SIRIUS XM HOLDINGS INC. [SIRI] Filings

10-Q 1 siri-20230930.htm 10-Q siri-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO ________

COMMISSION FILE NUMBER 001-34295

SIRIUS XM HOLDINGS INC.

(Exact name of registrant as specified in its charter)


Delaware									38-3916511
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

1221 Avenue of the Americas, 35th Floor, New York, NY

(Address of Principal Executive Offices)

10020

(Zip Code)

Registrant’s telephone number, including area code: (212) 584-5100

Former name, former address and former fiscal year, if changed since last report: Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common stock, $0.001 par value

SIRI

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


(Class)	(Outstanding as of October 27, 2023)
Common stock, $0.001 par value	3,838,939,821	shares

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q


Item No.	Description

	PART I - Financial Information

Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022	2
	Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3
	Consolidated Statements of Stockholders' Equity (Deficit) for the three and nine months ended September 30, 2023 and 2022	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	8
	Notes to the Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	49
Item 4.	Controls and Procedures	49

	PART II - Other Information

Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	50
	Signatures	52

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in millions, except per share data)	2023		2022		2023		2022
Revenue:
Subscriber revenue	$	1,729	$	1,734	$	5,146	$	5,166
Advertising revenue	460		457		1,278		1,292
Equipment revenue	49		50		142		148
Other revenue	33		39		99		114
Total revenue	2,271		2,280		6,665		6,720
Operating expenses:
Cost of services:
Revenue share and royalties	731		709		2,162		2,090
Programming and content	153		155		456		448
Customer service and billing	116		122		363		373
Transmission	54		51		153		157
Cost of equipment	3		4		10		9
Subscriber acquisition costs	87		86		270		267
Sales and marketing	237		281		680		838
Engineering, design and development	72		70		234		208
General and administrative	119		132		421		382
Depreciation and amortization	130		134		405		404
Impairment, restructuring and acquisition costs	5		69		56		70
Total operating expenses	1,707		1,813		5,210		5,246
Income from operations	564		467		1,455		1,474
Other (expense) income:
Interest expense	(106)		(107)		(319)		(314)

Other expense	(3)		(3)		—		(5)
Total other expense	(109)		(110)		(319)		(319)
Income before income taxes	455		357		1,136		1,155
Income tax expense	(92)		(110)		(230)		(307)
Net income	$	363	$	247	$	906	$	848
Foreign currency translation adjustment, net of tax	(6)		(21)		1		(23)
Total comprehensive income	$	357	$	226	$	907	$	825
Net income per common share:
Basic	$	0.09	$	0.06	$	0.23	$	0.22
Diluted	$	0.09	$	0.06	$	0.23	$	0.21
Weighted average common shares outstanding:
Basic	3,845		3,900		3,865		3,925
Diluted	3,865		3,968		3,884		4,001

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



(in millions, except per share data)	September 30, 2023		December 31, 2022
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	53	$	57
Receivables, net	659		655

Related party current assets	31		42
Prepaid expenses and other current assets	298		284
Total current assets	1,041		1,038
Property and equipment, net	1,715		1,499
Intangible assets, net	2,941		3,050
Goodwill	3,249		3,249
Related party long-term assets	493		488
Deferred tax assets	147		147
Operating lease right-of-use assets	283		315
Other long-term assets	260		236
Total assets	$	10,129	$	10,022
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	1,267	$	1,248
Accrued interest	73		165
Current portion of deferred revenue	1,248		1,322
Current maturities of debt	525		196
Operating lease current liabilities	45		50

Total current liabilities	3,158		2,981
Long-term deferred revenue	73		81
Long-term debt	8,823		9,256

Deferred tax liabilities	479		565
Operating lease liabilities	292		320
Other long-term liabilities	197		170
Total liabilities	13,022		13,373
Commitments and contingencies (Note 15)
Stockholders’ equity (deficit):
Common stock, par value $0.001 per share; 9,000 shares authorized; 3,840 and 3,891 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	4		4
Accumulated other comprehensive loss, net of tax	(3)		(4)


Accumulated deficit	(2,894)		(3,351)
Total stockholders’ equity (deficit)	(2,893)		(3,351)
Total liabilities and stockholders’ equity (deficit)	$	10,129	$	10,022

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)


For the Nine Months Ended September 30, 2023
	Common Stock			Accumulated Other Comprehensive (Loss) Income		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity (Deficit)
(in millions)	Shares	Amount						Shares	Amount
Balance at December 31, 2022	3,891	$	4	$	(4)	$	—	—	$	—	$	(3,351)	$	(3,351)

Comprehensive income, net of tax	—	—		1		—		—	—		906		907
Share-based payment expense	—	—		—		147		—	—		—		147
Exercise of stock options and vesting of restricted stock units	18	—		—		4		—	—		—		4
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(50)		—	—		—		(50)
Capital contribution from Liberty Media related to Tax Sharing Agreement	—	—		—		—		—	—		5		5
Cash dividends paid on common stock, $0.0726 per share	—	—		—		(101)		—	—		(180)		(281)

Common stock repurchased	—	—		—		—		69	(274)		—		(274)
Common stock retired	(69)	—		—		—		(69)	274		(274)		—
Balance at September 30, 2023	3,840	$	4	$	(3)	$	—	—	$	—	$	(2,894)	$	(2,893)

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)


For the Three Months Ended September 30, 2023
	Common Stock			Accumulated Other Comprehensive Income (Loss)		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity (Deficit)
(in millions)	Shares	Amount						Shares	Amount
Balance at June 30, 2023	3,845	$	4	$	3	$	—	1	$	(3)	$	(3,115)	$	(3,111)

Comprehensive income, net of tax	—	—		(6)		—		—	—		363		357
Share-based payment expense	—	—		—		53		—	—		—		53
Exercise of stock options and vesting of restricted stock units	12	—		—		4		—	—		—		4
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(32)		—	—		—		(32)
Capital contribution from Liberty Media related to Tax Sharing Agreement	—	—		—		—		—	—		1		1
Cash dividends paid on common stock, $0.0242 per share	—	—		—		(25)		—	—		(68)		(93)

Common stock repurchased	—	—		—		—		16	(72)		—		(72)
Common stock retired	(17)	—		—		—		(17)	75		(75)		—
Balance at September 30, 2023	3,840	$	4	$	(3)	$	—	—	$	—	$	(2,894)	$	(2,893)

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)


For the Nine Months Ended September 30, 2022
	Common Stock			Accumulated Other Comprehensive Income (Loss)		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity (Deficit)
(in millions)	Shares	Amount						Shares	Amount
Balance at December 31, 2021	3,968	$	4	$	15	$	—	1	$	(8)	$	(2,636)	$	(2,625)
Cumulative effect of change in accounting principles	—	—		—		—		—	—		(14)		(14)
Comprehensive (loss) income, net of tax	—	—		(23)		—		—	—		848		825
Share-based payment expense	—	—		—		157		—	—		—		157
Exercise of stock options and vesting of restricted stock units	23	—		—		4		—	—		—		4
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(102)		—	—		—		(102)
Capital contribution to Liberty Media related to Tax Sharing Agreement	—	—		—		—		—	—		(22)		(22)
Cash dividends paid on common stock, $0.315885 per share	—	—		—		(59)		—	—		(1,186)		(1,245)

Common stock repurchased	—	—		—		—		95	(594)		—		(594)
Common stock retired	(95)	—		—		—		(95)	599		(599)		—
Balance at September 30, 2022	3,896	$	4	$	(8)	$	—	1	$	(3)	$	(3,609)	$	(3,616)

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)


For the Three Months Ended September 30, 2022
	Common Stock			Accumulated Other Comprehensive Income (Loss)		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity (Deficit)
(in millions)	Shares	Amount						Shares	Amount
Balance at June 30, 2022	3,909	$	4	$	13	$	—	1	$	(10)	$	(3,586)	$	(3,579)

Comprehensive (loss) income, net of tax	—	—		(21)		—		—	—		247		226
Share-based payment expense	—	—		—		55		—	—		—		55
Exercise of stock options and vesting of restricted stock units	16	—		—		4		—	—		—		4
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(63)		—	—		—		(63)
Capital contribution to Liberty Media related to Tax Sharing Agreement	—	—		—		—		—	—		3		3
Cash dividends paid on common stock, $0.0219615 per share	—	—		—		4		—	—		(90)		(86)

Common stock repurchased	—	—		—		—		29	(176)		—		(176)
Common stock retired	(29)	—		—		—		(29)	183		(183)		—
Balance at September 30, 2022	3,896	$	4	$	(8)	$	—	1	$	(3)	$	(3,609)	$	(3,616)

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)


	For the Nine Months Ended September 30,
(in millions)	2023		2022
Cash flows from operating activities:
Net income	$	906	$	848
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	405		404
Non-cash impairment and restructuring costs	22		68
Non-cash interest expense, net of amortization of premium	11		12

Provision for doubtful accounts	45		43


Loss on unconsolidated entity investments, net	7		—



(Gain) loss on other investments	(4)		11
Share-based payment expense	135		143
Deferred income tax (benefit) expense	(85)		132
Amortization of right-of-use assets	35		37
Changes in operating assets and liabilities:
Receivables	(50)		22

Related party, net	17		(30)
Prepaid expenses and other current assets	(14)		(57)
Other long-term assets	—		(3)
Accounts payable and accrued expenses	40		(72)
Accrued interest	(92)		(101)
Deferred revenue	(82)		(87)
Operating lease liabilities	(43)		(48)
Other long-term liabilities	26		(22)
Net cash provided by operating activities	1,279		1,300
Cash flows from investing activities:
Additions to property and equipment	(520)		(279)

(Purchase) sale of other investments	(1)		1
Acquisition of business, net of cash acquired	—		(136)

Investments in related parties and other equity investees	(33)		(1)

Net cash used in investing activities	(554)		(415)
Cash flows from financing activities:
Proceeds from exercise of stock options	4		4
Taxes paid from net share settlements for stock-based compensation	(50)		(102)
Revolving credit facility, net	55		421
Proceeds from long-term borrowings, net of costs	—		499
Principal payments of long-term borrowings	(180)		(3)

Payment of contingent consideration for business acquisition	(3)		(3)
Distribution to parent related to Tax Sharing Agreement	—		(8)
Common stock repurchased and retired	(274)		(599)
Dividends paid	(281)		(1,245)
Net cash used in financing activities	(729)		(1,036)
Net decrease in cash, cash equivalents and restricted cash	(4)		(151)
Cash, cash equivalents and restricted cash at beginning of period (1)	65		199
Cash, cash equivalents and restricted cash at end of period (1)	$	61	$	48

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(UNAUDITED)


	For the Nine Months Ended September 30,
(in millions)	2023		2022
Supplemental Disclosure of Cash and Non-Cash Flow Information
Cash paid during the period for:
Interest, net of amounts capitalized	$	399	$	400
Income taxes paid	$	251	$	215
Non-cash investing and financing activities:
Capital lease obligations incurred to acquire assets	$	7	$	7


Accumulated other comprehensive income (loss), net of tax	$	1	$	(23)
Capital contribution from (to) Liberty Media pursuant to Tax Sharing Agreement	$	5	$	(14)

(1)The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet. The restricted cash balances are primarily due to letters of credit which have been issued to the landlords of leased office space. The terms of the letters of credit primarily extend beyond one year.


(in millions)	September 30, 2023		December 31, 2022		September 30, 2022		December 31, 2021
Cash and cash equivalents	$	53	$	57	$	39	$	191
Restricted cash included in Other long-term assets	8		8		9		8
Total cash, cash equivalents and restricted cash at end of period	$	61	$	65	$	48	$	199

See accompanying notes to the unaudited consolidated financial statements.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

(1)Business & Basis of Presentation

This Quarterly Report on Form 10-Q presents information for Sirius XM Holdings Inc. and its subsidiaries (collectively “Holdings”). The terms “Holdings,” “we,” “us,” “our,” and “our company” as used herein, and unless otherwise stated or indicated by context, refer to Sirius XM Holdings Inc. and its subsidiaries. “Sirius XM” refers to our wholly owned subsidiary Sirius XM Radio Inc. and its subsidiaries. “Pandora” refers to Sirius XM's wholly owned subsidiary Pandora Media, LLC and its subsidiaries. Holdings has no operations independent of Sirius XM and Pandora.

Business

We operate two complementary audio entertainment businesses - one of which we refer to as “SiriusXM” and the second of which we refer to as “Pandora and Off-platform”.

SiriusXM

Our SiriusXM business features music, sports, entertainment, comedy, talk, news, traffic and weather channels and other content, as well as podcasts and infotainment services, in the United States on a subscription fee basis. SiriusXM packages include live, curated and certain exclusive and on demand programming. The SiriusXM service is distributed through our two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment. Satellite radios are primarily distributed through automakers, retailers and our website. Our Sirius XM service is also available through our in-car user interface, which we call “360L,” that combines our satellite and streaming services into a single, cohesive in-vehicle entertainment experience.

The primary source of revenue from our SiriusXM business is subscription fees, with most of our customers subscribing to monthly, quarterly, semi-annual or annual plans. We also derive revenue from advertising on select non-music channels, which is sold under the SXM Media brand, direct sales of our satellite radios and accessories, and other ancillary services. As of September 30, 2023, our SiriusXM business had approximately 34.0 million subscribers.

In addition to our audio entertainment businesses, we provide connected vehicle services to several automakers. These services are designed to enhance the safety, security and driving experience of consumers. We also offer a suite of data services that includes graphical weather and fuel prices, a traffic information service, and real-time weather services in boats and airplanes.

SiriusXM also holds a 70% equity interest and 33% voting interest in Sirius XM Canada Holdings Inc. (“Sirius XM Canada”). Sirius XM Canada's subscribers are not included in our subscriber count or subscriber-based operating metrics.

Pandora and Off-platform

Our Pandora and Off-platform business operates a music and podcast streaming discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through computers, tablets, mobile devices, vehicle speakers or connected devices. Pandora enables listeners to create personalized stations and playlists, discover new content, hear artist- and expert-curated playlists, podcasts and select SiriusXM content as well as search and play songs and albums on-demand. Pandora is available as (1) an ad-supported radio service, (2) a radio subscription service (Pandora Plus) and (3) an on-demand subscription service (Pandora Premium). As of September 30, 2023, Pandora had approximately 6.1 million subscribers.

The majority of revenue from Pandora is generated from advertising on our Pandora ad-supported radio service which is sold under the SXM Media brand. We also derive subscription revenue from our Pandora Plus and Pandora Premium subscribers.

We also sell advertising on other audio platforms and in widely distributed podcasts, which we consider to be off-platform services. We have an arrangement with SoundCloud Holdings, LLC (“SoundCloud”) to be its exclusive ad sales representative in the US and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms. We also have arrangements to serve as the ad sales representative for certain podcasts. In

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

addition, through AdsWizz Inc., we provide a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.

Liberty Media

As of September 30, 2023, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, 83.5% 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. Refer to Note 11 for more information regarding related parties.

Basis of Presentation

The accompanying unaudited consolidated financial statements of Holdings have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany transactions have been eliminated in consolidation. Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation.

In the opinion of our management, all normal recurring adjustments necessary for a fair presentation of our unaudited consolidated financial statements as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 have been made.

Interim results are not necessarily indicative of the results that may be expected for a full year. This Quarterly Report on Form 10-Q should be read together with our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 2, 2023.

Public companies are required to disclose certain information about their reportable operating segments. Operating segments are defined as significant components of an enterprise for which separate financial information is available and is evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We have determined that we have two reportable segments as our chief operating decision maker, our Chief Executive Officer, assesses performance and allocates resources based on the financial results of these segments. Refer to Note 17 for information related to our segments.

We have evaluated events subsequent to the balance sheet date and prior to the filing of this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 and have determined that no events have occurred that would require adjustment to our unaudited consolidated financial statements. For a discussion of subsequent events that do not require adjustment to our unaudited consolidated financial statements refer to Note 18.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Estimates, by their nature, are based on judgment and available information. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the accompanying unaudited consolidated financial statements include asset impairment, depreciable lives of our satellites, share-based payment expense and income taxes.

(2)Summary of Significant Accounting Policies

Fair Value Measurements

For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are based on unadjusted quoted prices in active markets for identical instruments. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. As of September 30, 2023 and December 31, 2022, the carrying amounts of cash and cash equivalents, receivables and accounts payable approximated fair value due to the short-term nature of these instruments.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

Our liabilities measured at fair value were as follows:


	September 30, 2023						December 31, 2022
	Level 1	Level 2		Level 3	Total Fair Value		Level 1	Level 2		Level 3	Total Fair Value
Liabilities:
Debt (a)	—	$	8,064	—	$	8,064	—	$	8,362	—	$	8,362

(a)The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 12 for information related to the carrying value of our debt as of September 30, 2023 and December 31, 2022.

(3)Acquisitions

On May 20, 2022, we completed an acquisition for total cash consideration of $93. We recognized goodwill of $69, indefinite-lived intangible assets of $1 and other assets of $23. The other assets represent acquired content which will be amortized over its estimated useful life to Programming and content in our unaudited consolidated statements of comprehensive income.

On January 12, 2022, we completed an acquisition for total cash consideration of $44. We recognized goodwill of $29, other definite-lived intangible assets of $19 and liabilities of $4.

There were no acquisition related costs recognized for the three and nine months ended September 30, 2023. Acquisition related costs for the three and nine months ended September 30, 2022 were $1 and $3, respectively.

(4)Restructuring Costs

During the three and nine months ended September 30, 2023, restructuring costs were $4 and $39, respectively. In 2023, we initiated measures to pursue greater efficiency and to realign our business and focus on strategic priorities. As part of these measures, we reduced the size of our workforce by approximately 475 roles, or 8%. We recorded a charge of $31 primarily related to severance and other related costs. In addition, we vacated one of our leased locations and recorded an impairment of $5 to reduce the carrying value of the related right of use asset to its estimated fair value. Additionally, we accrued expenses of $2 for which we will not recognize any future economic benefits. The restructuring and related impairment charges were recorded to Impairment, restructuring and acquisition costs in our unaudited consolidated statements of comprehensive income.

During the three and nine months ended September 30, 2022, we evaluated our office space needs, and, based on this, we vacated certain office spaces and recorded an impairment of $16 to reduce the carrying value of the related right of use assets to their estimated fair values. Additionally, we wrote off fixed assets of $4 in connection with furniture and equipment located at the impaired office spaces. Separately, we performed an analysis surrounding initiatives that we are no longer pursuing and recorded an impairment of $43 associated with terminated software projects and an impairment of $5 related to severance. The total charge of $68 was recorded to Impairment, restructuring and acquisition costs in our unaudited consolidated statements of comprehensive income for the three and nine months ended September 30, 2022.

(5)Earnings per Share

Basic net income per common share is calculated by dividing the income available to common stockholders by the weighted average common shares outstanding during each reporting period. Diluted net income per common share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options, restricted stock units and convertible debt) were exercised or converted into common stock, calculated using the treasury stock method. We had no participating securities during the three and nine months ended September 30, 2023 and 2022.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

Common stock equivalents of 157 and 93 for the three months ended September 30, 2023 and 2022, respectively, and 155 and 86 for the nine months ended September 30, 2023 and 2022, respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive.


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator:
Net Income available to common stockholders for basic net income per common share	$	363	$	247	$	906	$	848
Effect of interest on assumed conversions of convertible notes, net of tax	—		1		1		3
Net Income available to common stockholders for dilutive net income per common share	$	363	$	248	$	907	$	851
Denominator:
Weighted average common shares outstanding for basic net income per common share	3,845		3,900		3,865		3,925
Weighted average impact of assumed convertible notes	3		31		3		31
Weighted average impact of dilutive equity instruments	17		37		16		45
Weighted average shares for diluted net income per common share	3,865		3,968		3,884		4,001
Net income per common share:
Basic	$	0.09	$	0.06	$	0.23	$	0.22
Diluted	$	0.09	$	0.06	$	0.23	$	0.21

(6)Receivables, net

Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables. We do not have any customer receivables that individually represent more than ten percent of our receivables.

Customer accounts receivable, net, includes receivables from our subscribers and advertising customers, including advertising agencies and other customers, and is stated at amounts due, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is based upon our assessment of various factors. We consider historical experience, the age of the receivable balances, current economic conditions, industry experience and other factors that may affect the counterparty’s ability to pay. Bad debt expense is included in Customer service and billing expense in our unaudited consolidated statements of comprehensive income.

Receivables from distributors primarily include billed and unbilled amounts due from automakers 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 automakers or other third parties and do not expect issues in the foreseeable future.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

Receivables, net, consists of the following:


	September 30, 2023		December 31, 2022
Gross customer accounts receivable	$	593	$	585
Allowance for doubtful accounts	(14)		(11)
Customer accounts receivable, net	$	579	$	574
Receivables from distributors	52		53
Other receivables	28		28
Total receivables, net	$	659	$	655

(7)Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Our annual impairment assessment of our two reporting units is performed as of the fourth quarter of each year, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ASC 350, Intangibles - Goodwill and Other, states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Our Sirius XM reporting unit, which has an allocated goodwill balance of $2,290, had a negative carrying amount as of September 30, 2023.

As of September 30, 2023, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the three and nine months ended September 30, 2023 and 2022. As of September 30, 2023, the cumulative balance of goodwill impairments recorded was $5,722, of which $4,766 was recognized during the year ended December 31, 2008 and is included in the carrying amount of the goodwill allocated to our Sirius XM reporting unit and $956 was recognized during the year ended December 31, 2020 and is included in the carrying amount of the goodwill allocated to our Pandora and Off-platform reporting unit.

As of each of September 30, 2023 and December 31, 2022, the carrying amount of goodwill for our Sirius XM and Pandora and Off-platform reporting units was $2,290 and $959, respectively.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

(8)Intangible Assets

Our intangible assets include the following:


		September 30, 2023						December 31, 2022
	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Indefinite life intangible assets:
FCC licenses	Indefinite	$	2,084	$	—	$	2,084	$	2,084	$	—	$	2,084
Trademarks	Indefinite	250		—		250		250		—		250
Definite life intangible assets:
OEM relationships	15 years	220		(145)		75		220		(135)		85
Licensing agreements	12 years	3		(3)		—		45		(45)		—
Software and technology	7 years	29		(22)		7		31		(21)		10
Due to Acquisitions recorded to Pandora and Off-platform Reporting Unit:
Indefinite life intangible assets:
Trademarks	Indefinite	312		—		312		312		—		312
Definite life intangible assets:
Customer relationships	8 years	442		(266)		176		442		(225)		217
Software and technology	5 years	391		(354)		37		391		(299)		92
Total intangible assets		$	3,731	$	(790)	$	2,941	$	3,775	$	(725)	$	3,050

Indefinite Life Intangible Assets

We have identified our FCC licenses and XM and Pandora 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.

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. As of September 30, 2023, there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three and nine months ended September 30, 2023 and 2022.

Definite Life Intangible Assets

Amortization expense for all definite life intangible assets was $36 and $39 for the three months ended September 30, 2023 and 2022, respectively, and $109 and $117 for the nine months ended September 30, 2023 and 2022, respectively. There were retirements of definite lived intangible assets of $44 and we recognized a related impairment loss of $1 during nine months ended September 30, 2023. There were no retirements or impairments of definite lived intangible assets during the three and nine months ended September 30, 2022.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

The expected amortization expense for each of the fiscal years 2023 through 2027 and for periods thereafter is as follows:


Years ending December 31,	Amount
2023 (remaining)	$	36
2024	77
2025	71
2026	71
2027	25
Thereafter	15
Total definite life intangible assets, net	$	295

(9)Property and Equipment

Property and equipment, net, consists of the following:


	September 30, 2023		December 31, 2022
Satellite system	$	1,598	$	1,841
Terrestrial repeater network	119		118
Leasehold improvements	107		100
Broadcast studio equipment	141		133
Capitalized software and hardware	1,850		1,821
Satellite telemetry, tracking and control facilities	82		76
Furniture, fixtures, equipment and other	109		89
Land	32		32
Building	73		70
Construction in progress	738		313
Total property and equipment	4,849		4,593
Accumulated depreciation	(3,134)		(3,094)
Property and equipment, net	$	1,715	$	1,499

Construction in progress consists of the following:


	September 30, 2023		December 31, 2022
Satellite system	$	449	$	212
Terrestrial repeater network	17		10
Capitalized software and hardware	249		56
Other	23		35
Construction in progress	$	738	$	313

Depreciation and amortization expense on property and equipment was $94 and $95 for the three months ended September 30, 2023 and 2022, respectively, and $296 and $287 for the nine months ended September 30, 2023 and 2022, respectively. During the three and nine months ended September 30, 2023, we retired property and equipment of $2 and $271, respectively, and recorded related impairment charges of $1 and $14, respectively, primarily related to terminated software projects. During the three and nine months ended September 30, 2022, we wrote off furniture and equipment in connection with impaired office space leases and we disposed of assets associated with software development initiatives that we are no longer pursuing. Refer to Note 4 for more information. During the three and nine months ended September 30, 2022, we retired property and equipment of $59 and $81, respectively.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites. Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life. Capitalized interest costs were $4 and $1 for the three months ended September 30, 2023 and 2022, respectively, and $10 and $3 for the nine months ended September 30, 2023 and 2022, respectively, which related to the construction of our SXM-9, SXM-10, SXM-11 and SXM-12 satellites. We also capitalize a portion of share-based compensation related to employee time for capitalized software projects. Capitalized share-based compensation costs were $5 and $4 for the three months ended September 30, 2023 and 2022, respectively, and $13 for each of the nine months ended September 30, 2023 and 2022.

Satellites

As of September 30, 2023, we operated a fleet of five satellites. 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 license. The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred. The chart below provides certain information on our satellites as of September 30, 2023:


Satellite Description	Year Delivered	Estimated End of Depreciable Life	FCC License Expiration Year

SIRIUS FM-5	2009	2024	2025
SIRIUS FM-6	2013	2028	2030
XM-3	2005	2020	2026

XM-5	2010	2025	2026
SXM-8	2021	2036	2029

During the three months ended March 31, 2023, we removed our XM-4 satellite from service and we are in the process of de-orbiting the satellite, which we expect to be completed by the end of 2023. Our XM-3 satellite remains available as an in-orbit spare.

(10)Leases

We have operating and finance leases for offices, terrestrial repeaters, data centers and certain equipment. Our leases have remaining lease terms of less than 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. We elected the practical expedient to account for the lease and non-lease components as a single component. Additionally, we elected the practical expedient to not recognize right-of-use assets or lease liabilities for short-term leases, which are those leases with a term of twelve months or less at the lease commencement date.

The components of lease expense were as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	15	$	16	$	46	$	46
Finance lease cost	2		—		3		—
Sublease income	(1)		(1)		(2)		(2)
Total lease cost	$	16	$	15	$	47	$	44

During the nine months ended September 30, 2023, we ceased using one of our leased locations and recorded an impairment charge of $5 to write down the carrying value of the right-of-use asset to its estimated fair value. Refer to Note 4 for additional information.

(11)Related Party Transactions

In the normal course of business, we enter into transactions with related parties such as Sirius XM Canada and SoundCloud.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

Liberty Media

As of September 30, 2023, Liberty Media beneficially owned, directly and indirectly, 83.5% of the outstanding shares of our common stock. Liberty Media has three of its 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.

On February 1, 2021, Holdings entered into a tax sharing agreement with Liberty Media governing the allocation of consolidated U.S. income tax liabilities and setting forth agreements with respect to other tax matters. The tax sharing agreement was negotiated and approved by a special committee of Holdings’ board of directors, all of whom are independent of Liberty Media. Refer to Note 16 for more information regarding the tax sharing agreement.

On September 22, 2023, the special committee of independent directors of the board of Holdings (the “Special Committee”) received a non-binding proposal from Liberty Media regarding a potential transaction involving Holdings. The potential transaction would consist of the separation of the assets and liabilities attributed to the Liberty SiriusXM tracking stock group from Liberty Media through the split-off of a newly formed company (“Newco”) and the subsequent combination of Newco and Holdings. As a result of the potential transaction, the holders of Liberty SiriusXM tracking stock and Holdings common stock would all hold one class of common stock of the combined company (the “Proposal”). The Special Committee is evaluating the Proposal. There can be no assurance that the Proposal, or any other transaction, will be completed or of the terms and conditions of any such transaction.

Sirius XM Canada

Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada, a privately held corporation. We own 591 shares of preferred stock of Sirius XM Canada, which has a liquidation preference of one Canadian dollar per share.

Sirius XM Canada is accounted for as an equity method investment, and its results are not consolidated in our unaudited consolidated financial statements. Sirius XM Canada does not meet the requirements for consolidation as we do not have the ability to direct the most significant activities that impact Sirius XM Canada's economic performance.

On March 15, 2022, Sirius XM and Sirius XM Canada entered into an amended and restated services and distribution agreement. Pursuant to the amended and restated services and distribution agreement, the fee payable by Sirius XM Canada to Sirius XM was modified from a fixed percentage of revenue to a variable fee, based on a target operating profit for Sirius XM Canada. Such variable fee is expected to be evaluated annually based on comparable companies. In accordance with the amended and restated services and distribution agreement, the fee is payable on a monthly basis, in arrears, beginning January 1, 2022.

Our related party long-term assets as of September 30, 2023 and December 31, 2022 included the carrying value of our investment balance in Sirius XM Canada of $419 and $412, respectively, and, as of each of September 30, 2023 and December 31, 2022, also included $8, for the long-term value of the outstanding loan to Sirius XM Canada.

Sirius XM Canada paid gross dividends to us of less than $1 during the three months ended September 30, 2023, and $1 and less than $1 during the nine months ended September 30, 2023 and 2022, respectively. No dividends were paid during the three months ended September 30, 2022. Dividends are first recorded as a reduction to our investment balance in Sirius XM Canada to the extent a balance exists and then as Other (expense) income for any remaining portion.

We recorded revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income of $27 and $29 during the three months ended September 30, 2023 and 2022, respectively, and $78 and $84 during the nine months ended September 30, 2023 and 2022, respectively.

SoundCloud

We have an investment in SoundCloud which is accounted for as an equity method investment and recorded in Related party long-term assets in our unaudited consolidated balance sheets. Sirius XM has appointed two individuals to serve on SoundCloud's ten-member board of managers. Sirius XM's share of SoundCloud's net income (loss) was less than $1 and $(1) for the three months ended September 30, 2023 and 2022, respectively, and $(2) and $(4) for the nine months ended

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

September 30, 2023 and 2022, respectively, which was recorded in Other (expense) income in our unaudited consolidated statements of comprehensive income.

In addition to our investment in SoundCloud, Pandora has an agreement with SoundCloud to be its exclusive ad sales representative in the US and certain European countries. Through this arrangement, Pandora offers advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms. We recorded revenue share expense related to this agreement of $14 and $13 for the three months ended September 30, 2023 and 2022, respectively, and $39 and $40 for the nine months ended September 30, 2023 and 2022, respectively. We also had related party liabilities of $19 as of each of September 30, 2023 and December 31, 2022 related to this agreement.

(12)Debt

Our debt as of September 30, 2023 and December 31, 2022 consisted of the following:

Principal Amount at

Carrying value(a) at

Issuer / Borrower

Issued

Debt

Maturity Date

Interest
Payable

September 30, 2023

December 31, 2022

Pandora
(c) (d)

June 2018

1.75% Convertible Senior Notes

December 1, 2023

semi-annually on June 1 and December 1

193

Sirius XM
(b) (f)

April 2022

Incremental Term Loan

April 11, 2024

variable fee paid monthly

500

Sirius XM
(b)

August 2021

3.125% Senior Notes

September 1, 2026

semi-annually on March 1 and September 1

1,000

993

992

Sirius XM
(b)

July 2017

5.00% Senior Notes

August 1, 2027

semi-annually on February 1 and August 1

1,500

1,494

1,492

Sirius XM
(b)

June 2021

4.00% Senior Notes

July 15, 2028

semi-annually on January 15 and July 15

2,000

1,984

1,982

Sirius XM
(b)

June 2019

5.500% Senior Notes

July 1, 2029

semi-annually on January 1 and July 1

1,250

1,241

1,240

Sirius XM
(b)

June 2020

4.125% Senior Notes

July 1, 2030

semi-annually on January 1 and July 1

1,500

1,488

1,487

Sirius XM
(b)

August 2021

3.875% Senior Notes

September 1, 2031

semi-annually on March 1 and September 1

1,500

1,486

1,485

Sirius XM
(e)

December 2012

Senior Secured Revolving Credit Facility (the "Credit Facility")

August 31, 2026

variable fee paid quarterly

135

Sirius XM

Various

Finance leases

Various

n/a

Total Debt

9,358

9,463

Less: total current maturities

525

196

Less: total deferred financing costs

Total long-term debt

8,823

9,256

(a)The carrying value of the obligations is net of any remaining unamortized original issue discount.

(b)All material domestic subsidiaries, including Pandora and its subsidiaries, that guarantee the Credit Facility have guaranteed the Incremental Term Loan and these notes.

(c)Holdings has unconditionally guaranteed all of the payment obligations of Pandora under these notes.

(d)We acquired $193 in principal amount of the 1.75% Convertible Senior Notes due 2023 as part of the acquisition of Pandora Media, Inc. in 2019. During the nine months ended September 30, 2023, certain investors exercised their right to require a Special Repurchase, as defined in the indenture governing such notes, and Pandora repurchased $173 in outstanding principal amount of the 1.75% Convertible Senior Notes due 2023 with cash for an aggregate purchase price equal to 100% of the principal amount of the notes repurchased plus accrued and unpaid interest to the date of repurchase. On or after July 1, 2023 and prior to the close of business on November 29, 2023, the 1.75% Convertible

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

Senior Notes due 2023 are convertible into Holdings’ common stock at the holders’ option at the applicable conversion rate in effect on the relevant conversion date.

(e)In August 2021, Sirius XM entered into an amendment to extend the maturity of the $1,750 Credit Facility to August 31, 2026. Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries, including Pandora and its subsidiaries, and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries. From and after July 1, 2023, Sirius XM borrowings are based on the Secured Overnight Financing Rate plus an applicable rate based on its debt to operating cash flow ratio. Sirius XM is also required to pay a variable fee on the average daily unused portion of the Credit Facility which is payable on a quarterly basis. The variable rate for the unused portion of the Credit Facility was 0.25% per annum as of September 30, 2023. All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our unaudited consolidated balance sheets due to the long-term maturity of this debt.

(f)In April 2022, Sirius XM entered into an amendment to the Credit Facility to incorporate an Incremental Term Loan borrowing of $500 which matures on April 11, 2024. Interest on the Incremental Term Loan borrowing is based on SOFR plus an applicable rate.

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.

The indenture governing the Pandora 2023 Notes (as defined below) contains covenants that limit Pandora’s ability to merge or consolidate and provides for customary events of default, which include nonpayment of principal or interest, breach of covenants, payment defaults or acceleration of other indebtedness and certain events of bankruptcy.

At September 30, 2023 and December 31, 2022, we were in compliance with our debt covenants.

Pandora Convertible Notes

Pandora's 1.75% Convertible Senior Notes due 2023 (the “Pandora 2023 Notes”) are unsecured, senior obligations of Pandora. Holdings has guaranteed the payment and performance obligations of Pandora under the Pandora 2023 Notes and the indenture governing the Pandora 2023 Notes.

The Pandora 2023 Notes will mature on December 1, 2023, unless earlier repurchased or redeemed by Pandora or converted in accordance with their terms. As of September 30, 2023, the conversion rate applicable to the Pandora 2023 Notes was 165.4277 shares of Holdings' common stock per one thousand principal amount of the Pandora 2023 Notes.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in millions, except per share amounts)

(13)Stockholders’ Equity

Common Stock, par value $0.001 per share

We are authorized to issue up to 9,000 shares of common stock. There were 3,840 and 3,891 shares of common stock issued and outstanding on September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, there were 220 shares of common stock reserved for issuance in connection with outstanding stock-based awards to members of our board of directors, employees and third parties.

Quarterly Dividends

During the nine months ended September 30, 2023, our board of directors declared and paid the following dividend:


Declaration Date	Dividend Per Share		Record Date	Total Amount		Payment Date
January 25, 2023	$	0.0242	February 9, 2023	$	94	February 24, 2023
April 19, 2023	$	0.0242	May 5, 2023	$	94	May 24, 2023
July 26, 2023	$	0.0242	August 8, 2023	$	93	August 30, 2023

Stock Repurchase Program

As of September 30, 2023, our board of directors had approved for repurchase an aggregate of $18,000 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 September 30, 2023, our cumulative repurchases since December 2012 under our stock repurchase program totaled 3,731 shares for $16,834, and $1,166 remained available for future share repurchases under our stock repurchase program.

The following table summarizes our total share repurchase activity for the nine months ended:


	September 30, 2023			September 30, 2022
Share Repurchase Type	Shares	Amount		Shares	Amount
Open Market Repurchases	69	$	274	95	$	594

Preferred Stock, par value $0.001 per share

We are authorized to issue up to 50 shares of undesignated preferred stock with a liquidation preference of $0.001 per share. There were no shares of preferred stock issued or outstanding as of September 30, 2023 and December 31, 2022.

(14)Benefit Plans

We recognized share-based payment expense of $48 and $50 for the three months ended September 30, 2023 and 2022, respectively, and $135 and $143 for the nine months ended September 30, 2023 and 2022, respectively.

2015 Long-Term Stock Incentive Plan

In May 2015, our stockholders approved the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (the “2015 Plan”). Employees, consultants and members of our board of directors are eligible to receive awards under the 2015 Plan. The 2015 Plan provides for the grant of stock options, restricted stock awards, restricted stock units and other stock-based awards that the Compensation Committee of our Board of Directors deems appropriate. Stock-based awards granted under the 2015 Plan are generally subject to a graded vesting requirement, which is generally three to four years from the grant date. Stock options generally expire ten years from the date of grant. Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the third anniversary of the grant date. Each restricted stock unit entitles the holder to