SIRIUS XM HOLDINGS INC. [SIRI] Filings

10-Q 1 siri-20240630.htm 10-Q siri-20240630

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 JUNE 30, 2024


☐						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 July 30, 2024)
Common stock, $0.001 par value	3,850,363,154	shares

Table of Contents

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 six months ended J une 3 0 , 2024 and 2023	2
	Consolidated Balance Sheets as of June 3 0 , 2024 and December 31, 2023	3
	Consolidated Statements of Stockholders' Equity (Deficit) for the three and six months ended June 3 0 , 2024 and 2023	4
	Consolidated Statements of Cash Flows for the six months ended June 30 , 2024 and 2023	8
	Notes to the Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	54
Item 4.	Controls and Procedures	54

	PART II - Other Information

Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	55
	Signatures	57

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


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(in millions, except per share data)	2024		2023		2024		2023
Revenue:
Subscriber revenue	$	1,658	$	1,725	$	3,338	$	3,417
Advertising revenue	443		445		845		819
Equipment revenue	47		47		97		93
Other revenue	30		33		60		65
Total revenue	2,178		2,250		4,340		4,394
Operating expenses:
Cost of services:
Revenue share and royalties	708		732		1,411		1,432
Programming and content	148		153		305		303
Customer service and billing	108		123		224		246
Transmission	57		50		115		99
Cost of equipment	2		3		5		7
Subscriber acquisition costs	92		93		182		183
Sales and marketing	228		220		457		443
Engineering, design and development	71		83		157		162
General and administrative	108		157		223		303
Depreciation and amortization	133		139		273		275
Impairment, restructuring and acquisition costs	18		18		46		50
Total operating expenses	1,673		1,771		3,398		3,503
Income from operations	505		479		942		891
Other (expense) income:
Interest expense	(102)		(107)		(206)		(213)

Other income	2		—		14		3
Total other expense	(100)		(107)		(192)		(210)
Income before income taxes	405		372		750		681
Income tax expense	(89)		(62)		(168)		(138)
Net income	$	316	$	310	$	582	$	543
Foreign currency translation adjustment, net of tax	(3)		7		(10)		7
Total comprehensive income	$	313	$	317	$	572	$	550
Net income per common share:
Basic	$	0.08	$	0.08	$	0.15	$	0.14
Diluted	$	0.08	$	0.08	$	0.15	$	0.14
Weighted average common shares outstanding:
Basic	3,848		3,861		3,846		3,875
Diluted	3,855		3,873		3,858		3,892

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)	June 30, 2024		December 31, 2023
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	100	$	216
Receivables, net	644		709

Related party current assets	32		36
Prepaid expenses and other current assets	324		310
Total current assets	1,100		1,271
Property and equipment, net	1,874		1,754
Intangible assets, net	2,864		2,905
Goodwill	3,249		3,249
Equity method investments	1,426		526
Deferred tax assets	155		155
Operating lease right-of-use assets	283		279
Other long-term assets	234		235
Total assets	$	11,185	$	10,374
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	1,118	$	1,306
Accrued interest	167		166
Current portion of deferred revenue	1,128		1,195
Current maturities of debt	5		505
Operating lease current liabilities	45		46
Related party current liabilities	95		8
Total current liabilities	2,558		3,226
Long-term deferred revenue	83		88
Long-term debt	9,044		8,690

Deferred tax liabilities	479		509
Operating lease liabilities	296		292
Other long-term liabilities	838		134
Total liabilities	13,298		12,939
Commitments and contingencies (Note 14)
Stockholders’ equity (deficit):
Common stock, par value $0.001 per share; 9,000 shares authorized; 3,851 and 3,843 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	4		4
Accumulated other comprehensive (loss) income, net of tax	(7)		3


Accumulated deficit	(2,110)		(2,572)
Total stockholders’ equity (deficit)	(2,113)		(2,565)
Total liabilities and stockholders’ equity (deficit)	$	11,185	$	10,374

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 Six Months Ended June 30, 2024
	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, 2023	3,843	$	4	$	3	$	—	—	$	—	$	(2,572)	$	(2,565)
Cumulative effect of change in accounting principles	—	—		—		—		—	—		3		3
Comprehensive (loss) income, net of tax	—	—		(10)		—		—	—		582		572
Share-based payment expense	—	—		—		102		—	—		—		102
Exercise of stock options and vesting of restricted stock units	8	—		—		—		—	—		—		—
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(20)		—	—		—		(20)

Cash dividends paid on common stock, $0.0532 per share	—	—		—		(82)		—	—		(123)		(205)



Balance at June 30, 2024	3,851	$	4	$	(7)	$	—	—	$	—	$	(2,110)	$	(2,113)

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 June 30, 2024
	Common Stock			Accumulated Other Comprehensive Loss		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit		Total Stockholders’ Equity (Deficit)
(in millions)	Shares	Amount						Shares	Amount
Balance at March 31, 2024	3,847	$	4	$	(4)	$	—	—	$	—	$	(2,370)	$	(2,370)

Comprehensive (loss) income, net of tax	—	—		(3)		—		—	—		316		313
Share-based payment expense	—	—		—		52		—	—		—		52
Exercise of stock options and vesting of restricted stock units	4	—		—		—		—	—		—		—
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(5)		—	—		—		(5)

Cash dividends paid on common stock, $0.0266 per share	—	—		—		(47)		—	—		(56)		(103)



Balance at June 30, 2024	3,851	$	4	$	(7)	$	—	—	$	—	$	(2,110)	$	(2,113)

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 Six Months Ended June 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	—	—		7		—		—	—		543		550
Share-based payment expense	—	—		—		94		—	—		—		94
Exercise of stock options and vesting of restricted stock units	6	—		—		—		—	—		—		—
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(18)		—	—		—		(18)
Capital contribution to Liberty Media related to Tax Sharing Agreement	—	—		—		—		—	—		4		4
Cash dividends paid on common stock, $0.0484 per share	—	—		—		(76)		—	—		(112)		(188)

Common stock repurchased	—	—		—		—		53	(202)		—		(202)
Common stock retired	(52)	—		—		—		(52)	199		(199)		—
Balance at June 30, 2023	3,845	$	4	$	3	$	—	1	$	(3)	$	(3,115)	$	(3,111)

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 June 30, 2023
	Common Stock			Accumulated Other Comprehensive (Loss) Income		Additional Paid-in Capital		Treasury Stock			Accumulated Deficit		Total Stockholders’ (Deficit) Equity
(in millions)	Shares	Amount						Shares	Amount
Balance at March 31, 2023	3,879	$	4	$	(4)	$	—	1	$	(5)	$	(3,254)	$	(3,259)

Comprehensive income, net of tax	—	—		7		—		—	—		310		317
Share-based payment expense	—	—		—		46		—	—		—		46
Exercise of stock options and vesting of restricted stock units	2	—		—		—		—	—		—		—
Withholding taxes on net share settlement of stock-based compensation	—	—		—		(4)		—	—		—		(4)
Capital contribution to Liberty Media related to Tax Sharing Agreement	—	—		—		—		—	—		18		18
Cash dividends paid on common stock, $0.0242 per share	—	—		—		(42)		—	—		(52)		(94)

Common stock repurchased	—	—		—		—		36	(135)		—		(135)
Common stock retired	(36)	—		—		—		(36)	137		(137)		—
Balance at June 30, 2023	3,845	$	4	$	3	$	—	1	$	(3)	$	(3,115)	$	(3,111)

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 Six Months Ended June 30,
(in millions)	2024		2023
Cash flows from operating activities:
Net income	$	582	$	543
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	273		275
Non-cash impairment and restructuring costs	1		20
Non-cash interest expense, net of amortization of premium	8		7

Provision for doubtful accounts	26		31


Loss on unconsolidated entity investments, net	57		4



Gain on other investments	(5)		(5)
Share-based payment expense	91		87
Deferred income tax benefit	(22)		(94)
Amortization of right-of-use assets	24		21
Changes in operating assets and liabilities:
Receivables	39		(36)

Related party, net	4		17
Prepaid expenses and other current assets	(14)		(15)
Other long-term assets	—		(1)
Accounts payable and accrued expenses	(179)		(18)
Accrued interest	1		—
Deferred revenue	(71)		(40)
Operating lease liabilities	(25)		(25)
Other long-term liabilities	32		30
Net cash provided by operating activities	822		801
Cash flows from investing activities:
Additions to property and equipment	(347)		(333)

Purchase of other investments	—		(1)


Investments in related parties and other equity investees	(210)		(31)

Net cash used in investing activities	(557)		(365)
Cash flows from financing activities:

Taxes paid from net share settlements for stock-based compensation	(20)		(18)
Revolving credit facility borrowings	1,352		1,117
Revolving credit facility repayments	(1,002)		(974)

Principal payments of long-term borrowings	(505)		(177)

Payment of contingent consideration for business acquisition	(1)		(3)


Common stock repurchased and retired	—		(199)
Dividends paid	(205)		(188)
Net cash used in financing activities	(381)		(442)
Net decrease in cash, cash equivalents and restricted cash	(116)		(6)
Cash, cash equivalents and restricted cash at beginning of period (1)	224		65
Cash, cash equivalents and restricted cash at end of period (1)	$	108	$	59

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 Six Months Ended June 30,
(in millions)	2024		2023
Supplemental Disclosure of Cash and Non-Cash Flow Information
Cash paid during the period for:
Interest, net of amounts capitalized	$	195	$	205
Income taxes paid	$	106	$	177
Non-cash investing and financing activities:
Finance lease obligations incurred to acquire assets	$	—	$	7


Accumulated other comprehensive (loss) income, net of tax	$	(10)	$	7
Capital contribution from Liberty Media pursuant to Tax Sharing Agreement	$	—	$	4
Tax equity investments	$	757	$	—

(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)	June 30, 2024		December 31, 2023		June 30, 2023		December 31, 2022
Cash and cash equivalents	$	100	$	216	$	51	$	57
Restricted cash included in Other long-term assets	8		8		8		8
Total cash, cash equivalents and restricted cash at end of period	$	108	$	224	$	59	$	65

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 or annual plans. We also derive revenue from advertising on select non-music channels, which is sold under the SiriusXM Media brand, direct sales of our satellite radios and accessories, and other ancillary services. As of June 30, 2024, our SiriusXM business had approximately 33.3 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, comedy and podcast streaming discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through 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 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 June 30, 2024, Pandora had approximately 6.0 million subscribers.

The majority of revenue from Pandora is generated from advertising on our Pandora ad-supported radio service which is sold under the SiriusXM 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 addition, through AdsWizz Inc., we provide a comprehensive digital audio and programmatic advertising technology platform,

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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)

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 June 30, 2024, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, 83.3% 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 10 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 unaudited 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 June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 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, 2023, which was filed with the SEC on February 1, 2024.

Public companies are required to disclose certain information about their reportable operating segments. Operating segments are defined as significant components of an enterprise for which separate financial information is available and is evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We have determined that we have two reportable segments as our chief operating decision maker, our Chief Executive Officer, assesses performance and allocates resources based on the financial results of these segments. Refer to Note 16 for information related to our segments.

We have evaluated events subsequent to the balance sheet date and prior to the filing of this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024 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 17.

As previously disclosed, we identified an error in our previously issued unaudited consolidated financial statements related to the presentation of cash flows associated with borrowings and repayments related to our Senior Secured Credit Facility. We have corrected this error in the accompanying unaudited consolidated statements of cash flows for the six months ended June 30, 2023 to present on a gross basis the borrowings from the revolving credit facility of $1,117 and repayments of the revolving credit facility of $974. The corrections had no impact to the total net cash used in financing activities in the period. We evaluated the materiality of this error both qualitatively and quantitatively and have concluded that this error is immaterial to the impacted period.

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.

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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)

(2)Summary of Significant Accounting Policies

Recent Accounting Pronouncements

Accounting Standard Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are evaluating the disclosure requirements related to the new standard.

Accounting Standard Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). In November 2023, the FASB issued ASU 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We are evaluating the disclosure requirements related to the new standard.

Recently Adopted Accounting Policies

In March 2023, the FASB issued ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which expands the population of investments for which an investor may elect to apply the proportional amortization method. Under this ASU, an investor in a tax equity investment may elect the proportional amortization method for qualifying investments on a tax credit program-by-program basis. This ASU became effective in the first quarter of 2024. We adopted ASU 2023-02 as of January 1, 2024 using the modified retrospective approach.

Adoption of the new standard resulted in the recording of additional Equity method investments, Related party current liabilities, Other Long-term liabilities, Deferred tax liabilities and a cumulative effect adjustment to opening accumulated deficit. The effects of the changes made to our unaudited consolidated balance sheet as of January 1, 2024 for the adoption of ASU 2023-02 are included in the table below.


	Balance at December 31, 2023		Adjustments Due to ASU 2023-02		Balance at January 1, 2024
Balance Sheet

Equity method investments	$	526	$	122	$	648

Related party current liabilities	$	8	$	15	$	23
Other long-term liabilities	$	134	$	109	$	243
Deferred tax liabilities	$	509	$	(5)	$	504

Accumulated deficit	$	(2,572)	$	3	$	(2,569)

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 June 30, 2024 and December 31, 2023, 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:


	June 30, 2024						December 31, 2023
	Level 1	Level 2		Level 3	Total Fair Value		Level 1	Level 2		Level 3	Total Fair Value
Liabilities:
Debt (a)	—	$	8,193	—	$	8,193	—	$	8,523	—	$	8,523

(a)The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 11 for information related to the carrying value of our debt as of June 30, 2024 and December 31, 2023.

(3)Restructuring Costs

During the three and six months ended June 30, 2024, restructuring costs were $3 and $15, respectively. During the six months ended June 30, 2024, we realigned our business to focus on strategic priorities, reducing the size of our workforce, and recorded a charge of $15 primarily related to severance and other related costs. The restructuring charges were recorded to Impairment, restructuring and acquisition costs in our unaudited consolidated statements of comprehensive income.

During the three and six months ended June 30, 2023, restructuring costs were $5 and $35, respectively. During the six months ended June 30, 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 $28 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.

(4)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 six months ended June 30, 2024 and 2023.

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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 207 and 175 for the three months ended June 30, 2024 and 2023, respectively, and 185 and 162 for the six months ended June 30, 2024 and 2023, 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 June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net Income available to common stockholders for basic net income per common share	$	316	$	310	$	582	$	543
Effect of interest on assumed conversions of convertible notes, net of tax	—		—		—		1
Net Income available to common stockholders for dilutive net income per common share	$	316	$	310	$	582	$	544
Denominator:
Weighted average common shares outstanding for basic net income per common share	3,848		3,861		3,846		3,875
Weighted average impact of assumed convertible notes	—		3		—		3
Weighted average impact of dilutive equity instruments	7		9		12		14
Weighted average shares for diluted net income per common share	3,855		3,873		3,858		3,892
Net income per common share:
Basic	$	0.08	$	0.08	$	0.15	$	0.14
Diluted	$	0.08	$	0.08	$	0.15	$	0.14

(5)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:


	June 30, 2024		December 31, 2023
Gross customer accounts receivable	$	562	$	631
Allowance for doubtful accounts	(9)		(15)
Customer accounts receivable, net	$	553	$	616
Receivables from distributors	57		56
Other receivables	34		37
Total receivables, net	$	644	$	709

(6)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 June 30, 2024.

As of June 30, 2024, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the three and six months ended June 30, 2024 and 2023. As of June 30, 2024, 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 June 30, 2024 and December 31, 2023, 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)

(7)Intangible Assets

Our intangible assets include the following:


		June 30, 2024						December 31, 2023
	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		(156)		64		220		(149)		71
Licensing agreements	12 years	3		(3)		—		3		(3)		—
Software and technology	7 years	28		(23)		5		28		(22)		6
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		(305)		137		442		(279)		163
Software and technology	5 years	391		(379)		12		391		(372)		19
Total intangible assets		$	3,730	$	(866)	$	2,864	$	3,730	$	(825)	$	2,905

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 June 30, 2024, there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three and six months ended June 30, 2024 and 2023.

Definite Life Intangible Assets

Amortization expense for all definite life intangible assets was $18 and $36 for the three months ended June 30, 2024 and 2023, respectively, and $42 and $73 for the six months ended June 30, 2024 and 2023, respectively. There were no retirements or impairments of definite lived intangible assets during the three and six months ended June 30, 2024 and 2023.

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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 2024 through 2028 and for periods thereafter is as follows:


Years ending December 31,	Amount
2024 (remaining)	$	36
2025	71
2026	71
2027	25
2028	15
Thereafter	—
Total definite life intangible assets, net	$	218

(8)Property and Equipment

Property and equipment, net, consists of the following:


	June 30, 2024		December 31, 2023
Satellite system	$	1,598	$	1,598
Terrestrial repeater network	117		117
Leasehold improvements	112		106
Broadcast studio equipment	157		146
Capitalized software and hardware	2,175		2,178
Satellite telemetry, tracking and control facilities	86		84
Furniture, fixtures, equipment and other	109		110
Land	32		32
Building	75		74
Construction in progress	867		538
Total property and equipment	5,328		4,983
Accumulated depreciation	(3,454)		(3,229)
Property and equipment, net	$	1,874	$	1,754

Construction in progress consists of the following:


	June 30, 2024		December 31, 2023
Satellite system	$	613	$	490
Terrestrial repeater network	9		7
Capitalized software and hardware	227		17
Other	18		24
Construction in progress	$	867	$	538

Depreciation and amortization expense on property and equipment was $115 and $103 for the three months ended June 30, 2024 and 2023, respectively, and $231 and $202 for the six months ended June 30, 2024 and 2023, respectively. During the three and six months ended June 30, 2024, we retired property and equipment of less than $1 and $7, respectively, and during the six months ended June 30, 2024, we recorded related impairment charges of $1, primarily related to terminated software projects. There were no impairment charges recorded during the three months ended June 30, 2024. During the three and six months ended June 30, 2023, we retired property and equipment of $16 and $269, respectively, and recorded related impairment charges of $10 and $13, respectively, primarily related to terminated software projects.

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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 $6 and $4 for the three months ended June 30, 2024 and 2023, respectively, and $12 and $6 for the six months ended June 30, 2024 and 2023, 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 $6 and $3 for the three months ended June 30, 2024 and 2023, respectively, and $11 and $7 for the six months ended June 30, 2024 and 2023, respectively.

Satellites

As of June 30, 2024, 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 June 30, 2024:


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

Our XM-3 satellite remains available as an in-orbit spare.

(9)Leases

We have operating and finance leases for offices, terrestrial repeaters, data centers and certain equipment. Our leases have remaining lease terms of less than 1 year to 19 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. We elected the practical expedient to account for the lease and non-lease components as a single component. Additionally, we elected the practical expedient to not recognize right-of-use assets or lease liabilities for short-term leases, which are those leases with a term of twelve months or less at the lease commencement date.

The components of lease expense were as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease cost	$	16	$	11	$	31	$	32
Finance lease cost	2		1		3		1
Sublease income	(1)		(1)		(2)		(2)
Total lease cost	$	17	$	11	$	32	$	31

During the six months ended June 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 3 for additional information.

(10)Related Party Transactions

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

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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 June 30, 2024, Liberty Media beneficially owned, directly and indirectly, 83.3% 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 15 for more information regarding the tax sharing agreement.

On December 11, 2023, Holdings entered into definitive agreements whereby, subject to the terms thereof, Liberty Sirius XM Holdings Inc., a Delaware corporation and a wholly owned subsidiary of Liberty Media (“New Sirius”), would split-off from Liberty Media. The transactions would be effectuated by means of a redemptive split-off of New Sirius (the “Split-Off”), which will own all of the assets and liabilities attributed to Liberty Media’s Series A Liberty SiriusXM common stock (“LSXMA”), Series B Liberty SiriusXM common stock (“LSXMB”) and Series C Liberty SiriusXM common stock (“LSXMK”, together with the LSXMB and LSXMA stock, the “Liberty SiriusXM Group”). Following the Split-Off, New Sirius will combine with Holdings through the merger of Radio Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of New Sirius (“Merger Sub”), with Holdings, with Holdings becoming a wholly owned subsidiary of New Sirius (the “Merger” and, together with the Split-Off, the “Transactions”). As part of the Merger, New Sirius will be renamed “Sirius XM Holdings Inc.”

To effect the Transactions, on December 11, 2023, Liberty Media entered into (i) a Reorganization Agreement (the “Reorganization Agreement”) with Holdings and New Sirius, and (ii) an Agreement and Plan of Merger (the “Merger Agreement”) with New Sirius, Holdings and Merger Sub.

In connection with the Merger Agreement and the Reorganization Agreement, on December 11, 2023, certain trusts related to Dr. John C. Malone (collectively, the “Malone Stockholders”) entered into a voting agreement (the “Voting Agreement”) with Liberty Media, Holdings and New Sirius, pursuant to which, among other things, the Malone Stockholders agreed, subject to the terms of the Voting Agreement, to vote their respective shares of Liberty Media’s LSXMA and LSXMB in favor of the Split-Off.

The Transactions have been unanimously approved by Liberty Media’s Board of Directors and a Special Committee of the Board of Directors of Holdings and by Holdings’ Board of Directors. The Transactions are subject to approval by a majority of the aggregate voting power of the shares of Liberty SiriusXM common stock present, whether in-person or by proxy, at a stockholder meeting, the receipt by Liberty Media and New Sirius of tax opinions from their respective tax counsel, as well as the receipt of required regulatory approvals and the satisfaction of other customary closing conditions. A subsidiary of Liberty Media owning a majority of the outstanding shares of Holdings has delivered a written consent approving the Transactions on behalf of a majority of Holdings’ stockholders. Following the Transactions, Liberty Media and New Sirius will operate independently, and neither is expected to have any ownership interest in the other. All of the executive officers of Holdings immediately prior to consummation of the Transactions will be the initial executive officers of New Sirius, and New Sirius will continue to operate under the SiriusXM name and brand.

On June 16, 2024, Holdings entered into amendments (the “Amendments”) to (i) the Reorganization Agreement and the Merger Agreement. The Amendments, among other things, ratably adjust the exchange ratios in each of the Reorganization Agreement and the Merger Agreement in connection with the Transactions to reduce the total number of outstanding shares of New Sirius common stock, par value $0.001 per share (“New Sirius Common Stock”), following the consummation of the Transactions. The revised exchange ratio in the Reorganization Agreement reduces by 90% the number of shares of New Sirius Common Stock that otherwise would have been issued to holders of Liberty SiriusXM Common Stock (as defined below). As a result of the revised exchange ratio under the Merger Agreement, each existing holder of SiriusXM common stock, par value $0.001 per share (“SiriusXM Common Stock”), will receive 1 share in New Sirius for every 10 shares of SiriusXM Common Stock it holds as of immediately prior to the consummation of the Transactions, with cash paid in lieu of fractional shares.

These changes to the exchange ratios affect SiriusXM stockholders and holders of shares of LSXMA, LSXMB and LSXMK uniformly and will not alter any such stockholder’s percentage interest in the outstanding shares of New Sirius

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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 as of immediately following the consummation of the Transactions, except to the extent that it results in some stockholders receiving cash in lieu of owning a fractional share of New Sirius Common Stock as described above.

In addition, in order to facilitate the Transactions, Sirius XM Radio Inc., a Delaware corporation, intends to convert under Delaware state law to a Delaware limited liability company prior to the closing of the Transaction.

The Amendments were approved by Liberty’s Board of Directors, the SiriusXM Special Committee and SiriusXM’s Board of Directors. Liberty’s Board of Directors has recommended that holders of shares of LSXMA and LSXMB vote in favor of the Split-Off, as it has been amended. Additionally, in connection with the execution of the Amendments, Liberty Radio, LLC, a wholly owned subsidiary of Liberty Media that holds a majority of the outstanding shares of SiriusXM common stock, in its capacity as stockholder of SiriusXM, delivered to SiriusXM a written consent pursuant to Section 228 of the General Corporation Law of the State of Delaware, approving and adopting the Amendments. As a result, no meeting of the stockholders of SiriusXM will be held in connection with the Amendments.

Assuming satisfaction of all conditions to closing, the Transactions are expected to be completed after the close of business on Monday, September 9, 2024.

During the three and six months ended June 30, 2024, we recognized costs associated with the Transactions of $14 and $29, respectively, which were recorded to Impairment, restructuring and acquisition costs in our unaudited consolidated statements of comprehensive income.

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 Equity method investments as of June 30, 2024 and December 31, 2023 included the carrying value of our investment balance in Sirius XM Canada of $416 and $423, respectively, and, as of each of June 30, 2024 and December 31, 2023, 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 each of the three and six months ended June 30, 2024 and 2023. 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 $23 and $26 during the three months ended June 30, 2024 and 2023, respectively, and $47 and $51 during the six months ended June 30, 2024 and 2023, respectively.

SoundCloud

We have an investment in SoundCloud which is accounted for as an equity method investment and recorded in Equity method investments 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 loss was $2 and $1 for the three months ended June 30, 2024 and 2023, respectively, and $2 for each of the six months ended June 30, 2024 and 2023, which was recorded in Other (expense) income in our unaudited consolidated statements of comprehensive income.

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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)

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 $15 and $14 for the three months ended June 30, 2024 and 2023, respectively, and $30 and $25 for the six months ended June 30, 2024 and 2023, respectively. We also had related party liabilities of $21 and $20 as of June 30, 2024 and December 31, 2023, respectively, related to this agreement.

Tax equity investments

Sirius XM has entered into certain tax-effective clean energy technology investments. We invested $23 and $2 during the three months ended June 30, 2024 and 2023, respectively, and $210 and $31 during the six months ended June 30, 2024 and 2023, respectively, in these clean energy projects. As of January 1, 2024, we adopted ASU 2023-02 using the modified retrospective approach and have accounted for these investments using the proportional amortization method. The unamortized investment balance as of June 30, 2024 was $937 and was recorded to Equity method investments in our unaudited consolidated balance sheets. Under the proportional amortization method, the investment balance will be amortized over the term of the investments based on the current period income tax benefits as a proportion to the total expected income tax benefits. We also recorded liabilities of $767 related to future contractual payments and contingent payments which we determined to be probable, of which $87 is recorded in Related party current liabilities and the balance is recorded in Other long-term liabilities in our unaudited consolidated balance sheets.

(11)Debt

Our debt as of June 30, 2024 and December 31, 2023 consisted of the following:

Principal Amount at

Carrying value(a) at

Issuer / Borrower

Issued

Debt

Maturity Date

Interest
Payable

June 30, 2024

December 31, 2023

Sirius XM

(b) (d)

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

995

994

Sirius XM
(b)

July 2017

5.00% Senior Notes

August 1, 2027

semi-annually on February 1 and August 1

1,500

1,495

1,494

Sirius XM
(b)

June 2021

4.00% Senior Notes

July 15, 2028

semi-annually on January 15 and July 15

2,000

1,986

1,985

Sirius XM
(b)

June 2019

5.500% Senior Notes

July 1, 2029

semi-annually on January 1 and July 1

1,250

1,242

1,241

Sirius XM
(b)

June 2020

4.125% Senior Notes

July 1, 2030

semi-annually on January 1 and July 1

1,500

1,489

1,488

Sirius XM
(b)

August 2021

3.875% Senior Notes

September 1, 2031

semi-annually on March 1 and September 1

1,500

1,487

Sirius XM

December 2012

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

August 31, 2026

variable fee paid quarterly

350

—

Sirius XM

Various

Finance leases

Various

n/a

Total Debt

9,057

9,204

Less: total current maturities

505

Less: total deferred financing costs

Total long-term debt

9,044

8,690

(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.

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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)

(c)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 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. Sirius XM's borrowings are based on the Secured Overnight Financing Rate (“SOFR”) 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 June 30, 2024. 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.

(d)In April 2022, Sirius XM entered into an amendment to the Credit Facility to incorporate an Incremental Term Loan borrowing of $500. Interest on the Incremental Term Loan borrowing was based on SOFR plus an applicable rate. On April 11, 2024, the Incremental Term Loan matured and was retired with cash for 100% of the principal amount plus accrued and unpaid interest to the date of maturity.

(e)On January 26, 2024, Sirius XM entered into an amendment to the Credit Facility to, among other things, incorporate a $1,100 delayed draw incremental term loan. Subject to the conditions described in the amendment, the delayed draw incremental term loan shall be available to be drawn by Sirius XM in up to three separate drawings until December 31, 2024. If drawn, interest on the delayed draw incremental term loan 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.

At June 30, 2024 and December 31, 2023, we were in compliance with our debt covenants.

(12)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 3,851 and 3,843 shares of common stock issued and outstanding on June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024, there were 228 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.

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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)

Quarterly Dividends

During the six months ended June 30, 2024, our board of directors declared and paid the following dividends:


Declaration Date	Dividend Per Share		Record Date	Total Amount		Payment Date
January 24, 2024	$	0.0266	February 9, 2024	$	102	February 23, 2024
April 24, 2024	$	0.0266	May 10, 2024	$	103	May 29, 2024

Stock Repurchase Program

As of June 30, 2024, 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 June 30, 2024, 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. During the six months ended June 30, 2024, we did not repurchase any shares of our common stock.

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


	June 30, 2024			June 30, 2023
Share Repurchase Type	Shares	Amount		Shares	Amount
Open Market Repurchases	—	$	—	53	$	202

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 June 30, 2024 and December 31, 2023.

(13)Benefit Plans

We recognized share-based payment expense of $46 and $42 for the three months ended June 30, 2024 and 2023, respectively, and $91 and $87 for the six months ended June 30, 2024 and 2023, 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 receive one share of common stock upon vesting. As of June 30, 2024, 79 shares of common stock were available for future grants under the 2015 Plan.

The Compensation Committee intends to award equity-based compensation to our senior management in the form of: stock options, restricted stock units, PRSUs, which will cliff vest after a performance period target established by the Compensation Committee is achieved, and PRSUs, which will cliff vest after a performance period based on the performance of our common stock relative to the companies included in the S&P 500 Index, which we refer to as a relative “TSR” or “total stockholder return” metric. TSRs based on the relative total stockholder return metric will only vest if our performance achieves at least the 25th percentile, with a target payout requiring performance at the 50th percentile. The settlement of

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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)

PRSUs earned in respect of the applicable performance period will be generally subject to the executive’s continued employment with us through the date the total stockholder return performance is certified by the Compensation Committee.

Other Plans

We maintain six share-based benefit plans in addition to the 2015 Plan — the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the 2014 Stock Incentive Plan of AdsWizz Inc., the Pandora Media, Inc. 2011 Equity Incentive Plan, the Pandora Media, Inc. 2004 Stock Plan and the TheSavageBeast.com, Inc. 2000 Stock Incentive Plan. Excluding dividend equivalent units granted as a result of a declared dividend, no further awards may be made under these plans.

The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees, members of our board of directors and non-employees:


	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2024	2023	2024	2023
Risk-free interest rate	4.7%	3.6%	4.4%	4.0%
Expected life of options — years	3.75	3.80	3.76	3.80
Expected stock price volatility	41%	34%	40%	31%