Document and Entity Information - USD ($) |
12 Months Ended | ||
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Dec. 31, 2018 |
Jan. 28, 2019 |
Jun. 30, 2018 |
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Document And Entity Information [Abstract] | |||
Entity Registrant Name | SIRIUS XM HOLDINGS INC. | ||
Entity Central Index Key | 0000908937 | ||
Trading Symbol | SIRI | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8,907,120,420 | ||
Entity Common Stock, Shares Outstanding | 4,345,777,230 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
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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) | 4,345,606,000 | 4,530,928,000 |
Common stock, shares outstanding (in shares) | 4,345,606,000 | 4,527,742,000 |
Treasury stock (in shares) | 0 | 3,186,000 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
12 Months Ended | ||||||
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Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Cash flows from operating activities: | |||||||
Net income | $ 1,175,893 | $ 647,908 | $ 745,933 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 300,720 | 298,602 | 268,979 | ||||
Non-cash interest expense, net of amortization of premium | 9,297 | 9,050 | 8,608 | ||||
Provision for doubtful accounts | 50,824 | 55,715 | 55,941 | ||||
Amortization of deferred income related to equity method investment | (2,776) | (2,776) | (2,772) | ||||
Loss on extinguishment of debt | 0 | 43,679 | 24,229 | ||||
Loss (gain) on unconsolidated entity investments, net | 10,479 | (4,561) | (12,529) | ||||
Gain on fair value instrument | (42,617) | (472) | 0 | ||||
Dividend received from unconsolidated entity investment | 2,128 | 3,606 | 7,160 | ||||
Loss on disposal of assets | 0 | 0 | (12,912) | ||||
Share-based payment expense | 133,175 | 124,069 | 108,604 | ||||
Deferred income taxes | 256,575 | 583,520 | 323,562 | ||||
Changes in operating assets and liabilities: | |||||||
Receivables | (42,083) | (73,777) | (44,188) | ||||
Inventory | (1,999) | 1,874 | 1,932 | ||||
Related party, net | 1,046 | (1,738) | (3,485) | ||||
Prepaid expenses and other current assets | (20,189) | 50,194 | 7,156 | ||||
Other long-term assets | 10,385 | 7,333 | 38,835 | ||||
Accounts payable and accrued expenses | (20,086) | 41,367 | 78,920 | ||||
Accrued interest | (9,224) | 22,795 | 22,978 | ||||
Deferred revenue | 70,002 | 41,894 | 79,404 | ||||
Other long-term liabilities | (1,132) | 7,307 | (2,942) | ||||
Net cash provided by operating activities | 1,880,418 | 1,855,589 | 1,719,237 | ||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (355,703) | (287,970) | (205,829) | ||||
Purchases of other investments | (7,605) | (7,847) | (4,295) | ||||
Acquisitions, net of cash acquired | (2,377) | (107,273) | 0 | ||||
Investments in related parties and other equity investees | (16,833) | (612,465) | 0 | ||||
Repayment from (loan to) related party | 3,242 | ||||||
Repayment from (loan to) related party | (130,794) | 0 | |||||
Net cash used in investing activities | (379,276) | (1,146,349) | (210,124) | ||||
Cash flows from financing activities: | |||||||
Proceeds from exercise of stock options | 7 | 774 | 348 | ||||
Taxes paid in lieu of shares issued for stock-based compensation | (119,625) | (92,619) | (42,824) | ||||
Revolving credit facility, net of deferred financing costs | 136,190 | (90,000) | 50,000 | ||||
Proceeds from long-term borrowings, net of costs | 0 | 2,473,071 | 987,143 | ||||
Principal payments of long-term borrowings | (15,998) | (1,512,578) | (660,985) | ||||
Payment of premiums on redemption of debt | 0 | (33,065) | (19,097) | ||||
Common stock repurchased and retired | (1,314,286) | (1,409,035) | (1,673,518) | ||||
Dividends paid | (201,434) | (190,242) | (48,079) | ||||
Net cash used in financing activities | (1,515,146) | (853,694) | (1,407,012) | ||||
Net decrease in cash, cash equivalents and restricted cash | (14,004) | (144,454) | 102,101 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 79,374 | [1] | 223,828 | [1] | 121,727 | ||
Cash, cash equivalents and restricted cash at end of period | [1] | 65,370 | 79,374 | 223,828 | |||
Cash paid during the period for: | |||||||
Interest, net of amounts capitalized | 344,906 | 310,492 | 292,556 | ||||
Income taxes paid | 6,072 | 28,045 | 20,639 | ||||
Non-cash investing and financing activities: | |||||||
Capital lease obligations incurred to acquire assets | 499 | 2,577 | 6,647 | ||||
Treasury stock not yet settled | 17,154 | 5,752 | 821 | ||||
Accumulated other comprehensive loss (income), net of tax | 28,613 | (18,546) | (363) | ||||
Issuance of common stock as part of recapitalization of Sirius XM Canada | $ 0 | $ 178,850 | $ 0 | ||||
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Statement of Cash Flows [Abstract] | |||||||||
Cash and cash equivalents | $ 54,431 | $ 69,022 | $ 213,939 | $ 111,838 | |||||
Restricted cash included in Prepaid expenses and other current assets | 150 | 244 | 0 | 0 | |||||
Restricted cash included in Other long-term assets | 10,789 | 10,108 | 9,889 | 9,889 | |||||
Cash, cash equivalents and restricted cash at end of period | $ 65,370 | [1] | $ 79,374 | [1] | $ 223,828 | [1] | $ 121,727 | ||
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Business & Basis of Presentation |
12 Months Ended |
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Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business & Basis of Presentation | Business & Basis of Presentation This Annual Report on Form 10-K presents information for Sirius XM Holdings Inc. (“Holdings”). The terms “Holdings,” “we,” “us,” “our,” and “our company” as used herein, and unless otherwise stated or indicated by context, refer to Sirius XM Holdings Inc. and its subsidiaries, and “Sirius XM” refers to our wholly-owned subsidiary Sirius XM Radio Inc. Holdings has no operations independent of its wholly-owned subsidiary, Sirius XM. Business We transmit music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through our two proprietary satellite radio systems. We also transmit a larger set of music and other channels and video programming through our streaming service. Our streaming service is available online and through applications for mobile devices, home devices and other consumer electronic equipment. We also provide connected vehicle services. Our connected vehicle services are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers. We have agreements with every major automaker (“OEMs”) to offer satellite radio in their vehicles, through which we acquire the majority of our subscribers. We also acquire subscribers through marketing to owners and lessees of used vehicles that include factory-installed satellite radios that are not currently subscribing to our services. Our satellite radios are primarily distributed through automakers, retailers, and our website. Satellite radio services are also offered to customers of certain rental car companies. Our primary source of revenue is subscription fees, with most of our customers subscribing to monthly, quarterly, semi-annual or annual plans. We offer discounts for prepaid subscription plans, as well as a multiple subscription discount. We also derive revenue from certain fees, the sale of advertising on select non-music channels, the direct sale of satellite radios and accessories, and other ancillary services, such as our weather, traffic and data services. In many cases, a subscription to our radio services is included with the purchase or lease of new or previously owned vehicles. The length of these subscriptions varies but is typically three to twelve months. We receive payments for these subscriptions from certain automakers. We also reimburse various automakers for certain costs associated with satellite radios installed in new vehicles and pay revenue share to various automakers. On September 23, 2018, Holdings entered into an agreement to acquire Pandora Media, Inc. (“Pandora”) in an all-stock transaction initially valued at $3.5 billion. In connection with the acquisition, each outstanding share of Pandora common stock, par value $0.0001 per share, will be converted into the right to receive 1.44 shares of Holdings common stock, par value $0.001 per share. The transaction is conditioned upon the vote of holders of a majority of the combined voting power of the outstanding shares of Pandora common stock and the outstanding shares of Pandora’s Series A Preferred Stock, voting together as a single class, in favor of the adoption of the merger agreement. In addition, the completion of the transaction is subject to other customary conditions, including, among others, the absence of any law or order that prohibits or makes illegal the merger and, subject to certain exceptions, the accuracy of the representations and warranties of each party and compliance by the parties with their respective covenants. The transaction is expected to close in the first quarter of 2019. Refer to Note 11 for more information on this transaction. As of December 31, 2018, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, approximately 73% 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 consolidated financial statements of Holdings and its subsidiaries 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. Public companies are required to disclose certain information about their reportable operating segments. Operating segments are defined as significant components of an enterprise for which separate financial information is available and is evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We have determined that we have one reportable segment as our chief operating decision maker, our Chief Executive Officer, assesses performance and allocates resources based on the consolidated results of operations of our business. We have evaluated events subsequent to the balance sheet date and prior to the filing of this Annual Report on Form 10-K for the year ended December 31, 2018 and have determined that no events have occurred that would require adjustment to our consolidated financial statements. For a discussion of subsequent events that do not require adjustment to our consolidated financial statements refer to Note 17. 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 consolidated financial statements include asset impairment, depreciable lives of our satellites, share-based payment expense, and income taxes. |
Acquisition |
12 Months Ended |
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Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On April 18, 2017, Sirius XM acquired Automatic Labs Inc. (“Automatic”), a connected vehicle device and mobile application company, for an aggregate purchase price of $107,736, net of cash and restricted cash acquired of $819. The transaction was accounted for using the acquisition method of accounting. No purchase price adjustments were recorded during the year ended December 31, 2018. As of December 31, 2018, the Goodwill balance associated with the acquisition was $81,475 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies In addition to the significant accounting policies discussed in this Note 3, the following table includes our significant accounting policies that are described in other notes to our consolidated financial statements, including the number and page of the note:
Cash and Cash Equivalents Our cash and cash equivalents consist of cash on hand, money market funds, certificates of deposit, in-transit credit card receipts and highly liquid investments purchased with an original maturity of three months or less. Revenue Recognition Revenue is measured according to Accounting Standards Codification ("ASC") 606, Revenue - Revenue from Contracts with Customers, and is recognized based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We recognize revenue when it satisfies a performance obligation by transferring control over a service or product to a customer. We report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific revenue-producing transaction between a seller and a customer in our consolidated statements of comprehensive income. For equipment sales, we are responsible for arranging for shipping and handling. Shipping and handling costs billed to customers are recorded as revenue and are reported as a component of Cost of equipment. The following is a description of the principal activities from which we generate our revenue, including from self-pay and paid promotional subscribers, advertising, and sales of equipment. Subscriber revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio typically receive between a three and twelve month subscription to our service. In certain cases, the subscription fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the OEM when we receive a certain amount of payments from self-pay customers acquired from that OEM. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life. Revenue share and loyalty fees paid to an OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service. We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue. Additionally, we pay certain third parties a percentage of advertising revenue. Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service. Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted. Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon shipment. Revenue is recognized net of discounts and rebates. Shipping and handling costs billed to customers are recorded as revenue. Shipping and handling costs associated with shipping goods to customers are reported as a component of Cost of equipment. Music royalty fee and other revenue primarily consists of U.S. music royalty fees ("MRF") collected from subscribers. The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense. Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the subscription services which are continuously delivered to our customers. Customers pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our consolidated statement of comprehensive income as the services are provided. Changes in the deferred revenue balance during the period ended December 31, 2018 was not materially impacted by other factors. As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. As of December 31, 2018, less than ten percent of our total deferred revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance. These amounts are recognized on a straight-line basis as our services are provided. Revenue Share We share a portion of our subscription revenues earned from self-pay subscribers with certain automakers. The terms of the revenue share agreements vary with each automaker, but are typically based upon the earned audio revenue as reported or gross billed audio revenue. Programming Costs Programming costs which are for a specified number of events are amortized on an event-by-event basis; programming costs which are for a specified season or include programming through a dedicated channel are amortized over the season or period on a straight-line basis. We allocate a portion of certain programming costs which are related to sponsorship and marketing activities to Sales and marketing expense on a straight-line basis over the term of the agreement. Advertising Costs Media is expensed when aired and advertising production costs are expensed as incurred. Advertising production costs include expenses related to marketing and retention activities, including expenses related to direct mail, outbound telemarketing and email communications. We also incur advertising production costs related to cooperative marketing and promotional events and sponsorships. During the years ended December 31, 2018, 2017 and 2016, we recorded advertising costs of $266,935, $262,701 and $226,969, respectively. These costs are reflected in Sales and marketing expense in our consolidated statements of comprehensive income. Subscriber Acquisition Costs Subscriber acquisition costs consist of costs incurred to acquire new subscribers which include hardware subsidies paid to radio manufacturers, distributors and automakers, including subsidies paid to automakers who include a satellite radio and a prepaid subscription to our service in the sale or lease price of a new vehicle; subsidies paid for chipsets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets; commissions paid to retailers and automakers as incentives to purchase, install and activate radios; product warranty obligations; freight; and provisions for inventory allowance attributable to inventory consumed in our OEM and retail distribution channels. Subscriber acquisition costs do not include advertising costs, loyalty payments to distributors and dealers of radios and revenue share payments to automakers and retailers of radios. Subsidies paid to radio manufacturers and automakers are expensed upon installation, shipment, receipt of product or activation and are included in Subscriber acquisition costs because we are responsible for providing the service to the customers. Commissions paid to retailers and automakers are expensed upon either the sale or activation of radios. Chipsets that are shipped to radio manufacturers and held on consignment are recorded as inventory and expensed as Subscriber acquisition costs when placed into production by radio manufacturers. Costs for chipsets not held on consignment are expensed as Subscriber acquisition costs when the automaker confirms receipt. Research & Development Costs Research and development costs are expensed as incurred and primarily include the cost of new product development, chipset design, software development and engineering. During the years ended December 31, 2018, 2017 and 2016, we recorded research and development costs of $105,975, $96,917 and $69,025, respectively. These costs are reported as a component of Engineering, design and development expense in our consolidated statements of comprehensive income. Accumulated Other Comprehensive (Loss) Income, net of tax Accumulated other comprehensive loss of $6,193 was primarily comprised of the cumulative foreign currency translation adjustments related to Sirius XM Canada (refer to Note 11 for additional information). During the year ended December 31, 2018, we recorded a foreign currency translation adjustment loss of $28,613, which is recorded net of tax of $9,451. In addition, we reclassified stranded tax effects of $4,013 related to the adoption of Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. During the years ended December 31, 2017 and 2016, we recorded foreign currency translation adjustment gains of $18,546 and $363, respectively, net of tax. 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. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. 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 will adopt this ASU on January 1, 2019 and elected the additional transition method and do not expect to record a cumulative effect adjustment to opening Accumulated deficit. Our leases consist of repeater leases, facility leases and equipment leases. We expect the adoption of ASU 2016-02 will result in the recognition of right-of-use assets of approximately $360,000 and lease liabilities of approximately $370,000 in our consolidated balance sheets for operating leases and will not impact our consolidated statements of operations or our debt. Recently Adopted Accounting Policies ASU 2014-09, Revenue - Revenue from Contracts with Customers. In May 2014, the FASB issued ASU 2014-09 which requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09, and all related amendments, which established ASC Topic 606 (the "new revenue standard"), effective as of January 1, 2018. We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The new revenue standard primarily impacts how we account for revenue share payments and also has other immaterial impacts. Revenue Share - Paid Trials We previously recorded revenue share related to paid trials as Revenue share and royalties expense. Under the new revenue standard, we have recorded these revenue share payments as a reduction to revenue as the payments do not transfer a distinct good or service to us. Prior to the adoption, we recognized revenue share related to paid trial subscriptions as the Current portion of deferred revenue. Under the new revenue standard, we reclassified the revenue share related to paid trial subscriptions existing as of the date of adoption from Current portion of deferred revenue to Accounts payable and accrued expenses. For new paid trial subscriptions, the net amount of the paid trial subscription is recorded as deferred revenue and the portion of revenue share is recorded to Accounts payable and accrued expenses. Other Impacts Other impacts of the new revenue standard include:
These changes do not have a material impact to our financial statements. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02 to amend its standard on comprehensive income to provide an option for an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) that was passed in December 2017 from accumulated other comprehensive income (“AOCI”) directly to retained earnings. The stranded tax effects result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal years beginning after December 15, 2018, with early adoption permitted. We elected to adopt ASU 2018-02 effective January 1, 2018 and reclassified the stranded tax effects due to the Tax Act of $4,013 related to the currency translation adjustment from our investment balance and note receivable with Sirius XM Canada from AOCI to Accumulated deficit. The adoption did not have any impact on our consolidated statement of comprehensive income. ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. In June 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments made to nonemployees so that the accounting for such payments is substantially the same as those made to employees, with certain exceptions. Under this ASU, equity-classified share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to ASC 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees, unless the award is modified after the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing services. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We elected to early adopt ASU 2018-07 effective July 1, 2018 and remeasured our unsettled liability-classified nonemployee awards at their January 1, 2018 fair value by recording a retrospective cumulative effect adjustment to opening Accumulated deficit and reclassified our previously liability-classified awards to equity. The cumulative effects of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09, ASU 2018-02 and ASU 2018-07 are included in the table below.
The following tables illustrate the impacts of adopting ASU 2014-09 on our consolidated statement of comprehensive income.
ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU updates the guidance related to the statement of cash flows and requires that the statement includes restricted cash with cash and cash equivalents when reconciling beginning and ending cash. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We adopted this ASU effective January 1, 2018. As a result of the adoption, we have added restricted cash to the reconciliation of beginning and ending cash and cash equivalents and included a reconciliation of total cash, cash equivalents and restricted cash to the balance sheet for each period presented in the consolidated statements of cash flows. ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. We elected to early adopt this ASU in the third quarter of 2016, which required that any adjustments be reflected as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The areas for simplification in this ASU involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeiture calculations, and classification on the statement of cash flows. The primary impact of adoption of ASU 2016-09 was the recognition of excess tax benefits in our provision for income taxes. Additionally, we recognized net operating losses related to excess share-based compensation tax return deductions that were previously tracked off balance sheet but not recorded in our financial statements. As of January 1, 2016, $293,896, net of a $1,946 reserve for an uncertain tax position, was recorded as an increase to our Deferred tax assets and decrease to our Accumulated deficit in our consolidated balance sheets as a result of the cumulative effect of this change in accounting principle. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants. As of December 31, 2018 and 2017, the carrying amounts of cash and cash equivalents, receivables, and accounts payable approximated fair value due to the short-term nature of these instruments. ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for input into valuation techniques as follows:
Investments are periodically reviewed for impairment and an impairment is recorded whenever declines in fair value below carrying value are determined to be other than temporary. In making this determination, we consider, among other factors, the severity and duration of the decline as well as the likelihood of a recovery within a reasonable timeframe. Our assets and liabilities measured at fair value were as follows:
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Earnings per Share |
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Earnings per Share | Earnings per Share Basic net income per common share is calculated by dividing the income available to common stockholders by the weighted average common shares outstanding during each reporting period. Diluted net income per common share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. We had no participating securities during the years ended December 31, 2018, 2017 and 2016. Common stock equivalents of 39,877, 40,541 and 208,202 for the years ended December 31, 2018, 2017 and 2016, respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive.
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Receivables, net |
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Receivables, net | Receivables, net Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables. Customer accounts receivable, net, includes receivables from our subscribers and other customers, including advertising, and is stated at amounts due, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is based upon our assessment of various factors. We consider historical experience, the age of the receivable balances, current economic conditions and other factors that may affect the counterparty’s ability to pay. Bad debt expense is included in Customer service and billing expense in our 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:
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Inventory, net |
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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 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 consolidated statements of comprehensive income. Inventory, net, consists of the following:
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Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Our annual impairment assessment of our single reporting unit is performed as of the fourth quarter of each year, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ASC 350, Intangibles - Goodwill and Other, states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASC 350 also states that a reporting unit with a zero or negative carrying amount is not required to perform a qualitative assessment. The carrying amount recorded for our one reporting unit and goodwill was $(1,816,921) and $2,289,985, respectively, as of December 31, 2018. We recorded $3,403 to Goodwill related to an immaterial acquisition during the year ended December 31, 2018. As of December 31, 2018, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the years ended December 31, 2018 and 2017. As of December 31, 2018, 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 $4,766,190, which was recognized during the year ended December 31, 2008. |
Intangible Assets |
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Intangible Assets | Intangible Assets Our intangible assets include the following:
Indefinite Life Intangible Assets We have identified our FCC licenses and the 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. 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. ASC 350-30-35, Intangibles - Goodwill and Other, provides for an option to first perform a qualitative assessment to determine whether it is more likely than not that an asset is impaired. If the qualitative assessment supports that it is more likely than not that the fair value of the asset exceeds its carrying value, a quantitative impairment test is not required. If the qualitative assessment does not support the fair value of the asset, then a quantitative assessment is performed. Our annual impairment assessment of our identifiable indefinite lived 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 in an amount equal to that excess. We completed qualitative assessments of our FCC licenses and XM and, to the extent applicable, Automatic trademarks during the fourth quarter of 2018, 2017 and 2016. As of the date of our annual assessment for 2018, 2017 and 2016, our qualitative impairment assessment of the fair value of our indefinite intangible assets indicated that such assets substantially exceeded their carrying value and therefore was not at risk of impairment. No impairments were recorded for intangible assets with indefinite lives during the years ended December 31, 2018, 2017 and 2016. Definite Life Intangible Assets Definite-lived intangible assets are amortized over their respective estimated useful lives to their estimated residual values, in a pattern that reflects when the economic benefits will be consumed, and are reviewed for impairment under the provisions of ASC 360-10-35, Property, Plant and Equipment/Overall/Subsequent Measurement. We review intangible assets subject to amortization for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized in an amount by which the carrying amount of the asset exceeds its fair value. No impairments were recorded for intangible assets with definite lives during the years ended December 31, 2018, 2017 and 2016. Amortization expense for all definite life intangible assets was $23,185, $37,455 and $48,545 for the years ended December 31, 2018, 2017 and 2016, respectively. We retired definite lived intangible assets of $390,043 during the year ended December 31, 2018 primarily related to fully amortized subscriber relationships and acquired proprietary software. There were no retirements of definite lived intangible assets during the years ended December 31, 2017 and 2016. The expected amortization expense for each of the fiscal years 2019 through 2023 and for periods thereafter is as follows:
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Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, including satellites, are stated at cost, less accumulated depreciation. Equipment under capital leases is stated at the present value of minimum lease payments. Depreciation is calculated using the straight-line method over the following estimated useful life of the asset:
We review long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds the estimated future cash flows, an impairment charge is recognized in an amount by which the carrying amount exceeds the fair value of the asset. We did not record any impairments during the years ended December 31, 2018, 2017 and 2016. Property and equipment, net, consists of the following:
Construction in progress consists of the following:
Depreciation and amortization expense on property and equipment was $277,535, $261,147, and $220,434 for the years ended December 31, 2018, 2017 and 2016, respectively. We retired property and equipment of $35,122, $78,559 and $843,129 during the years ended December 31, 2018, 2017 and 2016, respectively, which included approximately $801,206 related to satellites during 2016. We recognized a loss on disposal of assets of $12,912, which was recorded in Satellite and transmission expense in our consolidated statements of comprehensive income, during the year ended December 31, 2016, which related to the disposal of certain obsolete spare parts for a future satellite. 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 $11,864, $4,948 and $419 for the years ended December 31, 2018, 2017 and 2016, respectively, which related to the construction of our SXM-7 and SXM-8 satellites. Satellites As of December 31, 2018, we owned a fleet of five satellites. The chart below provides certain information on our satellites as of December 31, 2018:
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:
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Related Party Transactions |
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Related Party Transactions | Related Party Transactions In the normal course of business, we enter into transactions with related parties such as Liberty Media, Sirius XM Canada and Pandora. Liberty Media As of December 31, 2018, Liberty Media beneficially owned, directly and indirectly, approximately 73% of the outstanding shares of our common stock. Liberty Media has two executives and one of its directors on our board of directors. Gregory B. Maffei, the President and Chief Executive Officer of Liberty Media, is the Chairman of our board of directors. Sirius XM Canada On May 25, 2017, Sirius XM completed a recapitalization of Sirius XM Canada (the “Transaction”), which is now a privately held corporation. Following the Transaction, Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada, with the remainder of the voting power and equity interests held by two of Sirius XM Canada’s previous shareholders. The total consideration from Sirius XM to Sirius XM Canada, excluding transaction costs, during the year ended December 31, 2017 was $308,526, which included $129,676 in cash and we issued 35,000 shares of our common stock with an aggregate value of $178,850 to the holders of the shares of Sirius XM Canada acquired in the Transaction. Sirius XM received common stock, non-voting common stock and preferred stock of Sirius XM Canada. We own 590,950 shares of preferred stock of Sirius XM Canada, which has a liquidation preference of one Canadian dollar per share. In connection with the Transaction, Sirius XM also made a loan to Sirius XM Canada in the aggregate amount of $130,794. The loan is denominated in Canadian dollars and is considered a long-term investment with any unrealized gains or losses reported within Accumulated other comprehensive (loss) income. The loan has a term of fifteen years, bears interest at a rate of 7.62% per annum and includes customary covenants and events of default, including an event of default relating to Sirius XM Canada’s failure to maintain specified leverage ratios. The terms of the loan require Sirius XM Canada to prepay a portion of the outstanding principal amount of the loan within sixty days of the end of each fiscal year in an amount equal to any cash on hand in excess of C$10,000 at the last day of the financial year if all target dividends have been paid in full. During the year ended December 31, 2018, Sirius XM Canada repaid $3,242 of the principal amount of the loan. In connection with the Transaction, Sirius XM also entered into a Services Agreement and an Advisory Services Agreement with Sirius XM Canada. Each agreement has a thirty year term. Pursuant to the Services Agreement, Sirius XM Canada pays Sirius XM 25% of its gross revenues on a monthly basis through December 31, 2021 and 30% of its gross revenues on a monthly basis thereafter. Pursuant to the Advisory Services Agreement, Sirius XM Canada pays Sirius XM 5% of its gross revenues on a monthly basis. These agreements superseded and replaced the former agreements between Sirius XM Canada and its predecessors and Sirius XM. Sirius XM Canada is accounted for as an equity method investment, and its results are not consolidated in our 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. The difference between our investment and our share of the fair value of the underlying net assets of Sirius XM Canada is first allocated to either finite-lived intangibles or indefinite-lived intangibles and the balance is attributed to goodwill. We follow ASC 350, Intangibles - Goodwill and Other, which requires that equity method finite-lived intangibles be amortized over their estimated useful life while indefinite-lived intangibles and goodwill are not amortized. The amortization of equity method finite-lived intangible assets is recorded in Other income (expense) in our consolidated statements of comprehensive income. We periodically evaluate our equity method investments to determine if there has been an other-than temporary decline in fair value below carrying value. Equity method finite-lived intangibles, indefinite-lived intangibles and goodwill are included in the carrying amount of the investment. We had the following related party balances associated with Sirius XM Canada:
As of December 31, 2018 and 2017, our related party current asset balance included amounts due under the Services Agreement and Advisory Services Agreement and certain amounts related to transactions outside the scope of the new services arrangements. Our related party long-term assets balance as of December 31, 2018 and 2017 included the carrying value of our investment balance in Sirius XM Canada of $311,213 and $341,214, respectively, and, as of December 31, 2018 and 2017, also included $126,013 and $140,073, respectively, for the long-term value of the outstanding loan to Sirius XM Canada. Our related party liabilities as of each of December 31, 2018 and 2017 included $2,776 for the current portion of deferred revenue and $2,312 and $5,088, respectively, 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. We recorded the following revenue and other income associated with Sirius XM Canada in our consolidated statements of comprehensive income:
Pandora On September 22, 2017, Sirius XM completed a $480,000 investment in Pandora in which Sirius XM purchased 480 shares of Pandora’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”). As of December 31, 2018, the Series A Preferred Stock, including accrued but unpaid dividends, represents a stake of approximately 18% of Pandora's common stock outstanding and approximately a 15% interest on an as-converted basis. Pandora operates an internet-based music discovery platform, offering a personalized experience for listeners. The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock of Pandora (“Pandora Common Stock”) at an initial conversion price of $10.50 per share of Pandora Common Stock and an initial conversion rate of 95.2381 shares of Pandora Common Stock per share of Series A Preferred Stock, subject to certain customary anti-dilution adjustments. Holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 6.0% per annum, payable quarterly in arrears, if and when declared. Pandora has the option to pay dividends in cash or accumulate dividends in lieu of paying cash. Any conversion of Series A Preferred Stock may be settled by Pandora, at its option, in shares of Pandora Common Stock, cash or any combination thereof. However, unless and until Pandora’s stockholders have approved the issuance of greater than 19.99% of the outstanding Pandora Common Stock, the Series A Preferred Stock may not be converted into more than 19.99% of Pandora’s outstanding Pandora Common Stock as of June 9, 2017. The liquidation preference of the Series A Preferred Stock, including accrued dividends of $40,969, was $520,969 as of December 31, 2018. As the investment includes a conversion option, we have elected to account for this investment under the fair value option to reduce the accounting asymmetry that would otherwise arise when recognizing the changes in the fair value of available-for-sale investments. Under the fair value option, any gains (losses) associated with the change in fair value will be recognized in Other income within our consolidated statements of comprehensive income. In connection with the acquisition of Pandora, the Series A Preferred Stock will be canceled as part of the proposed transaction. We recognized a $42,617 and $472 unrealized gain during the years ended December 31, 2018 and 2017 as Other income (expense) in our consolidated statements of comprehensive income for this investment. The fair value of our investment in Pandora, including accrued dividends, as of December 31, 2018 and 2017 was $523,089 and $480,472, respectively, and is recorded as a related party long-term asset within our consolidated balance sheets. This investment does not meet the requirements for the equity method of accounting as it does not qualify as in-substance common stock. On September 23, 2018, Holdings entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), by and among Holdings, Pandora, Billboard Holding Company, Inc., a wholly-owned subsidiary of Pandora, Billboard Acquisition Sub, Inc., a wholly-owned subsidiary of Billboard Holding Company, Inc., Sirius XM and White Oaks Acquisition Corp., pursuant to which, subject to the terms and conditions of the Merger Agreement, Holdings agreed to acquire Pandora (such transaction, the “Merger”). Pursuant to the Merger, each outstanding share of Pandora Common Stock, will be converted into the right to receive 1.44 shares (the “Exchange Ratio”) of Holdings common stock, par value $0.001 per share (“Holdings Common Stock”). In connection with the Merger, the Series A Preferred Stock will be canceled for no consideration. Further, pursuant to the Merger:
The Merger Agreement contains customary representations and warranties from both Holdings and Pandora, and each party has agreed to customary covenants, including covenants relating to the conduct of Holdings’ and Pandora’s businesses during the period between the execution of the Merger Agreement and the closing of the Merger. In the case of Pandora, such obligations include its agreement to call a meeting of its stockholders to adopt the Merger Agreement, and, subject to certain exceptions, to recommend that its stockholders adopt the Merger Agreement. The Pandora stockholders voted to adopt the Merger Agreement at a special stockholder meeting on January 29, 2019. The completion of the Merger is subject to customary conditions, including, among others, the absence of any law or order that prohibits or makes illegal the Merger and, subject to certain exceptions, the accuracy of the representations and warranties of each party and compliance by the parties with their respective covenants. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Our debt as of December 31, 2018 and 2017 consisted of the following:
Covenants and Restrictions Under the Credit Facility, Sirius XM, our wholly-owned subsidiary, must comply with a debt maintenance covenant that it cannot exceed a total leverage ratio, calculated as consolidated total debt to consolidated operating cash flow, of 5.0 to 1.0. The Credit Facility generally requires compliance with certain covenants that restrict Sirius XM's ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another person, (vi) sell, assign, lease or otherwise dispose of all or substantially all of Sirius XM's assets, and (vii) make voluntary prepayments of certain debt, in each case subject to exceptions. The indentures governing Sirius XM's notes restrict Sirius XM's non-guarantor subsidiaries' ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiary guaranteeing each such series of notes on a pari passu basis. The indentures governing the notes also contain covenants that, among other things, limit Sirius XM's ability and the ability of its subsidiaries to create certain liens; enter into sale/leaseback transactions; and merge or consolidate. Under Sirius XM's debt agreements, the following generally constitute an event of default: (i) a default in the payment of interest; (ii) a default in the payment of principal; (iii) failure to comply with covenants; (iv) failure to pay other indebtedness after final maturity or acceleration of other indebtedness exceeding a specified amount; (v) certain events of bankruptcy; (vi) a judgment for payment of money exceeding a specified aggregate amount; and (vii) voidance of subsidiary guarantees, subject to grace periods where applicable. If an event of default occurs and is continuing, our debt could become immediately due and payable. At December 31, 2018 and 2017, we were in compliance with our debt covenants. |
Stockholders' Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Common Stock, par value $0.001 per share We are authorized to issue up to 9,000,000 shares of common stock. There were 4,345,606 and 4,530,928 shares of common stock issued and 4,345,606 and 4,527,742 shares outstanding on December 31, 2018 and December 31, 2017, respectively. As of December 31, 2018, there were 278,010 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 year ended December 31, 2018, we declared and paid the following dividends:
Stock Repurchase Program As of December 31, 2018, our board of directors had approved for repurchase an aggregate of $12,000,000 of our common stock. Our board of directors did not establish an end date for this stock repurchase program. Shares of common stock may be purchased from time to time on the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, including transactions with Liberty Media and its affiliates, or otherwise. As of December 31, 2018, our cumulative repurchases since December 2012 under our stock repurchase program totaled 2,683,109 shares for $10,674,252, and $1,325,748 remained available for future share repurchases under our stock repurchase program. The following table summarizes our total share repurchase activity for the years ended:
Preferred Stock, par value $0.001 per share We are authorized to issue up to 50,000 shares of undesignated preferred stock with a liquidation preference of $0.001 per share. There were no shares of preferred stock issued or outstanding as of December 31, 2018 and 2017. |
Benefit Plans |
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Benefit Plans | Benefit Plans We recognized share-based payment expense of $133,175, $124,069 and $108,604 for the years ended December 31, 2018, 2017 and 2016, respectively. We account for equity instruments granted in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on fair value. We use the Black-Scholes-Merton option-pricing model to value stock option awards and have elected to treat awards with graded vesting as a single award. Share-based compensation expense is recognized ratably over the requisite service period, which is generally the vesting period. We measure restricted stock awards and units using the fair market value of the restricted shares of common stock on the day the award is granted. Stock-based awards granted to employees, non-employees and members of our board of directors include stock options and restricted stock units. Fair value as determined using the Black-Scholes-Merton model varies based on assumptions used for the expected life, expected stock price volatility, expected dividend yield and risk-free interest rates. For the years ended December 31, 2018, 2017 and 2016, we estimated the fair value of awards granted using the hybrid approach for volatility, which weights observable historical volatility and implied volatility of qualifying actively traded options on our common stock. The expected life assumption represents the weighted-average period stock-based awards are expected to remain outstanding. These expected life assumptions are established through a review of historical exercise behavior of stock-based award grants with similar vesting periods. Where historical patterns do not exist for non-employees, contractual terms are used. Dividend yield is based on the current expected annual dividend per share and our stock price. The risk-free interest rate represents the daily treasury yield curve rate at the grant date based on the closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market for the expected term. Our assumptions may change in future periods. 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 December 31, 2018, 154,973 shares of common stock were available for future grants under the 2015 Plan. Other Plans We maintain two other share-based benefit plans — the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan and the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan. Excluding dividend equivalent units granted as a result of a declared dividend, no further awards may be made under these plans. The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors:
Since we did not historically pay dividends on our common stock prior to the fourth quarter of 2016, the expected dividend yield used in the Black-Scholes-Merton option-pricing model was less than one tenth percent for the year ended December 31, 2016. The following table summarizes stock option activity under our share-based plans for the years ended December 31, 2018, 2017 and 2016:
The weighted average grant date fair value per share of stock options granted during the years ended December 31, 2018, 2017 and 2016 was $1.45, $1.17 and $0.81, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2018, 2017 and 2016 was $214,705, $166,517 and $81,204, respectively. During the years ended December 31, 2018, 2017 and 2016 the number of net settled shares which were issued as a result of stock option exercises was 19,393, 16,957 and 10,918, respectively. We recognized share-based payment expense associated with stock options of $67,158, $78,491 and $80,266 for the years ended December 31, 2018, 2017 and 2016, respectively. The following table summarizes the restricted stock unit, including PRSU, activity under our share-based plans for the years ended December 31, 2018, 2017 and 2016:
The total intrinsic value of restricted stock units, including PRSUs, vesting during the years ended December 31, 2018, 2017 and 2016 was $84,623, $48,473 and $17,807, respectively. During the years ended December 31, 2018, 2017 and 2016, the number of net settled shares which were issued as a result of restricted stock units vesting totaled 7,444, 5,365 and 2,493, respectively. During the years ended December 31, 2018, 2017 and 2016, we granted 5,158, 938 and 3,036 PRSUs to certain employees, respectively. We believe it is probable that the performance target applicable to these PRSUs will be achieved. In connection with the cash dividends paid during the years ended December 31, 2018, 2017 and 2016, we granted 249, 247 and 70 restricted stock units, respectively, 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 years ended December 31, 2018, 2017 and 2016. We recognized share-based payment expense associated with restricted stock units, including PRSUs, of $66,017, $45,578 and $28,338 for the years ended December 31, 2018, 2017 and 2016, 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 December 31, 2018 and 2017 was $254,273 and $241,521, respectively. The total unrecognized compensation costs at December 31, 2018 are expected to be recognized over a weighted-average period of 1.8 years. 401(k) Savings Plan Sirius XM sponsors the Sirius XM Radio Inc. 401(k) Savings Plan (the “Sirius XM Plan”) for eligible employees. The Sirius XM Plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain defined limits. We match 50% of an employee’s voluntary contributions per pay period on the first 6% of an employee’s pre-tax salary up to a maximum of 3% of eligible compensation. We may also make additional discretionary matching, true-up matching and non-elective contributions to the Sirius XM Plan. Employer matching contributions under the Sirius XM Plan vest at a rate of 33.33% for each year of employment and are fully vested after three years of employment for all current and future contributions. Our cash employer matching contributions are not used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution. We recognized $8,692, $7,582 and $7,104 in expense during the years ended December 31, 2018, 2017 and 2016, respectively, in connection with the Sirius XM Plan. Sirius XM Holdings Inc. Deferred Compensation Plan In 2015, we adopted the Sirius XM Holdings Inc. Deferred Compensation Plan (the “DCP”). The DCP allows members of our board of directors and certain eligible employees to defer all or a portion of their base salary, cash incentive compensation and/or board of directors’ cash compensation, as applicable. Pursuant to the terms of the DCP, we may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so. We have established a grantor (or “rabbi”) trust to facilitate the payment of our obligations under the DCP. Contributions to the DCP, net of withdrawals, for the years ended December 31, 2018, 2017 and 2016 were $7,605, $7,628 and $4,295, respectively. As of December 31, 2018 and 2017, the fair value of the investments held in the trust were $21,860 and $14,641, respectively, which is included in Other long-term assets in our consolidated balance sheets and classified as trading securities. Trading gains and losses associated with these investments are recorded in Other income within our consolidated statements of comprehensive income. The associated liability is recorded within Other long-term liabilities in our consolidated balance sheets, and any increase or decrease in the liability is recorded in General and administration expense within our consolidated statements of comprehensive income. For the years ended December 31, 2018 and 2017, we recorded an immaterial amount of unrealized losses and gains on investments, respectively, held in the trust. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The following table summarizes our expected contractual cash commitments as of December 31, 2018:
Debt obligations. Debt obligations include principal payments on outstanding debt and capital lease obligations. Cash interest payments. Cash interest payments include interest due on outstanding debt and capital lease payments through maturity. Satellite and transmission. We have entered into agreements with several third parties to design, build, launch and insure two satellites, SXM-7 and SXM-8. We also have entered into agreements with third parties to operate and maintain satellite telemetry, tracking and control facilities and certain components of our terrestrial repeater networks. Programming and content. We have entered into various programming and content agreements. Under the terms of these agreements, our obligations include fixed payments, advertising commitments and revenue sharing arrangements. In certain of these agreements, the future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they are not included in our minimum contractual cash commitments. Sales and marketing. We have entered into various marketing, sponsorship and distribution agreements to promote our brand and are obligated to make payments to sponsors, retailers, automakers and radio manufacturers under these agreements. Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors. Satellite incentive payments. Boeing Satellite Systems International, Inc., the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments 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 $10,000 of additional incentive payments if our XM-4 satellite continues to operate above baseline specifications during the five years beyond the satellite’s fifteen-year design life, which is currently not expected to occur. Space Systems/Loral, the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments 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, equipment and terrestrial repeaters. These leases provide for minimum lease payments, additional operating expense charges, leasehold improvements and rent escalations that have initial terms ranging from one to fifteen years, and certain leases have options to renew. The effect of the rent holidays and rent concessions are recognized on a straight-line basis over the lease term, including reasonably assured renewal periods. Total rent recognized in connection with leases for the years ended December 31, 2018, 2017 and 2016 was $43,494, $43,375 and $46,968, respectively. Royalties and other. We have entered into certain music royalty arrangements that include fixed payments. We have also entered into various agreements with third parties for general operating purposes. In addition to the minimum contractual cash commitments described above, we have entered into other variable cost arrangements. These future costs are dependent upon many factors and are difficult to anticipate; however, these costs may be substantial. We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions. We also have a surety bond of approximately $45,000 primarily used as security against non-performance in the normal course of business. We do not have any other significant off-balance sheet financing arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources. Legal Proceedings In the ordinary course of business, we are a defendant or party to various claims and lawsuits, including those discussed below. We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the reasonably possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any. 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. The plaintiff has filed a motion seeking class certification, and that motion is pending. We believe we have substantial defenses to the claims asserted in this action, and we intend to defend this action vigorously. Other Matters. In the ordinary course of business, we are a defendant in various other lawsuits and arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases; and owners of patents, trademarks, copyrights or other intellectual property. None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes There is no current U.S. federal income tax provision, as all federal taxable income was offset by utilizing U.S. federal net operating loss carryforwards. The current state income tax provision is primarily related to taxable income in certain states that have suspended or limited the ability to use net operating loss carryforwards or where net operating losses have been fully utilized. The current foreign income tax provision is primarily related to foreign withholding taxes on dividends paid to us by Sirius XM Canada. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities. We file a consolidated federal income tax return for all of our wholly-owned subsidiaries, including Sirius XM. Income tax expense consisted of the following:
The following table presents a reconciliation of the U.S. federal statutory tax rate and our effective tax rate:
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act made broad and complex changes to the U.S. tax code, including, accelerated depreciation that will allow for full expensing of qualified property. The Tax Act also reduced the U.S. federal corporate income tax rate from 35% to 21%. The effective tax rate of 17.2% for the year ended December 31, 2018 was primarily impacted by the reduced federal tax rate to 21%, the recognition of excess tax benefits related to share based compensation and a benefit related to state and federal research and development credits. The effective tax rate of 48.7% for the year ended December 31, 2017 was negatively impacted by the revaluation of our net deferred tax assets, excluding after tax credits as of December 31, 2017 as a result of the reduction of the federal corporate income tax rate. This was offset by the recognition of excess tax benefits related to share based compensation and a benefit related to federal research and development credits, under the Protecting Americans from Tax Hikes Act of 2015. Based on this revaluation, we recorded an additional tax expense of $184,599 to reduce our net deferred tax asset balance for the year ended December 31, 2017. The effective tax rate of 31.7% for the year ended December 31, 2016 was primarily impacted by the benefit related to federal research and development credits. Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year-end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences can be carried forward under tax law. Our evaluation of the realizability of deferred tax assets considers both positive and negative evidence, including historical financial performance, scheduled reversal of deferred tax assets and liabilities, projected taxable income and tax planning strategies. The weight given to the potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities, shown before jurisdictional netting, are presented below:
Net operating loss carryforwards and tax credits increased as a result of accelerated tax benefits due to accounting methods changes and accelerated depreciation that allowed for full expensing on qualified property under the Tax Act offset by the utilization of net operating losses related to current year taxable income. For the years ended December 31, 2018 and 2017, we recorded $96,971 and $21,700 state and federal tax credits, respectively. Our gross federal net operating loss carryforwards are approximately $2,760,000. As of December 31, 2018 and 2017, we had a valuation allowance related to deferred tax assets of $66,229 and $52,883, respectively, which were not likely to be realized due to the timing of certain federal and state net operating loss limitations. During the year ended December 31, 2018, our allowance increased primarily due to time limitations associated with federal research and development credits. During the year ended December 31, 2017, our valuation allowance increased primarily due to the impact of the Tax Act as the federal rate decreases from 35% to 21% affected the value of the state valuation allowances. The net operating loss carryforwards and tax credits upon which the valuation allowance is assessed are projected to expire on various dates through 2037 and 2038, respectively. ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. If the tax position is not more likely than not to be sustained, the gross amount of the unrecognized tax position will not be recorded in the financial statements but will be shown in tabular format within the uncertain income tax positions. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs due to the following conditions: (1) the tax position is “more likely than not” to be sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired. A number of years may elapse before an uncertain tax position is effectively settled or until there is a lapse in the applicable statute of limitations. We record interest and penalties related to uncertain tax positions in Income tax expense in our consolidated statements of comprehensive income. As of December 31, 2018 and 2017, the gross liability for income taxes associated with uncertain tax positions was $387,149 and $334,254, respectively. If recognized, $306,675 of unrecognized tax benefits would affect our effective tax rate. Uncertain tax positions are recognized in Other long-term liabilities which, as of December 31, 2018 and 2017, were $8,541 and $12,190, respectively, including accrued interest. No penalties have been accrued. We have state income tax audits pending. We do not expect the ultimate outcome of these audits to have a material adverse effect on our financial position or results of operations. We also do not currently anticipate that our existing reserves related to uncertain tax positions as of December 31, 2018 will significantly increase or decrease during the year ending December 31, 2019. Various events could cause our current expectations to change. Should our position with respect to the majority of these uncertain tax positions be upheld, the effect would be recorded in our consolidated statements of comprehensive income as part of the income tax provision. We recorded interest expense of $627 and $708 for the years ended December 31, 2018 and 2017, respectively, related to unrecognized tax benefits. Changes in our uncertain income tax positions, from January 1 through December 31 are set forth below:
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Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Pandora Acquisition The Pandora stockholders voted to adopt the Merger Agreement at a special stockholder meeting on January 29, 2019. Capital Return Program On January 29, 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 February 28, 2019 to stockholders of record as of the close of business on February 11, 2019. On January 29, 2019, our board of directors approved an additional $2,000,000 for repurchase of our common stock. The new approval increases the amount of common stock that we have been authorized to repurchase to an aggregate of $14,000,000. Shares of common stock may be purchased from time to time on the open market and in privately negotiated transactions, including in accelerated stock repurchase transactions and transactions with Liberty Media and its affiliates. We intend to fund the additional repurchases through a combination of cash on hand, cash generated by operations and future borrowings. |
Quarterly Financial Data -- Unaudited |
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Quarterly Financial Data -- Unaudited | Quarterly Financial Data--Unaudited Our quarterly results of operations are summarized below:
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Schedule II - Schedule of Valuation and Qualifying Accounts |
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Schedule II - Schedule of Valuation and Qualifying Accounts | SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES Schedule II - Schedule of Valuation and Qualifying Accounts
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The accompanying consolidated financial statements of Holdings and its subsidiaries 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. |
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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 consolidated financial statements include asset impairment, depreciable lives of our satellites, share-based payment expense, and income taxes. |
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Cash and Cash Equivalents | Our cash and cash equivalents consist of cash on hand, money market funds, certificates of deposit, in-transit credit card receipts and highly liquid investments purchased with an original maturity of three months or less. |
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Revenue Recognition, Revenue Share, Programming Costs, Advertising Costs, and Subscriber Acquisition Costs | Revenue Recognition Revenue is measured according to Accounting Standards Codification ("ASC") 606, Revenue - Revenue from Contracts with Customers, and is recognized based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We recognize revenue when it satisfies a performance obligation by transferring control over a service or product to a customer. We report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific revenue-producing transaction between a seller and a customer in our consolidated statements of comprehensive income. For equipment sales, we are responsible for arranging for shipping and handling. Shipping and handling costs billed to customers are recorded as revenue and are reported as a component of Cost of equipment. The following is a description of the principal activities from which we generate our revenue, including from self-pay and paid promotional subscribers, advertising, and sales of equipment. Subscriber revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio typically receive between a three and twelve month subscription to our service. In certain cases, the subscription fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the OEM when we receive a certain amount of payments from self-pay customers acquired from that OEM. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life. Revenue share and loyalty fees paid to an OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service. We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue. Additionally, we pay certain third parties a percentage of advertising revenue. Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service. Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted. Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon shipment. Revenue is recognized net of discounts and rebates. Shipping and handling costs billed to customers are recorded as revenue. Shipping and handling costs associated with shipping goods to customers are reported as a component of Cost of equipment. Music royalty fee and other revenue primarily consists of U.S. music royalty fees ("MRF") collected from subscribers. The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense. Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the subscription services which are continuously delivered to our customers. Customers pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our consolidated statement of comprehensive income as the services are provided. Changes in the deferred revenue balance during the period ended December 31, 2018 was not materially impacted by other factors. As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. As of December 31, 2018, less than ten percent of our total deferred revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance. These amounts are recognized on a straight-line basis as our services are provided. Revenue Share We share a portion of our subscription revenues earned from self-pay subscribers with certain automakers. The terms of the revenue share agreements vary with each automaker, but are typically based upon the earned audio revenue as reported or gross billed audio revenue. Programming Costs Programming costs which are for a specified number of events are amortized on an event-by-event basis; programming costs which are for a specified season or include programming through a dedicated channel are amortized over the season or period on a straight-line basis. We allocate a portion of certain programming costs which are related to sponsorship and marketing activities to Sales and marketing expense on a straight-line basis over the term of the agreement. Advertising Costs Media is expensed when aired and advertising production costs are expensed as incurred. Advertising production costs include expenses related to marketing and retention activities, including expenses related to direct mail, outbound telemarketing and email communications. We also incur advertising production costs related to cooperative marketing and promotional events and sponsorships. During the years ended December 31, 2018, 2017 and 2016, we recorded advertising costs of $266,935, $262,701 and $226,969, respectively. These costs are reflected in Sales and marketing expense in our consolidated statements of comprehensive income. Subscriber Acquisition Costs Subscriber acquisition costs consist of costs incurred to acquire new subscribers which include hardware subsidies paid to radio manufacturers, distributors and automakers, including subsidies paid to automakers who include a satellite radio and a prepaid subscription to our service in the sale or lease price of a new vehicle; subsidies paid for chipsets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets; commissions paid to retailers and automakers as incentives to purchase, install and activate radios; product warranty obligations; freight; and provisions for inventory allowance attributable to inventory consumed in our OEM and retail distribution channels. Subscriber acquisition costs do not include advertising costs, loyalty payments to distributors and dealers of radios and revenue share payments to automakers and retailers of radios. Subsidies paid to radio manufacturers and automakers are expensed upon installation, shipment, receipt of product or activation and are included in Subscriber acquisition costs because we are responsible for providing the service to the customers. Commissions paid to retailers and automakers are expensed upon either the sale or activation of radios. Chipsets that are shipped to radio manufacturers and held on consignment are recorded as inventory and expensed as Subscriber acquisition costs when placed into production by radio manufacturers. Costs for chipsets not held on consignment are expensed as Subscriber acquisition costs when the automaker confirms receipt. |
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Research and Development Costs | Research and development costs are expensed as incurred and primarily include the cost of new product development, chipset design, software development and engineering. During the years ended December 31, 2018, 2017 and 2016, we recorded research and development costs of $105,975, $96,917 and $69,025, respectively. These costs are reported as a component of Engineering, design and development expense in our consolidated statements of comprehensive income. |
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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. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. 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 will adopt this ASU on January 1, 2019 and elected the additional transition method and do not expect to record a cumulative effect adjustment to opening Accumulated deficit. Our leases consist of repeater leases, facility leases and equipment leases. We expect the adoption of ASU 2016-02 will result in the recognition of right-of-use assets of approximately $360,000 and lease liabilities of approximately $370,000 in our consolidated balance sheets for operating leases and will not impact our consolidated statements of operations or our debt. Recently Adopted Accounting Policies ASU 2014-09, Revenue - Revenue from Contracts with Customers. In May 2014, the FASB issued ASU 2014-09 which requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09, and all related amendments, which established ASC Topic 606 (the "new revenue standard"), effective as of January 1, 2018. We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The new revenue standard primarily impacts how we account for revenue share payments and also has other immaterial impacts. Revenue Share - Paid Trials We previously recorded revenue share related to paid trials as Revenue share and royalties expense. Under the new revenue standard, we have recorded these revenue share payments as a reduction to revenue as the payments do not transfer a distinct good or service to us. Prior to the adoption, we recognized revenue share related to paid trial subscriptions as the Current portion of deferred revenue. Under the new revenue standard, we reclassified the revenue share related to paid trial subscriptions existing as of the date of adoption from Current portion of deferred revenue to Accounts payable and accrued expenses. For new paid trial subscriptions, the net amount of the paid trial subscription is recorded as deferred revenue and the portion of revenue share is recorded to Accounts payable and accrued expenses. Other Impacts Other impacts of the new revenue standard include:
These changes do not have a material impact to our financial statements. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02 to amend its standard on comprehensive income to provide an option for an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) that was passed in December 2017 from accumulated other comprehensive income (“AOCI”) directly to retained earnings. The stranded tax effects result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal years beginning after December 15, 2018, with early adoption permitted. We elected to adopt ASU 2018-02 effective January 1, 2018 and reclassified the stranded tax effects due to the Tax Act of $4,013 related to the currency translation adjustment from our investment balance and note receivable with Sirius XM Canada from AOCI to Accumulated deficit. The adoption did not have any impact on our consolidated statement of comprehensive income. ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. In June 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments made to nonemployees so that the accounting for such payments is substantially the same as those made to employees, with certain exceptions. Under this ASU, equity-classified share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to ASC 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees, unless the award is modified after the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing services. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We elected to early adopt ASU 2018-07 effective July 1, 2018 and remeasured our unsettled liability-classified nonemployee awards at their January 1, 2018 fair value by recording a retrospective cumulative effect adjustment to opening Accumulated deficit and reclassified our previously liability-classified awards to equity. The cumulative effects of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09, ASU 2018-02 and ASU 2018-07 are included in the table below.
The following tables illustrate the impacts of adopting ASU 2014-09 on our consolidated statement of comprehensive income.
ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU updates the guidance related to the statement of cash flows and requires that the statement includes restricted cash with cash and cash equivalents when reconciling beginning and ending cash. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We adopted this ASU effective January 1, 2018. As a result of the adoption, we have added restricted cash to the reconciliation of beginning and ending cash and cash equivalents and included a reconciliation of total cash, cash equivalents and restricted cash to the balance sheet for each period presented in the consolidated statements of cash flows. ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. We elected to early adopt this ASU in the third quarter of 2016, which required that any adjustments be reflected as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The areas for simplification in this ASU involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeiture calculations, and classification on the statement of cash flows. The primary impact of adoption of ASU 2016-09 was the recognition of excess tax benefits in our provision for income taxes. Additionally, we recognized net operating losses related to excess share-based compensation tax return deductions that were previously tracked off balance sheet but not recorded in our financial statements. As of January 1, 2016, $293,896, net of a $1,946 reserve for an uncertain tax position, was recorded as an increase to our Deferred tax assets and decrease to our Accumulated deficit in our consolidated balance sheets as a result of the cumulative effect of this change in accounting |
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Fair Value Measurements | Investments are periodically reviewed for impairment and an impairment is recorded whenever declines in fair value below carrying value are determined to be other than temporary. In making this determination, we consider, among other factors, the severity and duration of the decline as well as the likelihood of a recovery within a reasonable timeframe. |
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Earnings per Share | Basic net income per common share is calculated by dividing the income available to common stockholders by the weighted average common shares outstanding during each reporting period. Diluted net income per common share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. |
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Receivables, net | Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables. Customer accounts receivable, net, includes receivables from our subscribers and other customers, including advertising, and is stated at amounts due, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is based upon our assessment of various factors. We consider historical experience, the age of the receivable balances, current economic conditions and other factors that may affect the counterparty’s ability to pay. Bad debt expense is included in Customer service and billing expense in our 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. |
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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 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 consolidated statements of comprehensive income. |
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Goodwill | Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Our annual impairment assessment of our single reporting unit is performed as of the fourth quarter of each year, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ASC 350, Intangibles - Goodwill and Other, states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASC 350 also states that a reporting unit with a zero or negative carrying amount is not required to perform a qualitative assessment. |
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Indefinite Life Intangible Assets | We have identified our FCC licenses and the 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. 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. ASC 350-30-35, Intangibles - Goodwill and Other, provides for an option to first perform a qualitative assessment to determine whether it is more likely than not that an asset is impaired. If the qualitative assessment supports that it is more likely than not that the fair value of the asset exceeds its carrying value, a quantitative impairment test is not required. If the qualitative assessment does not support the fair value of the asset, then a quantitative assessment is performed. Our annual impairment assessment of our identifiable indefinite lived 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 in an amount equal to that excess. |
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Definite Life Intangible Assets | Definite-lived intangible assets are amortized over their respective estimated useful lives to their estimated residual values, in a pattern that reflects when the economic benefits will be consumed, and are reviewed for impairment under the provisions of ASC 360-10-35, Property, Plant and Equipment/Overall/Subsequent Measurement. We review intangible assets subject to amortization for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized in an amount by which the carrying amount of the asset exceeds its fair value. |
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Property and Equipment | We review long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds the estimated future cash flows, an impairment charge is recognized in an amount by which the carrying amount exceeds the fair value of the asset. |
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Equity Method Investments | Sirius XM Canada is accounted for as an equity method investment, and its results are not consolidated in our 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. The difference between our investment and our share of the fair value of the underlying net assets of Sirius XM Canada is first allocated to either finite-lived intangibles or indefinite-lived intangibles and the balance is attributed to goodwill. We follow ASC 350, Intangibles - Goodwill and Other, which requires that equity method finite-lived intangibles be amortized over their estimated useful life while indefinite-lived intangibles and goodwill are not amortized. The amortization of equity method finite-lived intangible assets is recorded in Other income (expense) in our consolidated statements of comprehensive income. We periodically evaluate our equity method investments to determine if there has been an other-than temporary decline in fair value below carrying value. Equity method finite-lived intangibles, indefinite-lived intangibles and goodwill are included in the carrying amount of the investment. |
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Benefit Plans | We account for equity instruments granted in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on fair value. We use the Black-Scholes-Merton option-pricing model to value stock option awards and have elected to treat awards with graded vesting as a single award. Share-based compensation expense is recognized ratably over the requisite service period, which is generally the vesting period. We measure restricted stock awards and units using the fair market value of the restricted shares of common stock on the day the award is granted. Stock-based awards granted to employees, non-employees and members of our board of directors include stock options and restricted stock units. Fair value as determined using the Black-Scholes-Merton model varies based on assumptions used for the expected life, expected stock price volatility, expected dividend yield and risk-free interest rates. For the years ended December 31, 2018, 2017 and 2016, we estimated the fair value of awards granted using the hybrid approach for volatility, which weights observable historical volatility and implied volatility of qualifying actively traded options on our common stock. The expected life assumption represents the weighted-average period stock-based awards are expected to remain outstanding. These expected life assumptions are established through a review of historical exercise behavior of stock-based award grants with similar vesting periods. Where historical patterns do not exist for non-employees, contractual terms are used. Dividend yield is based on the current expected annual dividend per share and our stock price. The risk-free interest rate represents the daily treasury yield curve rate at the grant date based on the closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market for the expected term. Our assumptions may change in future periods. |
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Legal Reserves | 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. |
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Income Taxes | ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. If the tax position is not more likely than not to be sustained, the gross amount of the unrecognized tax position will not be recorded in the financial statements but will be shown in tabular format within the uncertain income tax positions. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs due to the following conditions: (1) the tax position is “more likely than not” to be sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired. A number of years may elapse before an uncertain tax position is effectively settled or until there is a lapse in the applicable statute of limitations. We record interest and penalties related to uncertain tax positions in Income tax expense in our consolidated statements of comprehensive income. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Significant Accounting Policies | In addition to the significant accounting policies discussed in this Note 3, the following table includes our significant accounting policies that are described in other notes to our consolidated financial statements, including the number and page of the note: |
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Schedule of new ASU adoption impact on financial statements | The cumulative effects of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09, ASU 2018-02 and ASU 2018-07 are included in the table below.
The following tables illustrate the impacts of adopting ASU 2014-09 on our consolidated statement of comprehensive income.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of assets and liabilities measured at fair value | Our assets and liabilities measured at fair value were as follows:
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Earnings per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share |
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Receivables, net (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable, net | Receivables, net, consists of the following:
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Inventory, net (Tables) |
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Summary of inventory, net | Inventory, net, consists of the following:
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of indefinite-lived intangible assets | Our intangible assets include the following:
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Schedule of finite-lived intangible assets | Our intangible assets include the following:
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Expected future amortization expense | The expected amortization expense for each of the fiscal years 2019 through 2023 and for periods thereafter is as follows:
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | Property and equipment, net, consists of the following:
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Summary of orbiting satellites | The chart below provides certain information on our satellites as of December 31, 2018:
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Years in which licenses expire | The following table outlines the years in which each of our satellite licenses expires:
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Construction in progress | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | Construction in progress consists of the following:
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Related Party Transactions (Tables) - Equity Method Investee |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of related party balances | We had the following related party balances associated with Sirius XM Canada:
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Schedule of related party revenues and other income | We recorded the following revenue and other income associated with Sirius XM Canada in our consolidated statements of comprehensive income:
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | Our debt as of December 31, 2018 and 2017 consisted of the following:
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Stockholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of dividends declared | During the year ended December 31, 2018, we declared and paid the following dividends:
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Schedule of repurchase agreements | The following table summarizes our total share repurchase activity for the years ended:
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Benefit Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of options granted | The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors:
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Stock options activity under share-based payment plans | The following table summarizes stock option activity under our share-based plans for the years ended December 31, 2018, 2017 and 2016:
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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 years ended December 31, 2018, 2017 and 2016:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected contractual cash commitments | The following table summarizes our expected contractual cash commitments as of December 31, 2018:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of income tax expense | We file a consolidated federal income tax return for all of our wholly-owned subsidiaries, including Sirius XM. Income tax expense consisted of the following:
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Schedule of effective income tax rate reconciliation | The following table presents a reconciliation of the U.S. federal statutory tax rate and our effective tax rate:
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Schedule of deferred tax assets and liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities, shown before jurisdictional netting, are presented below:
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Summary of income tax contingencies | Changes in our uncertain income tax positions, from January 1 through December 31 are set forth below:
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Quarterly Financial Data -- Unaudited (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly financial information | Our quarterly results of operations are summarized below:
|
Acquisition (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Apr. 18, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Business Acquisition [Line Items] | ||||
Purchase price | $ 2,377 | $ 107,273 | $ 0 | |
Goodwill | 2,289,985 | $ 2,286,582 | ||
Automatic | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 107,736 | |||
Cash acquired | $ 819 | |||
Goodwill | $ 81,475 |
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jan. 01, 2018 |
Dec. 31, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Stockholders’ (deficit) equity | $ (1,816,921) | $ (1,523,874) | $ (792,015) | $ (166,491) | |
Foreign currency translation adjustment, net of tax | (28,613) | 18,546 | 363 | ||
Foreign currency translation adjustment, tax | 9,451 | ||||
Accumulated other comprehensive (loss) income, net of tax | (6,193) | 18,407 | $ 22,420 | ||
Adjustments Due to ASU 2018-02 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive (loss) income, net of tax | $ 4,013 | ||||
Accumulated Other Comprehensive Income (Loss) | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Stockholders’ (deficit) equity | $ (6,193) | $ 18,407 | $ (139) | $ (502) |
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - Pro Forma - Accounting Standards Update 2016-02 $ in Thousands |
Jan. 01, 2019
USD ($)
|
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use assets | $ 360,000 |
Lease liabilities | $ 370,000 |
Summary of Significant Accounting Policies - Impact of ASUs in the Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenues | |||||||||||
Total revenue | $ 1,495,908 | $ 1,467,383 | $ 1,432,299 | $ 1,375,102 | $ 1,403,898 | $ 1,379,596 | $ 1,347,569 | $ 1,294,066 | $ 5,770,692 | $ 5,425,129 | $ 5,017,220 |
Expenses | |||||||||||
Cost of services | 572,551 | 564,735 | 636,668 | 534,652 | 572,405 | 519,024 | 513,446 | 497,107 | |||
Subscriber acquisition costs | 470,336 | 499,492 | 512,809 | ||||||||
Income tax expense | (244,681) | (616,301) | (345,727) | ||||||||
Net income | $ 251,052 | $ 343,048 | $ 292,352 | $ 289,441 | $ (36,996) | $ 275,722 | $ 202,109 | $ 207,073 | 1,175,893 | 647,908 | 745,933 |
Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09 | |||||||||||
Expenses | |||||||||||
Subscriber acquisition costs | 3,540 | ||||||||||
Income tax expense | (534) | ||||||||||
Net income | 2,571 | ||||||||||
Balances Without Adoption of ASU 2014-09 | |||||||||||
Expenses | |||||||||||
Subscriber acquisition costs | 473,876 | ||||||||||
Income tax expense | (245,215) | ||||||||||
Net income | 1,178,464 | ||||||||||
Subscriber revenue | |||||||||||
Revenues | |||||||||||
Total revenue | 4,593,803 | 4,472,522 | 4,196,852 | ||||||||
Subscriber revenue | Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09 | |||||||||||
Revenues | |||||||||||
Total revenue | 94,767 | ||||||||||
Subscriber revenue | Balances Without Adoption of ASU 2014-09 | |||||||||||
Revenues | |||||||||||
Total revenue | 4,688,570 | ||||||||||
Revenue share and royalties | |||||||||||
Expenses | |||||||||||
Cost of services | 1,393,842 | $ 1,210,323 | $ 1,108,515 | ||||||||
Revenue share and royalties | Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09 | |||||||||||
Expenses | |||||||||||
Cost of services | 88,122 | ||||||||||
Revenue share and royalties | Balances Without Adoption of ASU 2014-09 | |||||||||||
Expenses | |||||||||||
Cost of services | $ 1,481,964 |
Summary of Significant Accounting Policies - Recently Adopted Accounting Policies - ASU 2016-09 (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Jan. 01, 2016 |
Dec. 31, 2015 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in accumulated deficit | $ (44,682) | $ (293,896) | |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Reserve for uncertain tax position | $ 1,946 | ||
Accumulated Deficit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in accumulated deficit | $ (10,271) | $ (293,896) | |
Accumulated Deficit | Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred income tax assets, net | 293,896 | ||
Decrease in accumulated deficit | $ 293,896 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Sep. 22, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
May 25, 2017 |
|
Liabilities: | |||||
Debt | $ 6,632,505 | $ 6,987,473 | |||
Investment | 16,833 | 612,465 | $ 0 | ||
Equity Method Investee | |||||
Liabilities: | |||||
Notes receivable, related parties | $ 130,794 | ||||
Pandora | |||||
Assets: | |||||
Pandora investment | 523,089 | 480,472 | |||
Pandora | Investee | |||||
Liabilities: | |||||
Investment | $ 480,000 | ||||
Sirius XM Canada | Equity Method Investee | |||||
Liabilities: | |||||
Equity method investments | 311,213 | 341,214 | |||
Notes receivable, related parties | 126,013 | 140,073 | |||
Level 1 | |||||
Liabilities: | |||||
Debt | 0 | 0 | |||
Level 1 | Pandora | |||||
Assets: | |||||
Pandora investment | 0 | 0 | |||
Level 2 | |||||
Liabilities: | |||||
Debt | 6,632,505 | 6,987,473 | |||
Level 2 | Pandora | |||||
Assets: | |||||
Pandora investment | 523,089 | 480,472 | |||
Level 3 | |||||
Liabilities: | |||||
Debt | 0 | 0 | |||
Level 3 | Pandora | |||||
Assets: | |||||
Pandora investment | $ 0 | $ 0 |
Earnings per Share - Additional Information (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Earnings Per Share [Abstract] | |||
Participating securities (in shares) | 0 | 0 | 0 |
Anti-dilutive common stock equivalents (in shares) | 39,877,000 | 40,541,000 | 208,202,000 |
Earnings per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Numerator: | |||||||||||
Net income available to common stockholders for basic and diluted net income per common share | $ 251,052 | $ 343,048 | $ 292,352 | $ 289,441 | $ (36,996) | $ 275,722 | $ 202,109 | $ 207,073 | $ 1,175,893 | $ 647,908 | $ 745,933 |
Denominator: | |||||||||||
Weighted average common shares outstanding for basic net income per common share (in shares) | 4,461,827 | 4,637,553 | 4,917,050 | ||||||||
Weighted average impact of dilutive equity instruments (in shares) | 98,893 | 85,982 | 47,678 | ||||||||
Weighted average shares for diluted net income per common share (in shares) | 4,560,720 | 4,723,535 | 4,964,728 | ||||||||
Net income per common share: | |||||||||||
Basic (in dollars per share) | $ 0.06 | $ 0.08 | $ 0.07 | $ 0.06 | $ (0.01) | $ 0.06 | $ 0.04 | $ 0.04 | $ 0.26 | $ 0.14 | $ 0.15 |
Diluted (in dollars per share) | $ 0.06 | $ 0.07 | $ 0.06 | $ 0.06 | $ (0.01) | $ 0.06 | $ 0.04 | $ 0.04 | 0.26 | $ 0.14 | $ 0.15 |
Adjustment of deferred tax assets | $ (184,599) | ||||||||||
Income tax effect on earnings per share (in dollars per share) | $ 0.04 |
Receivables, net (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounts receivable, net | ||
Gross customer accounts receivable | $ 104,604 | $ 100,342 |
Allowance for doubtful accounts | (6,618) | (9,500) |
Customer accounts receivable, net | 97,986 | 90,842 |
Receivables from distributors | 107,251 | 121,410 |
Other receivables | 27,749 | 29,475 |
Total receivables, net | $ 232,986 | $ 241,727 |
Inventory, net (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,854 | $ 6,489 |
Finished goods | 23,056 | 21,225 |
Allowance for obsolescence | (5,712) | (7,515) |
Total inventory, net | $ 22,198 | $ 20,199 |
Goodwill (Details) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018
USD ($)
reporting_unit
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Number of reporting units | reporting_unit | 1 | |||
Stockholders’ (deficit) equity | $ (1,816,921,000) | $ (1,523,874,000) | $ (792,015,000) | $ (166,491,000) |
Goodwill | 2,289,985,000 | 2,286,582,000 | ||
Goodwill acquired during period | 3,403,000 | |||
Impairment losses for goodwill | 0 | $ 0 | $ 0 | |
Accumulated impairment of goodwill since the merger | $ 4,766,190,000 |
Intangible Assets - Indefinite Life Intangible Assets (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | $ 0 | $ 0 | $ 0 |
Intangible Assets - Definite Life Intangible Assets (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of finite-lived intangible assets | $ 0 | $ 0 | $ 0 |
Amortization of intangible assets | 23,185,000 | 37,455,000 | $ 48,545,000 |
Retired | |||
Definite life intangible assets: | |||
Intangible assets | $ 390,043,000 | $ 0 |
Intangible Assets - Expected Amortization Expense for Each of the Fiscal Years (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Expected amortization expense for each of the fiscal years | |
2019 | $ 23,268 |
2020 | 22,687 |
2021 | 17,198 |
2022 | 15,542 |
2023 | 15,446 |
Thereafter | 72,766 |
Net Carrying Value | $ 166,907 |
Property and Equipment - Schedule of Construction in Progress (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Construction in progress | $ 411,503 | $ 301,153 |
Satellite system | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 296,281 | 183,243 |
Terrestrial repeater network | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 4,388 | 2,515 |
Capitalized software and hardware | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | 76,980 | 94,456 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Construction in progress | $ 33,854 | $ 20,939 |
Property and Equipment - Additional Information (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
satellite
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Property, Plant and Equipment [Abstract] | |||
Asset impairment charges | $ 0 | $ 0 | $ 0 |
Depreciation and amortization expense on property and equipment | 277,535,000 | 261,147,000 | 220,434,000 |
Property, Plant and Equipment [Line Items] | |||
Disposal of property and equipment | 35,122,000 | 78,559,000 | 843,129,000 |
Loss on disposal of assets | 0 | 0 | 12,912,000 |
Capitalized interest costs | $ 11,864,000 | $ 4,948,000 | 419,000 |
Number of owned satellites | satellite | 5 | ||
Satellite system | |||
Property, Plant and Equipment [Line Items] | |||
Disposal of property and equipment | $ 801,206,000 |
Related Party Transactions - Summary of Related Party Balances (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Related Party Transaction [Line Items] | ||
Related party current assets | $ 10,585 | $ 10,284 |
Related party long-term assets | 960,316 | 962,080 |
Related party current liabilities | 4,335 | 2,839 |
Related party long-term liabilities | 4,270 | 7,364 |
Equity Method Investee | Sirius XM Canada | ||
Related Party Transaction [Line Items] | ||
Related party current assets | 10,585 | 10,284 |
Related party long-term assets | 437,227 | 481,608 |
Related party current liabilities | 4,335 | 2,839 |
Related party long-term liabilities | $ 4,270 | $ 7,364 |
Related Party Transactions - Schedule of Related Party Revenue and Other Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other income (expense) | |||
Share of net earnings | $ (10,479) | $ 4,561 | $ 12,529 |
Dividends | 2,128 | 3,606 | 7,160 |
Sirius XM Canada | Equity Method Investee | |||
Related Party Transaction [Line Items] | |||
Revenue | 96,960 | 87,111 | 45,962 |
Other income (expense) | |||
Share of net earnings | (804) | 4,561 | 12,529 |
Dividends | 0 | 0 | 3,575 |
Interest income | $ 10,302 | $ 6,243 | $ 0 |
Related Party Transactions - Schedule of Related Party Revenue and Other Income, Additional Information (Details) - USD ($) $ in Thousands |
5 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
May 24, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Related Party Transaction [Line Items] | ||||
Amortization of intangible assets | $ 23,185 | $ 37,455 | $ 48,545 | |
Sirius XM Canada | Equity Method Investee | ||||
Related Party Transaction [Line Items] | ||||
Earning recognition lag period | 1 month | |||
Amortization of intangible assets | 2,434 | 1,501 | ||
Equity method investment, dividends, including reduction of investment | $ 2,240 | $ 3,796 | $ 7,548 | |
Sirius XM Canada | Equity Method Investee | Sirius Platform | ||||
Related Party Transaction [Line Items] | ||||
Percentage-based fee | 10.00% | |||
Sirius XM Canada | Equity Method Investee | X M Platform | ||||
Related Party Transaction [Line Items] | ||||
Percentage-based fee | 15.00% |
Debt - Schedule of Long-term Debt Instruments Additional Information (Details) |
Dec. 31, 2018 |
---|---|
Senior Secured Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Credit facility, unused capacity, commitment fee percentage | 0.25% |
Debt - Additional Information (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Senior Secured Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Maximum consolidated leverage ratio | 5.0 |
Stockholders' Equity - Common Stock (Details) - $ / shares |
Dec. 31, 2018 |
Sep. 23, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Equity [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 9,000,000,000 | 9,000,000,000 | |
Common stock, shares issued (in shares) | 4,345,606,000 | 4,530,928,000 | |
Common stock, shares outstanding (in shares) | 4,345,606,000 | 4,527,742,000 | |
Common stock reserved for issuance (in shares) | 278,010,000 |
Stockholders' Equity - Quarterly Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Oct. 09, 2018 |
Jul. 18, 2018 |
Apr. 26, 2018 |
Jan. 23, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Equity [Abstract] | |||||||
Dividends Per Share (in dollars per share) | $ 0.0121 | $ 0.011 | $ 0.011 | $ 0.011 | $ 0.0451 | $ 0.041 | $ 0.01 |
Total Amount | $ 53,434 | $ 49,316 | $ 49,287 | $ 49,397 |
Stockholders' Equity - Stock Repurchase Program (Details) shares in Thousands |
Dec. 31, 2018
USD ($)
shares
|
---|---|
Class of Stock [Line Items] | |
Number of shares repurchased (in shares) | shares | 2,683,109 |
Aggregate cost for shares repurchased | $ 10,674,252,000 |
Remaining amount authorized under the stock repurchase program | 1,325,748,000 |
Common Stock | |
Class of Stock [Line Items] | |
Stock repurchase program, aggregate authorized amount | $ 12,000,000,000 |
Stockholders' Equity - Schedule of Repurchase Agreements (Details) - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Shares Repurchase Activity [Line Items] | |||
Amount | $ 1,297,132 | $ 1,403,283 | $ 1,672,697 |
Open Market | |||
Shares Repurchase Activity [Line Items] | |||
Shares (in shares) | 208,973 | 270,527 | 420,111 |
Amount | $ 1,297,132 | $ 1,403,283 | $ 1,672,697 |
Stockholders' Equity - Preferred Stock (Details) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Equity [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Undesignated preferred stock authorized (in shares) | 50,000,000 | |
Preferred stock liquidation preference per share (in dollars per share) | $ 0.001 | |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Benefit Plans - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment expense | $ 133,175 | $ 124,069 | $ 108,604 |
Benefit Plans - Fair Value of Options Granted (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Retirement Benefits [Abstract] | |||
Risk-free interest rate | 2.70% | 1.80% | 1.10% |
Expected life of options — years | 4 years 4 months 17 days | 4 years 7 months 2 days | 4 years 2 months 30 days |
Expected stock price volatility | 23.00% | 24.00% | 22.00% |
Expected dividend yield | 0.70% | 0.70% | 0.00% |
Benefit Plans - Summary of Restricted Stock Unit and Stock Award Activity (Details) - Restricted Stock Units (RSUs) and Performance Shares - $ / shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Shares | |||
Nonvested as of beginning of period (in shares) | 31,323 | 29,893 | 16,088 |
Granted (in shares) | 17,475 | 11,721 | 18,523 |
Vested (in shares) | (12,775) | (8,842) | (4,212) |
Forfeited (in shares) | (1,415) | (1,449) | (506) |
Nonvested as of end of period (in shares) | 34,608 | 31,323 | 29,893 |
Grant Date Fair Value Per Share | |||
Nonvested as of beginning of period (in dollars per share) | $ 4.54 | $ 4.03 | $ 3.73 |
Granted (in dollars per share) | 6.40 | 5.35 | 4.21 |
Vested (in dollars per share) | 4.43 | 3.92 | 3.68 |
Forfeited (in dollars per share) | 4.99 | 4.42 | 3.75 |
Nonvested as of end of period (in dollars per share) | $ 5.50 | $ 4.54 | $ 4.03 |
Benefit Plans - 401(k) Savings Plan (Details) - Sirius XM Savings Plan - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
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 | $ 8,692 | $ 7,582 | $ 7,104 |
Benefit Plans - Sirius XM Holdings Inc. Deferred Compensation Plan (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Retirement Benefits [Abstract] | |||
Deferred compensation contributions | $ 7,605 | $ 7,628 | $ 4,295 |
Fair value of investment assets related to deferred compensation plan | 21,860 | 14,641 | |
Unrealized gains (losses) on investments | $ 0 | $ 0 |
Income Taxes - Additional Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Current federal income tax provision | $ 0 | $ 0 | $ 0 |
Adjustment of deferred tax assets | $ (184,599,000) | ||
Federal tax reform - deferred rate change | 0.00% | 14.60% | 0.00% |
Effective income tax rate percent | 17.20% | 48.70% | 31.70% |
Tax credit | $ 96,971,000 | $ 21,700,000 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | 66,229,000 | 52,883,000 | |
Unrecognized tax benefits | 387,149,000 | 334,254,000 | $ 303,583,000 |
Unrecognized tax benefits that would impact effective tax rate | 306,675,000 | ||
Uncertain tax positions are recognized in other long-term liabilities | 8,541,000 | 12,190,000 | |
Penalties accrued | 0 | ||
Unrecognized tax benefits, increase resulting from interest | 627,000 | $ 708,000 | |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Gross operating loss carryforwards | $ 2,760,000,000 |
Income Taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current taxes: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 12,038,000 | (32,579,000) | (21,782,000) |
Foreign | (144,000) | (202,000) | (383,000) |
Total current taxes | 11,894,000 | (32,781,000) | (22,165,000) |
Deferred taxes: | |||
Federal | (258,930,000) | (564,171,000) | (304,179,000) |
State | 2,355,000 | (19,349,000) | (19,383,000) |
Total deferred taxes | (256,575,000) | (583,520,000) | (323,562,000) |
Total income tax expense | $ (244,681,000) | $ (616,301,000) | $ (345,727,000) |
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal tax expense, at statutory rate | 21.00% | 35.00% | 35.00% |
State income tax expense, net of federal benefit | 3.60% | 2.80% | 2.80% |
Change in valuation allowance | 1.00% | (0.10%) | 0.00% |
Tax credits | (6.80%) | (1.70%) | (6.10%) |
Stock-based compensation | (3.10%) | (2.90%) | (0.60%) |
Federal tax reform - deferred rate change | 0.00% | 14.60% | 0.00% |
Other, net | 1.50% | 1.00% | 0.60% |
Effective tax rate | 17.20% | 48.70% | 31.70% |
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforwards and tax credits | $ 952,316 | $ 686,277 |
Deferred revenue | 88,502 | 500,461 |
Accrued bonus | 26,825 | 24,150 |
Expensed costs capitalized for tax | 15,978 | 13,914 |
Investments | 11,965 | 29,881 |
Stock based compensation | 55,436 | 50,065 |
Other | 5,940 | 20,819 |
Total deferred tax assets | 1,156,962 | 1,325,567 |
Deferred tax liabilities: | ||
Depreciation of property and equipment | (230,053) | (156,003) |
FCC license | (515,627) | (506,578) |
Other intangible assets | (101,650) | (105,471) |
Other | 2,049 | (7,273) |
Total deferred tax liabilities | (845,281) | (775,325) |
Net deferred tax assets before valuation allowance | 311,681 | 550,242 |
Valuation allowance | (66,229) | (52,883) |
Total net deferred tax asset | $ 245,452 | $ 497,359 |
Income Taxes - Summary of Income Tax Contingencies (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Changes in uncertain income tax positions | ||
Balance, beginning of year | $ 334,254 | $ 303,583 |
Increases in tax positions for prior years | 65,099 | 14,530 |
Increases in tax positions for current years | 14,594 | 16,141 |
Decreases in tax positions for prior years | (26,798) | 0 |
Balance, end of year | $ 387,149 | $ 334,254 |
Subsequent Events (Details) - USD ($) |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jan. 29, 2019 |
Oct. 09, 2018 |
Jul. 18, 2018 |
Apr. 26, 2018 |
Jan. 23, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Subsequent Event [Line Items] | ||||||||
Dividends declared per common share (in dollars per share) | $ 0.0121 | $ 0.011 | $ 0.011 | $ 0.011 | $ 0.0451 | $ 0.041 | $ 0.01 | |
Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock repurchase program, aggregate authorized amount | $ 12,000,000,000 | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends declared per common share (in dollars per share) | $ 0.0121 | |||||||
Subsequent Event | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock repurchase program, additional authorized amount | $ 2,000,000,000 | |||||||
Stock repurchase program, aggregate authorized amount | $ 14,000,000,000 |
Quarterly Financial Data -- Unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 1,495,908 | $ 1,467,383 | $ 1,432,299 | $ 1,375,102 | $ 1,403,898 | $ 1,379,596 | $ 1,347,569 | $ 1,294,066 | $ 5,770,692 | $ 5,425,129 | $ 5,017,220 |
Cost of services | (572,551) | (564,735) | (636,668) | (534,652) | (572,405) | (519,024) | (513,446) | (497,107) | |||
Income from operations | 459,173 | 482,557 | 361,627 | 423,591 | 396,706 | 433,965 | 416,353 | 393,840 | 1,726,948 | 1,640,864 | 1,432,129 |
Net income | $ 251,052 | $ 343,048 | $ 292,352 | $ 289,441 | $ (36,996) | $ 275,722 | $ 202,109 | $ 207,073 | $ 1,175,893 | $ 647,908 | $ 745,933 |
Net income (loss) per common share--basic (in dollars per share) | $ 0.06 | $ 0.08 | $ 0.07 | $ 0.06 | $ (0.01) | $ 0.06 | $ 0.04 | $ 0.04 | $ 0.26 | $ 0.14 | $ 0.15 |
Net income (loss) per common share--diluted (in dollars per share) | $ 0.06 | $ 0.07 | $ 0.06 | $ 0.06 | $ (0.01) | $ 0.06 | $ 0.04 | $ 0.04 | $ 0.26 | $ 0.14 | $ 0.15 |
Schedule II - Schedule of Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance January 1, | $ 9,500 | $ 8,658 | $ 6,118 |
Charged to Expenses (Benefit) | 50,824 | 55,715 | 55,941 |
Write-offs/ Payments/ Other | (53,706) | (54,873) | (53,401) |
Balance December 31, | 6,618 | 9,500 | 8,658 |
Deferred tax assets—valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance January 1, | 52,883 | 47,682 | 49,095 |
Charged to Expenses (Benefit) | 13,346 | 4,395 | (1,019) |
Write-offs/ Payments/ Other | 0 | 806 | (394) |
Balance December 31, | $ 66,229 | $ 52,883 | $ 47,682 |