related to share-based payment expense included in operating
expenses were as follows:
Satellite and transmission $1,086 $1,331 $3,020 $2,887
Programming and content 3,037 3,529 7,418 7,477
Customer service and
billing 734 596 2,052 1,137
Sales and marketing 2,722 3,672 10,081 11,376
Subscriber acquisition
costs - - - 14
General and administrative 8,442 12,904 40,141 36,359
Engineering, design and
development 1,653 1,973 4,841 4,167
----- ----- ----- -----
Total share-based payment
expense $17,674 $24,005 $67,553 $63,417
======= ======= ======= =======
September December
30, 2009 31, 2008
(in thousands, except share and -------- ---------
per share data) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $380,372 $380,446
Accounts receivable, net of allowance for
doubtful accounts of $9,872 and $10,860,
respectively 87,148 102,024
Receivables from distributors 41,755 45,950
Inventory, net 20,996 24,462
Prepaid expenses 107,350 67,203
Related party current assets 109,172 114,177
Other current assets 64,317 58,744
------ ------
Total current assets 811,110 793,006
Property and equipment, net 1,694,235 1,703,476
FCC licenses 2,083,654 2,083,654
Restricted investments 3,400 141,250
Deferred financing fees, net 35,889 40,156
Intangible assets, net 629,288 688,671
Goodwill 1,834,856 1,834,856
Related party long-term assets 114,073 124,607
Other long-term assets 62,438 81,019
------ ------
Total assets $7,268,943 $7,490,695
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $521,621 $642,820
Accrued interest 65,537 76,463
Current portion of deferred revenue 987,177 985,180
Current portion of deferred credit
on executory contracts 247,566 234,774
Current maturities of long-term debt 103,674 399,726
Related party current liabilities 90,869 68,373
------ ------
Total current liabilities 2,016,444 2,407,336
Deferred revenue 285,488 247,889
Deferred credit on executory contracts 851,955 1,037,190
Long-term debt 2,874,391 2,851,740
Long-term related party debt 265,659 -
Deferred tax liability 906,428 894,453
Related party long-term liabilities 21,928 -
Other long-term liabilities 39,005 43,550
------ ------
Total liabilities 7,261,298 7,482,158
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001;
50,000,000 authorized at September 30,
2009 and December 31, 2008:
Series A convertible preferred stock
(liquidation preference of $51,370
at September 30, 2009 and December
31, 2008); 24,808,959 shares issued
and outstanding at September 30, 2009
and December 31, 2008 25 25
Convertible perpetual preferred stock,
series B (liquidation preference of
$13 and $0 at September 30, 2009 and
December 31, 2008, respectively);
12,500,000 and zero shares issued
and outstanding at September 30, 2009
and December 31, 2008, respectively 13 -
Convertible preferred stock, series C
junior; no shares issued and outstanding
at September 30, 2009 and
December 31, 2008 - -
Common stock, par value $0.001; 9,000,000,000
and 8,000,000,000 shares authorized at
September 30, 2009 and December 31, 2008,
respectively; 3,858,186,839 and
3,651,765,837 shares issued and
outstanding at September 30, 2009 and
December 31, 2008, respectively 3,858 3,652
Accumulated other comprehensive
loss, net of tax (6,598) (7,871)
Additional paid-in capital 10,265,752 9,724,991
Accumulated deficit (10,255,405) (9,712,260)
----------- ----------
Total stockholders' equity 7,645 8,537
----- -----
Total liabilities and
stockholders' equity $7,268,943 $7,490,695
========== ==========
Unaudited For the Nine Months
Ended September 30,
-------------------
(in thousands) 2009 2008
---- ----
Cash flows from operating activities:
Net loss $(356,957) $(5,067,444)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation and amortization 231,624 114,923
Impairment of goodwill - 4,750,859
Non-cash interest expense,
net of amortization of premium 32,909 (1,933)
Provision for doubtful accounts 23,879 11,125
Amortization of deferred income
related to equity method investment (2,082) (471)
Loss on extinguishment of
debt and credit facilities, net 263,767 -
Restructuring, impairments and
related costs 26,954 -
Loss on disposal of assets - 4,879
Loss on investments 10,967 3,089
Share-based payment expense 67,553 63,417
Deferred income taxes 3,344 2,301
Other non-cash purchase
price adjustments (142,487) (23,770)
Other - 1,643
Changes in operating assets
and liabilities:
Accounts receivable (9,002) 1,575
Inventory 3,466 2,952
Receivables from distributors 4,195 9,595
Related party assets 15,539 (1,357)
Prepaid expenses and other
current assets 30,188 3,528
Other long-term assets 64,034 37,110
Accounts payable and accrued expenses (68,135) (122,969)
Accrued interest (6,600) (2,810)
Deferred revenue 11,569 (4,577)
Related party liabilities 44,424 3,315
Other long-term liabilities 3,958 (1,972)
----- ------
Net cash provided by (used in)
operating activities 253,107 (216,992)
------- --------
Cash flows from investing activities:
Additions to property and equipment (217,335) (102,705)
Sales of property and equipment - 105
Purchases of restricted and
other investments - (3,000)
Acquisition of acquired entity cash - 819,521
Merger related costs - (13,047)
Sale of restricted and other investments - 65,642
--- ------
Net cash (used in) provided by
investing activities (217,335) 766,516
-------- -------
Cash flows from financing activities:
Proceeds from exercise of warrants
and stock options - 471
Preferred stock issuance costs, net (3,712) -
Long-term borrowings, net 579,936 533,941
Related party long-term borrowings, net 364,964 -
Short-term financings 2,220 -
Payment of premiums on redemption of debt (17,075) (18,693)
Payments to minority interest holder - (61,880)
Repayment of long-term borrowings (610,932) (1,082,428)
Repayment of related party long-term
borrowings (351,247) -
Other - (98)
--- ---
Net cash used in
financing activities (35,846) (628,687)
------- --------
Net decrease in cash and cash equivalents (74) (79,163)
Cash and cash equivalents at beginning of period 380,446 438,820
------- -------
Cash and cash equivalents at end of period $380,372 $359,657
======== ========
FOOTNOTES TO PRESS RELEASE AND TABLES FOR NON-GAAP FINANCIAL MEASURES
(1) Average self-pay monthly churn represents the monthly average of
self-pay deactivations by the quarter divided by the average self-pay
subscriber balance for the quarter.
(2) We measure the percentage of subscribers that receive our service and
convert to self-paying after the initial promotion period. We refer
to this as the "conversion rate." At the time of sale, vehicle owners
generally receive between three and twelve month prepaid trial
subscriptions and we receive a subscription fee from the OEM.
Promotional periods generally include the period of trial service
plus 30 days to handle the receipt and processing of payments. We
measure conversion rate three months after the period in which the
trial service ends. Based on our experience it may take up to 90 days
after the trial service ends for subscribers to respond to our
marketing communications and become self-paying subscribers.
(3) ARPU is derived from total earned subscriber revenue and net
advertising revenue, divided by the number of months in the period,
divided by the daily weighted average number of subscribers for the
period. ARPU is calculated as follows (in thousands, except for per
subscriber amounts):
Unaudited Pro Forma
----------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
--------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Subscriber revenue $587,442 $572,355 $1,740,477 $1,669,700
Net advertising revenue 12,418 17,867 37,287 54,156
------ ------ ------ ------
Total subscriber and net
advertising revenue $599,860 $590,222 $1,777,764 $1,723,856
======== ======== ========== ==========
Daily weighted average
number of subscribers 18,393,678 18,710,940 18,514,041 18,187,927
ARPU $10.87 $10.51 $10.67 $10.53
(4) SAC, as adjusted, per gross subscriber addition is derived from
subscriber acquisition costs and margins from the direct sale of
radios and accessories, excluding share-based payment expense divided
by the number of gross subscriber additions for the period. SAC, as
adjusted, per gross subscriber addition is calculated as follows (in
thousands, except for per subscriber amounts):
Unaudited Pro Forma
--------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
--------------- ---------------
2009 2008 2009 2008
---- ---- ---- ----
Subscriber acquisition cost $109,384 $132,477 $274,082 $444,410
Less: share-based payment
expense granted to third
parties and employees - - - (14)
Less/Add: margin from direct
sales of radios and
accessories 1,438 3,323 (3,355) 9,333
----- ----- ------ -----
SAC, as adjusted $110,822 $135,800 $270,727 $453,729
======== ======== ======== ========
Gross subscriber additions 1,606,446 1,843,785 4,325,532 5,997,096
SAC, as adjusted, per gross
subscriber addition $69 $74 $63 $76
(5) Customer service and billing expenses, as adjusted, per average
subscriber is derived from total customer service and billing
expenses, excluding share-based payment expense, divided by the
number of months in the period, divided by the daily weighted average
number of subscribers for the period. Customer service and billing
expenses, as adjusted, per average subscriber is calculated as
follows (in thousands, except for per subscriber amounts):
Unaudited Pro Forma
------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Customer service and
billing expenses $56,644 $59,786 $175,928 $180,270
Less: share-based
payment expense (849) (929) (2,411) (3,111)
---- ---- ------ ------
Customer service and
billing expenses, as
adjusted $55,795 $58,857 $173,517 $177,159
======= ======= ======== ========
Daily weighted
average number of
subscribers 18,393,678 18,710,940 18,514,041 18,187,927
Customer service and
billing expenses, as
adjusted, per average
subscriber $1.01 $1.05 $1.04 $1.08
(6) Free cash flow is calculated as follows:
Unaudited Pro Forma
--------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
--------------- ---------------
(in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Net cash provided by
(used in) operating
activities $116,248 $(101,983) $253,107 $(468,078)
Additions to property and
equipment (89,524) (32,403) (217,335) (133,548)
Merger related costs - 1,796 - (13,047)
Restricted and other
investment activity - 34,996 - 37,025
--- ------ --- ------
Free cash flow $26,724 $(97,594) $35,772 $(577,648)
======= ======== ======= =========
(7) Average self-pay monthly churn; conversion rate; ARPU; SAC, as
adjusted, per gross subscriber addition; customer service and billing
expenses, as adjusted, per average subscriber; and free cash flow are
not measures of financial performance under U.S. generally accepted
accounting principles ("GAAP"). We believe these non-GAAP financial
measures provide meaningful supplemental information regarding our
operating performance and are used by us for budgetary and planning
purposes; when publicly providing our business outlook; as a means to
evaluate period-to-period comparisons; and to compare our performance
to that of our competitors. We also believe that investors also use
our current and projected metrics to monitor the performance of our
business and to make investment decisions.
We believe the exclusion of share-based payment expense in our
calculations of SAC, as adjusted, per gross subscriber addition and
customer service and billing expenses, as adjusted, per average
subscriber is useful given the significant variation in expense that
can result from changes in the fair market value of our common stock,
the effect of which is unrelated to the operational conditions that
give rise to variations in the components of our subscriber
acquisition costs and customer service and billing expenses.
Specifically, the exclusion of share-based payment expense in our
calculation of SAC, as adjusted, per gross subscriber addition is
critical in being able to understand the economic impact of the
direct costs incurred to acquire a subscriber and the effect over
time as economies of scale are reached.
These non-GAAP financial measures are used in addition to and in
conjunction with results presented in accordance with GAAP. These
non-GAAP financial measures may be susceptible to varying
calculations; may not be comparable to other similarly titled
measures of other companies; and should not be considered in
isolation, as a substitute for, or superior to measures of financial
performance prepared in accordance with GAAP.
(8) We refer to net loss before interest and investment income, interest
expense net of amounts capitalized, income tax expense, loss from
redemption of debt, loss on investments, other expense (income),
restructuring and related cost, depreciation and amortization, and
share related payment expense as adjusted income (loss) from
operations. Adjusted income (loss) from operations is not a measure
of financial performance under U.S. GAAP. We believe adjusted income
(loss) from operations is a useful measure of our operating
performance. We use adjusted income (loss) from operations for
budgetary and planning purposes; to assess the relative profitability
and on-going performance of our consolidated operations; to compare
our performance from period-to-period; and to compare our performance
to that of our competitors. We also believe adjusted income (loss)
from operations is useful to investors to compare our operating
performance to the performance of other communications, entertainment
and media companies. We believe that investors use current and
projected adjusted income (loss) from operations to estimate our
current or prospective enterprise value and to make investment
decisions.
Because we fund and build-out our satellite radio system through the
periodic raising and expenditure of large amounts of capital, our
results of operations reflect significant charges for interest and
depreciation expense. We believe adjusted income (loss) from
operations provides useful information about the operating
performance of our business apart from the costs associated with our
capital structure and physical plant. The exclusion of interest and
depreciation and amortization expense is useful given fluctuations in
interest rates and significant variation in depreciation and
amortization expense that can result from the amount and timing of
capital expenditures and potential variations in estimated useful
lives, all of which can vary widely across different industries or
among companies within the same industry. We believe the exclusion of
taxes is appropriate for comparability purposes as the tax positions
of companies can vary because of their differing abilities to take
advantage of tax benefits and because of the tax policies of the
various jurisdictions in which they operate. We believe the exclusion
of restructuring and related costs is useful given the non-recurring
nature of these transactions. We also believe the exclusion of share-
based payment expense is useful given the significant variation in
expense that can result from changes in the fair market value of our
common stock. To compensate for the exclusion of taxes, other income
(expense), depreciation and amortization and share-based payment
expense, we separately measure and budget for these items.
There are material limitations associated with the use of adjusted
income (loss) from operations in evaluating our company compared with
net loss, which reflects overall financial performance, including the
effects of taxes, other income (expense), depreciation and
amortization, restructuring and related costs, and share-based
payment expense. We use adjusted income (loss) from operations to
supplement GAAP results to provide a more complete understanding of
the factors and trends affecting the business than GAAP results
alone. Investors that wish to compare and evaluate our operating
results after giving effect for these costs, should refer to net loss
as disclosed in our unaudited condensed consolidated statements of
operations. Since adjusted income (loss) from operations is a non-
GAAP financial measure, our calculation of adjusted income (loss)
from operations may be susceptible to varying calculations; may not
be comparable to other similarly titled measures of other companies;
and should not be considered in isolation, as a substitute for, or
superior to measures of financial performance prepared in accordance
with GAAP.
The reconciliation of the pro forma unadjusted net loss to the pro
forma adjusted income (loss) from operations is calculated as follows
(see footnotes for reconciliation of the pro forma amounts to their
respective GAAP amounts):
Unaudited Pro Forma
--------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
--------------- ---------------
(in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Reconciliation of Net loss to
Adjusted income (loss) from
operations:
Net loss $(181,935) $(217,010) $(416,090) $(653,867)
Add back Net loss items
excluded from Adjusted
income (loss) from
operations:
Interest and investment
income (962) (5,534) (2,602) (12,180)
Interest expense, net
of amounts capitalized 81,707 70,153 254,677 164,380
Income tax expense 1,115 1,723 3,344 3,813
Loss on extinguishment
of debt and
facilities, net 138,053 - 263,767 -
Loss (gain) on investments 58 7,549 (457) 16,099
Other (income) expense (1,246) 4,918 (2,505) 10,478
------ ----- ------ ------
Income (loss)
from operations 36,790 (138,201) 100,134 (471,277)
Restructuring, impairments
and related costs 2,554 7,430 30,167 7,457
Depreciation and
amortization 47,997 64,111 145,596 196,051
Share-based payment expense 18,799 29,809 71,301 99,673
------ ------ ------ ------
Adjusted income (loss)
from operations $106,140 $(36,851) $347,198 $(168,096)
======== ======== ======== =========
There are material limitations associated with the use of a pro forma
unadjusted results of operations in evaluating our company compared
with our GAAP results of operations, which reflects overall financial
performance. We use pro forma unadjusted results of operations to
supplement GAAP results to provide a more complete understanding of
the factors and trends affecting the business than GAAP results
alone. Investors that wish to compare and evaluate our operating
results after giving effect for these costs, should refer to results
of operations as disclosed in our unaudited condensed consolidated
statements of operations. Since pro forma unadjusted results of
operations is a non-GAAP financial measure, our calculations may not
be comparable to other similarly titled measures of other companies;
and should not be considered in isolation, as a substitute for, or
superior to measures of financial performance prepared in accordance
with GAAP.
(9) The following tables reconcile our GAAP results of operations to our
non-GAAP pro forma unadjusted results of operations (in thousands):
Unaudited For the Three Months Ended
September 30, 2009
-----------------------------------------
Allocation
of
Purchase Share-
Price based
As Accounting Payment Pro
Reported Adjustments Expense Forma
-------- ----------- -------- -----
Revenue:
Subscriber revenue,
including effects of
rebates $578,304 $9,138 $- $587,442
Advertising revenue,
net of agency fees 12,418 - - 12,418
Equipment revenue 10,506 - - 10,506
Other revenue 17,428 1,813 - 19,241
------ ----- --- ------
Total revenue 618,656 10,951 - 629,607
Operating expenses
(excludes depreciation
and amortization shown
separately below) (1)
Cost of services:
Satellite and
transmission 19,542 331 (1,197) 18,676
Programming
and content 78,315 18,117 (3,202) 93,230
Revenue share
and royalties 100,558 22,973 - 123,531
Customer service and
billing 56,529 115 (849) 55,795
Cost of equipment 11,944 - - 11,944
Sales and marketing 52,530 3,155 (2,858) 52,827
Subscriber acquisition
costs 90,054 19,330 - 109,384
General and administrative 56,923 374 (8,816) 48,481
Engineering, design and
development 11,252 224 (1,877) 9,599
Depreciation and
amortization 72,100 (24,103) - 47,997
Share-based payment expense - - 18,799 18,799
Restructuring, impairments
and related costs 2,554 - - 2,554
----- --- --- -----
Total operating expenses 552,301 40,516 - 592,817
------- ------ --- -------
Income (loss) from
operations 66,355 (29,565) - 36,790
Other income (expense)
Interest and investment
income 962 - - 962
Interest expense, net
of amounts capitalized (78,527) (3,180) - (81,707)
Loss on extinguishment of
debt and facilities, net (138,053) - - (138,053)
Loss on investments (58) - - (58)
Other income 1,246 - - 1,246
----- --- --- -----
Total other expense (214,430) (3,180) - (217,610)
-------- ------ --- --------
Loss before income taxes (148,075) (32,745) - (180,820)
Income tax expense (1,115) - - (1,115)
------ --- --- ------
Net loss $(149,190) $(32,745) $- $(181,935)
========= ======== === =========
(1) Amounts related to share-based payment expense included in operating
expenses were as follows:
Satellite and transmission $1,086 $111 $- $1,197
Programming and content 3,037 165 - 3,202
Customer service and billing 734 115 - 849
Sales and marketing 2,722 136 - 2,858
Subscriber acquisition costs - - - -
General and administrative 8,442 374 - 8,816
Engineering, design and
development 1,653 224 - 1,877
----- --- --- -----
Total share-based payment
expense $17,674 $1,125 $- $18,799
======= ====== === =======
Unaudited For the Three Months Ended
September 30, 2008
------------------------------------------------
Purchase Allocation
Price of
Predecessor Accounting Share-
Financial Adjust- based
As Inform- ments Payment Pro
Reported ation (a) Expense Forma
-------- ----- ----- ------- -----
Revenue:
Subscriber revenue,
including effects
of rebates $458,237 $95,684 $18,434 $- $572,355
Advertising
revenue, net of
agency fees 14,674 3,193 - - 17,867
Equipment revenue 11,271 1,585 - - 12,856
Other revenue 4,261 4,242 1,195 - 9,698
----- ----- ----- --- -----
Total revenue 488,443 104,704 19,629 - 612,776
Operating expenses
(excludes depreciation
and amortization
shown separately
below) (1)
Cost of services:
Satellite and
transmission 19,526 6,644 638 (1,672) 25,136
Programming
and content 106,037 15,991 13,912 (4,310) 131,630
Revenue share
and royalties 85,592 24,198 11,010 - 120,800
Customer
service and
billing 47,432 12,249 105 (929) 58,857
Cost of
equipment 13,773 2,406 - - 16,179
Sales and marketing 63,637 17,268 2,081 (4,808) 78,178
Subscriber
acquisition costs 86,616 33,366 12,495 - 132,477
General and
administrative 57,310 33,209 777 (15,315) 75,981
Engineering,
design and
development 10,434 2,611 119 (2,775) 10,389
Impairment
of goodwill 4,750,859 - (4,750,859) - -
Depreciation and
amortization 66,774 10,828 (13,491) - 64,111
Restructuring,
impairments and
related costs 7,430 - - - 7,430
Share-based
payment expense - - - 29,809 29,809
--- --- --- ------ ------
Total operating
expenses 5,315,420 158,770 (4,723,213) - 750,977
--------- ------- ---------- --- -------
Loss from
operations (4,826,977) (54,066) 4,742,842 - (138,201)
Other income (expense)
Interest and
investment
income 4,940 594 - - 5,534
Interest expense,
net of amounts
capitalized (49,216) (14,130) (6,807) - (70,153)
Loss on
extinguishment of
debt and
facilities, net - - - - -
Loss on investments (3,089) (4,460) - - (7,549)
Other expense (3,870) (1,048) - - (4,918)
------ ------ --- --- ------
Total other expense (51,235) (19,044) (6,807) - (77,086)
------- ------- ------ --- -------
Loss before
income taxes (4,878,212) (73,110) 4,736,035 - (215,287)
Income tax
expense (1,215) (508) - - (1,723)
------ ---- --- --- ------
Net loss $(4,879,427) $(73,618) $4,736,035 $- $(217,010)
=========== ======== ========== === =========
(1) Amounts related to share-based payment expense included in operating
expenses were as follows:
Satellite and
transmission $1,331 $305 $36 $- $1,672
Programming and content 3,529 586 195 - 4,310
Customer service and
billing 596 228 105 - 929
Sales and marketing 3,672 770 366 - 4,808
Subscriber acquisition
costs - - - - -
General and
administrative 12,904 1,634 777 - 15,315
Engineering, design and
development 1,973 510 292 - 2,775
----- --- --- --- -----
Total share-based
payment expense $24,005 $4,033 $1,771 $- $29,809
======= ====== ====== === =======
------------------------------
(a) Includes impairment of goodwill.
Unaudited For the Nine Months Ended
September 30, 2009
----------------------------------------
Allocation
of
Purchase Share-
Price based
As Accounting Payment Pro
Reported Adjustments Expense Forma
-------- ----------- ------- -----
Revenue:
Subscriber revenue,
including effects of
rebates $1,699,455 $41,022 $- $1,740,477
Advertising revenue,
net of agency fees 37,287 - - 37,287
Equipment revenue 31,343 - - 31,343
Other revenue 28,379 5,438 - 33,817
------ ----- --- ------
Total revenue 1,796,464 46,460 - 1,842,924
Operating expenses (excludes
depreciation and
amortization shown
separately below) (1)
Cost of services:
Satellite and
transmission 59,435 1,013 (3,371) 57,077
Programming and
content 230,825 54,708 (7,919) 277,614
Revenue share and
royalties 296,855 65,608 - 362,463
Customer service and
billing 175,570 358 (2,411) 173,517
Cost of equipment 27,988 - - 27,988
Sales and marketing 152,647 9,986 (10,594) 152,039
Subscriber acquisition
costs 230,773 43,309 - 274,082
General and administrative 182,953 1,252 (41,393) 142,812
Engineering, design and
development 32,975 772 (5,613) 28,134
Depreciation and
amortization 231,624 (86,028) - 145,596
Share-based payment
expense - - 71,301 71,301
Restructuring, impairments
and related costs 30,167 - - 30,167
------ --- --- ------
Total operating expenses 1,651,812 90,978 - 1,742,790
--------- ------ --- ---------
Income (loss) from
operations 144,652 (44,518) - 100,134
Other income (expense)
Interest and
investment income 2,602 - - 2,602
Interest expense, net
of amounts capitalized (240,062) (14,615) - (254,677)
Loss on extinguishment of
debt and facilities, net (263,767) - - (263,767)
Gain on investments 457 - - 457
Other income 2,505 - - 2,505
----- --- --- -----
Total other expense (498,265) (14,615) - (512,880)
-------- ------- --- --------
Loss before income taxes (353,613) (59,133) - (412,746)
Income tax expense (3,344) - - (3,344)
------ --- --- ------
Net loss $(356,957) $(59,133) $- $(416,090)
========= ======== === =========
(1) Amounts related to share-based payment expense included in operating
expenses were as follows:
Satellite and transmission $3,020 $351 $- $3,371
Programming and content 7,418 501 - 7,919
Customer service and billing 2,052 359 - 2,411
Sales and marketing 10,081 513 - 10,594
Subscriber acquisition costs - - - -
General and administrative 40,141 1,252 - 41,393
Engineering, design and
development 4,841 772 - 5,613
----- --- --- -----
Total share-based
payment expense $67,553 $3,748 $- $71,301
======= ====== === =======
Unaudited For the Nine Months Ended
September 30, 2008
---------------------------------------------------
Purchase Allocation
Price of
Predecessor Accounting Share-
Financial Adjust- based
As Inform- ments Payment Pro
Reported ation (a) Expense Forma
-------- ----- ----- ------- -----
Revenue:
Subscriber
revenue,
including
effects of
rebates $980,396 $670,870 $18,434 $- $1,669,700
Advertising
revenue,
net of
agency fees 31,413 22,743 - - 54,156
Equipment revenue 25,290 13,397 - - 38,687
Other revenue 4,710 24,184 1,195 - 30,089
----- ------ ----- --- ------
Total revenue 1,041,809 731,194 19,629 - 1,792,632
Operating expenses
(excludes
depreciation and
amortization
shown separately
below) (1)
Cost of services:
Satellite and
transmission 34,800 46,566 638 (5,668) 76,336
Programming
and content 222,975 117,156 13,912 (12,621) 341,422
Revenue
share and
royalties 177,635 166,606 11,010 - 355,251
Customer
service and
billing 97,218 82,947 105 (3,111) 177,159
Cost of
equipment 28,007 20,013 - - 48,020
Sales and
marketing 151,237 126,054 2,081 (18,789) 260,583
Subscriber
acquisition
costs 257,832 174,083 12,495 (14) 444,396
General and
administrative 148,555 116,444 777 (50,336) 215,440
Engineering,
design and
development 28,091 23,045 119 (9,134) 42,121
Impairment
of goodwill 4,750,859 - (4,750,859) - -
Depreciation and
amortization 120,793 88,749 (13,491) - 196,051
Restructuring,
impairments and
related costs 7,457 - - - 7,457
Share-based
payment expense - - - 99,673 99,673
--- --- --- ------ ------
Total operating
expenses 6,025,459 961,663 (4,723,213) - 2,263,909
--------- ------- ---------- --- ---------
Loss from
operations (4,983,650) (230,469) 4,742,842 - (471,277)
Other income
(expense)
Interest and
investment
income 9,167 3,013 - - 12,180
Interest
expense, net
of amounts
capitalized (83,636) (73,937) (6,807) - (164,380)
Loss on
extinguishment
of debt and
facilities, net - - - - -
Loss on
investments (3,089) (13,010) - - (16,099)
Other expense (3,935) (6,543) - - (10,478)
------ ------ --- --- -------
Total other expense (81,493) (90,477) (6,807) - (178,777)
------- ------- ------ --- --------
Loss before
income taxes (5,065,143) (320,946) 4,736,035 - (650,054)
Income tax
expense (2,301) (1,512) - - (3,813)
------ ------ --- --- ------
Net loss $(5,067,444) $(322,458) $4,736,035 $- $(653,867)
=========== ========= ========== === =========
(1) Amounts related to share-based payment expense included in operating
expenses were as follows:
Satellite and
transmission $2,887 $2,745 $36 $- $5,668
Programming
and content 7,477 4,949 195 - 12,621
Customer service and
billing 1,137 1,869 105 - 3,111
Sales and marketing 11,376 7,047 366 - 18,789
Subscriber acquisition
costs 14 - - - 14
General and
administrative 36,359 13,200 777 - 50,336
Engineering, design
and development 4,167 4,675 292 - 9,134
----- ----- --- --- -----
Total share-based
payment expense $63,417 $34,485 $1,771 $- $99,673
======= ======= ====== === =======
------------------------------
(a) Includes impairment of goodwill.
(10) The following table reconciles our GAAP Net loss per common share
(basic and diluted) to our non-GAAP Net loss per common share (basic
and diluted) excluding the following charges: (a) preferred stock
beneficial conversion feature, (b) loss on extinguishment of debt and
credit facilities, net, and (c) loss on impairment of goodwill.
Unaudited
-----------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
(per share data includes ------------------ -----------------
basic and diluted) 2009 2008 2009 2008
---- ---- ---- ----
Net loss per common share $(0.04) $(1.93) $(0.15) $(2.76)
Less: Preferred stock
beneficial conversion feature - - (0.05) -
--- --- ----- ---
Net loss per common share
excluding preferred stock
beneficial conversion
feature (0.04) (1.93) (0.10) (2.76)
Less: Loss on extinguishment
of debt and credit
facilities, net (0.04) - (0.07) -
----- --- ----- ---
Net loss per common share
excluding loss on
extinguishment of debt
and credit facilities,
net and preferred stock
beneficial conversion
feature (0.00) (1.93) (0.03) (2.76)
Less: Impairment of goodwill - (1.88) - (2.59)
--- ----- --- -----
Net loss per common share,
excluding charges $(0.00) $(0.05) $(0.03) $(0.17)
====== ====== ====== ======
]]>
Bubba the Love Sponge presented two checks on Thursday totaling $24,000 to the families of two local law enforcement officers who died in the line of duty. 
Emeril Lagasse is joining the ranks of countless other celebrities on the satellite radio dial with a new radio show, Cooking with Emeril, which will launch on the week of November 30th.
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Here's the rules and restrictions for the Rock 'n Rewards discount:
Here's the rules and restrictions for the Sirius XM Getting Started discount:
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Your favorite holiday music on satellite radio is returning once again this year, including the fan-favorite Holly channel among others that will offer listeners the perfect soundtrack to any holiday party.