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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 MARCH 31, 2021
OR
 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: (212584-5100
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 classTrading Symbol(s)Name of exchange on which registered
Common stock, $0.001 par valueSIRINASDAQ Global Select Market
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 companyEmerging 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 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 April 26, 2021)
Common stock, $0.001 par value4,090,766,059shares


Table of Contents
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
Item No.Description
1

Table of Contents

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 For the Three Months Ended March 31,
(in millions, except per share data)20212020
Revenue:  
Subscriber revenue$1,611 $1,585 
Advertising revenue354 285 
Equipment revenue57 41 
Other revenue36 41 
Total revenue2,058 1,952 
Operating expenses:  
Cost of services:  
Revenue share and royalties640 570 
Programming and content130 118 
Customer service and billing117 118 
Transmission48 40 
Cost of equipment4 4 
Subscriber acquisition costs86 99 
Sales and marketing217 225 
Engineering, design and development64 71 
General and administrative121 107 
Depreciation and amortization132 132 
Impairment, restructuring and acquisition costs245  
Total operating expenses1,804 1,484 
Income from operations254 468 
Other (expense) income:  
Interest expense(100)(99)
Other income3 4 
Total other (expense) income(97)(95)
Income before income taxes157 373 
Income tax benefit (expense)62 (80)
Net income$219 $293 
Foreign currency translation adjustment, net of tax5 (25)
Total comprehensive income$224 $268 
Net income per common share:  
Basic$0.05 $0.07 
Diluted$0.05 $0.07 
Weighted average common shares outstanding:  
Basic4,137 4,405 
Diluted4,222 4,515 
 
See accompanying notes to the unaudited consolidated financial statements.

2

Table of Contents
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)March 31, 2021December 31, 2020
ASSETS(unaudited)
Current assets:  
Cash and cash equivalents$59 $71 
Receivables, net611 672 
Inventory, net8 10 
Related party current assets11 20 
Prepaid expenses and other current assets216 194 
Total current assets905 967 
Property and equipment, net1,403 1,629 
Intangible assets, net3,302 3,340 
Goodwill3,128 3,122 
Related party long-term assets538 531 
Deferred tax assets111 111 
Operating lease right-of-use assets392 427 
Other long-term assets209 206 
Total assets$9,988 $10,333 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)  
Current liabilities:  
Accounts payable and accrued expenses$1,057 $1,223 
Accrued interest80 174 
Current portion of deferred revenue1,664 1,721 
Current maturities of debt1 1 
Operating lease current liabilities48 48 
Total current liabilities2,850 3,167 
Long-term deferred revenue115 118 
Long-term debt8,878 8,499 
Deferred tax liabilities192 266 
Operating lease liabilities406 419 
Other long-term liabilities150 149 
Total liabilities12,591 12,618 
Commitments and contingencies (Note 16)
Stockholders’ equity (deficit):  
Common stock, par value $0.001 per share; 9,000 shares authorized; 4,107 and 4,176 shares issued; 4,105 and 4,173 shares outstanding at March 31, 2021 and December 31, 2020, respectively
4 4 
Accumulated other comprehensive income, net of tax20 15 
Additional paid-in capital  
Treasury stock, at cost; 2 and 3 shares of common stock at March 31, 2021 and December 31, 2020, respectively
(13)(19)
Accumulated deficit(2,614)(2,285)
Total stockholders’ equity (deficit)(2,603)(2,285)
Total liabilities and stockholders’ equity (deficit)$9,988 $10,333 
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 March 31, 2021
Common StockAccumulated Other Comprehensive IncomeAdditional
Paid-in
Capital
Treasury StockAccumulated
Deficit
Total
Stockholders’ Equity (Deficit)
(in millions)SharesAmountSharesAmount
Balance at December 31, 20204,176 $4 $15 $ 3 $(19)$(2,285)$(2,285)
Comprehensive income, net of tax— — 5 — — — 219 224 
Share-based payment expense— — — 55 — — — 55 
Exercise of stock options and vesting of restricted stock units17 — — — — — —  
Withholding taxes on net share settlement of stock-based compensation— — — (20)— — — (20)
Cash dividends paid on common stock, $0.014641 per share
— — — (35)— — (26)(61)
Common stock repurchased— — — — 85 (516)— (516)
Common stock retired(86)— — — (86)522 (522) 
Balance at March 31, 20214,107 $4 $20 $ 2 $(13)$(2,614)$(2,603)

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 March 31, 2020
Common StockAccumulated Other Comprehensive Income (Loss)Additional
Paid-in
Capital
Treasury StockAccumulated
Deficit
Total
Stockholders’ Equity (Deficit)
(in millions)SharesAmountSharesAmount
Balance at December 31, 20194,412 $4 $8 $395  $ $(1,143)$(736)
Comprehensive (loss) income, net of tax— — (25)— — — 293 268 
Share-based payment expense — — — 59 — — — 59 
Exercise of stock options and vesting of restricted stock units8 — — — — — —  
Withholding taxes on net share settlement of stock-based compensation— — — (36)— — — (36)
Cash dividends paid on common stock, $0.01331 per share
— — — (59)— — — (59)
Common stock repurchased — — — — 41 (243)— (243)
Common stock retired (41)— — (243)(41)243 —  
Balance at March 31, 20204,379 $4 $(17)$116  $ $(850)$(747)

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 Three Months Ended March 31,
(in millions)20212020
Cash flows from operating activities:  
Net income$219 $293 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization132 132 
Non cash impairment and restructuring costs245  
Non-cash interest expense, net of amortization of premium5 5 
Provision for doubtful accounts10 19 
Amortization of deferred income related to equity method investment (1)
Loss on unconsolidated entity investments, net1 2 
(Gain) loss on other investments(1)5 
Share-based payment expense51 55 
Deferred income tax (benefit) expense(76)72 
Amortization of right-of-use assets15 14 
Changes in operating assets and liabilities:  
Receivables45 47 
Inventory2 (1)
Related party, net10 6 
Prepaid expenses and other current assets(22)(18)
Other long-term assets(4)2 
Accounts payable and accrued expenses(173)(131)
Accrued interest(94)(62)
Deferred revenue(59)(11)
Operating lease liabilities(12)(11)
Other long-term liabilities(2)(1)
Net cash provided by operating activities292 416 
Cash flows from investing activities:  
Additions to property and equipment(78)(62)
Purchases of other investments(3)(6)
Acquisition of business, net of cash acquired6  
Investments in related parties and other equity investees(5)(80)
Repayment from related party2 3 
Net cash used in investing activities(78)(145)
Cash flows from financing activities:  
Taxes paid from net share settlements for stock-based compensation(20)(35)
Revolving credit facility, net of deferred financing costs374  
Principal payments of long-term borrowings(1)(2)
Common stock repurchased and retired(522)(243)
Dividends paid(61)(59)
Net cash used in financing activities(230)(339)
Net decrease in cash, cash equivalents and restricted cash(16)(68)
Cash, cash equivalents and restricted cash at beginning of period (1)
83 120 
Cash, cash equivalents and restricted cash at end of period (1)
$67 $52 
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 Three Months Ended March 31,
(in millions)20212020
Supplemental Disclosure of Cash and Non-Cash Flow Information
Cash paid during the period for:
Interest, net of amounts capitalized$189 $155 
Income taxes paid$2 $5 
Non-cash investing and financing activities:
Treasury stock not yet settled$6 $ 
Accumulated other comprehensive income (loss), net of tax$5 $(25)


(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)March 31, 2021December 31, 2020March 31, 2020December 31, 2019
Cash and cash equivalents$59 $71 $40 $106 
Restricted cash included in Other long-term assets8 12 12 14 
Total cash, cash equivalents and restricted cash at end of period$67 $83 $52 $120 
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 - our Sirius XM business and our Pandora business. 
Sirius XM
Our Sirius XM 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. Sirius XM's premier content bundles include live, curated and certain exclusive and on demand programming. The Sirius XM 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 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 Sirius XM 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, direct sales of our satellite radios and accessories, and other ancillary services.  As of March 31, 2021, our Sirius XM business had approximately 34.5 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, fuel prices, sports schedules and scores and movie listings, a traffic information service that includes information as to road closings, traffic flow and incident data to consumers with compatible in-vehicle navigation systems, and real-time weather services in vehicles, boats and planes.
Sirius XM 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
Our Pandora 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, car 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 Sirius XM 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 March 31, 2021, Pandora had approximately 6.5 million subscribers.
The majority of revenue from our Pandora business is generated from advertising on our Pandora ad-supported radio service. We also derive subscription revenue from our Pandora Plus and Pandora Premium subscribers.
Our Pandora business also sells advertising on audio platforms and in podcasts unaffiliated with us. Pandora has an arrangement with SoundCloud Holdings, LLC ("SoundCloud") to be its exclusive US ad sales representative. Through this arrangement Pandora is able to offer advertisers the ability to execute campaigns in the US across the Pandora and SoundCloud listening platforms. We also have arrangements to serve as the ad sales representative for certain podcasts. In addition, through AdsWizz Inc., Pandora provides a comprehensive digital audio and programmatic advertising technology platform, which
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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)
connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.
On February 10, 2020, Sirius XM invested $75 in SoundCloud. SoundCloud is the world’s largest open audio platform, with a connected community of creators, listeners, and curators. SoundCloud’s platform enables its users to upload, promote, share and create audio entertainment. The minority investment complements the existing ad sales relationship between SoundCloud and Pandora. Refer to Note 12 for more information on this investment.
On June 16, 2020, Sirius XM acquired Simplecast for $28 in cash. Simplecast is a podcast management and analytics platform. Refer to Note 3 for more information on this acquisition.
On October 16, 2020, Sirius XM acquired certain assets and liabilities of Stitcher from The E.W. Scripps Company and certain of its subsidiaries for total consideration of $302, which included $266 in cash and $36 related to the acquisition date fair value of contingent consideration. The agreement provides that Sirius XM will potentially make up to $60 in additional contingent payments to Scripps based on Stitcher achieving certain financial metrics in 2020 and 2021. The acquisition of Stitcher, in conjunction with Simplecast, created a full-service platform for podcast creators, publishers and advertisers. Refer to Note 3 for more information on this acquisition.
Impact of the coronavirus (“COVID-19”) pandemic
The precise extent to which the COVID-19 pandemic will impact our operational and financial performance will depend on various factors. To date, the pandemic has not increased our costs of or access to capital under our revolving credit facility or in the debt capital markets, and we do not believe it is reasonably likely to in the future. In addition, we do not believe that the pandemic will affect our ongoing ability to meet the covenants in our debt instruments, including under our revolving credit facility.
Liberty Media
As of March 31, 2021, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, approximately 77% of the outstanding shares of our common stock.  As a result, we are a “controlled company” for the purposes of the NASDAQ corporate governance requirements.
Basis of Presentation
The accompanying 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 March 31, 2021 and for the three months ended March 31, 2021 and 2020 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, 2020, which was filed with the SEC on February 2, 2021.
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 18 for information related to our segments.
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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 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 months ended March 31, 2021 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 19.
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.
We are not presently aware of any events or circumstances arising from the COVID-19 pandemic that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained. Any such changes will be recognized in the consolidated financial statements. Actual results could differ from estimates, and any such differences may be material to our financial statements.

(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 March 31, 2021 and December 31, 2020, the carrying amounts of cash and cash equivalents, receivables and accounts payable approximated fair value due to the short-term nature of these instruments.
Our liabilities measured at fair value were as follows:
 March 31, 2021December 31, 2020
 Level 1Level 2Level 3Total Fair
Value
Level 1Level 2Level 3Total Fair
Value
Liabilities:        
Debt (a)
 $9,246  $9,246  $9,011  $9,011 
(a)The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm.  Refer to Note 13 for information related to the carrying value of our debt as of March 31, 2021 and December 31, 2020.

Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income of $20 was primarily comprised of the cumulative foreign currency translation adjustments related to our investment in and loan to Sirius XM Canada (refer to Note 12 for additional information). During the three months ended March 31, 2021, we recorded foreign currency translation adjustment income of $5, net of tax expense of $1. During the three months ended March 31, 2020, we recorded foreign currency translation adjustment loss of $25, net of a tax benefit of $8.

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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)
(3)Acquisitions
Stitcher
On October 16, 2020, Sirius XM acquired certain assets and liabilities of Stitcher from The E.W. Scripps Company and certain of its subsidiaries ("Scripps") for $266 in cash, which amount includes net working capital adjustments. The agreement provides that Sirius XM will potentially make up to $60 in additional contingent payments to Scripps based on Stitcher achieving certain financial metrics in 2020 and 2021. The total purchase consideration of $302 includes $36 related to the acquisition date fair value of the contingent consideration. The fair value of the contingent consideration was determined using a probability-weighted cash flow model and will be remeasured to fair value at each subsequent reporting period. Stitcher is included in our Pandora reporting unit.
The table below summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date:
Acquired Assets:
Receivables, net$21 
Prepaid expenses and other current assets16 
Property and equipment8 
Intangible assets38 
Goodwill224 
Operating lease right-of-use assets11 
Total assets$318 
Assumed Liabilities:
Accounts payable and accrued expenses$4 
Deferred revenue1 
Operating lease current liabilities2 
Operating lease liabilities9 
Total liabilities$16 
Total consideration$302 
The Stitcher acquisition was accounted for using the acquisition method of accounting and was financed through borrowings under our Credit Facility.
Simplecast
On June 16, 2020, Sirius XM acquired Simplecast for $28 in cash. Simplecast is a podcast management and analytics platform. Simplecast complements AdsWizz’s advertising technology platform, allowing the company to offer podcasters a simple solution for management, hosting, analytics and advertising sales, and is included in the Pandora reporting unit. The Simplecast acquisition was accounted for using the acquisition method of accounting. We recognized goodwill of $17, amortizable intangible assets of $12, other assets of less than $1 and deferred tax liabilities of $1.

No acquisition related costs were recognized for the three months ended March 31, 2021 and 2020.
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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)
(4)Restructuring Costs
During the three months ended March 31, 2021, we evaluated our office space needs and, as a result of such analysis, surrendered certain office leases primarily in New York, New York and Oakland, California. We assessed the recoverability of the carrying value of the operating lease right of use assets related to these locations. Based on that assessment, the carrying values of the assets were not recoverable and we recorded impairments of $18 to reduce the carrying value of the assets to their fair values. Additionally, we accrued expenses of $6 which we will not recognize any future economic benefits and wrote off leasehold improvements of $1. The fair values of the assets were determined using a discounted cash flow model based on management's assumptions regarding the ability to sublease the locations and the remaining term of the leases. The total charge of $25 was recorded to Impairment, restructuring and acquisition costs in our unaudited consolidated statement of comprehensive income for the three months ended March 31, 2021.

(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 months ended March 31, 2021 and 2020.
Common stock equivalents of 97 and 40 for the three months ended March 31, 2021 and 2020, 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 March 31,
 20212020
Numerator:  
Net Income available to common stockholders for basic net income per common share$219 $293 
Effect of interest on assumed conversions of convertible notes, net of tax2 2 
Net Income available to common stockholders for dilutive net income per common share$221 $295 
Denominator:  
Weighted average common shares outstanding for basic net income per common share4,137 4,405 
Weighted average impact of assumed convertible notes30 29 
Weighted average impact of dilutive equity instruments55 81 
Weighted average shares for diluted net income per common share
4,222 4,515 
Net income per common share:  
Basic$0.05 $0.07 
Diluted$0.05 $0.07 

(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
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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 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.
Receivables, net, consists of the following:
 March 31, 2021December 31, 2020
Gross customer accounts receivable$507 $574 
Allowance for doubtful accounts(12)(15)
Customer accounts receivable, net$495 $559 
Receivables from distributors73 73 
Other receivables43 40 
Total receivables, net$611 $672 

(7)Inventory, net
Inventory consists of finished goods and refurbished goods. Inventory is stated at the lower of cost or market.  We record an estimated allowance for inventory that is considered slow moving or obsolete or whose carrying value is in excess of net realizable value.  The provision related to products purchased for resale in our direct to consumer distribution channel and components held for resale by us is reported as a component of Cost of equipment in our unaudited consolidated statements of comprehensive income.  The provision related to inventory consumed in our OEM channel is reported as a component of Subscriber acquisition costs in our unaudited consolidated statements of comprehensive income.
Inventory, net, consists of the following:
 March 31, 2021December 31, 2020
Finished goods11 13 
Allowance for obsolescence(3)(3)
Total inventory, net$8 $10 

(8)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. ASC 350 also states that a reporting unit with a zero or negative carrying amount is not required to perform a qualitative assessment. Our Sirius XM reporting unit, which has an allocated goodwill balance of $2,290, had a negative carrying amount as of March 31, 2021.
As of March 31, 2021, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the three months ended March 31, 2021 and 2020.  As of March 31, 2021, 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 reporting unit.
As of March 31, 2021, the carrying amount of goodwill for our Sirius XM and Pandora reporting units was $2,290 and $838, respectively. During the three months ended March 31, 2021, we recorded $6 of goodwill related to purchase accounting adjustments for the acquisition of Stitcher. As of December 31, 2020, the carrying amount of goodwill for our Sirius XM and Pandora reporting units was $2,290 and $832, 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)
(9)Intangible Assets
Our intangible assets include the following:
  March 31, 2021December 31, 2020
 Weighted
Average
Useful Lives
Gross
Carrying
Value
Accumulated AmortizationNet Carrying
Value
Gross
Carrying
Value
Accumulated AmortizationNet Carrying
Value
Indefinite life intangible assets:
       
FCC licensesIndefinite$2,084 $— $2,084 $2,084 $— $2,084 
TrademarksIndefinite250 — 250 250 — 250 
Definite life intangible assets:       
OEM relationships15 years220 (109)111 220 (105)115 
Licensing agreements12 years45 (45) 45 (45) 
Software and technology7 years31 (17)14 31 (16)15 
Due to Pandora and Stitcher Acquisitions:
Indefinite life intangible assets:
TrademarksIndefinite$311 $— $311 $311 $— $311 
Definite life intangible assets:
Customer relationships8 years441 (118)323 441 (104)337 
Software and technology5 years373 (164)209 373 (145)228 
Total intangible assets $3,755 $(453)$3,302 $3,755 $(415)$3,340 

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 March 31, 2021, there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three months ended March 31, 2021 and 2020.
Definite Life Intangible Assets
Amortization expense for all definite life intangible assets was $38 for each of the three months ended March 31, 2021 and 2020. There were no retirements of definite lived intangible assets during the three months ended March 31, 2021 and 2020.
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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 2021 through 2025 and for periods thereafter is as follows:
Years ending December 31,Amount
2021 (remaining)$115 
2022154 
2023141 
202475 
202569 
Thereafter103 
Total definite life intangible assets, net$657 

(10)Property and Equipment
Property and equipment, net, consists of the following:
 March 31, 2021December 31, 2020
Satellite system$1,587 $1,587 
Terrestrial repeater network105 105 
Leasehold improvements108 111 
Broadcast studio equipment105 100 
Capitalized software and hardware1,404 1,372 
Satellite telemetry, tracking and control facilities98 96 
Furniture, fixtures, equipment and other92 92 
Land38 38 
Building63 63 
Construction in progress338 510 
Total property and equipment3,938 4,074 
Accumulated depreciation and amortization(2,535)(2,445)
Property and equipment, net$1,403 $1,629 
Construction in progress consists of the following:
 March 31, 2021December 31, 2020
Satellite system$213 $429 
Terrestrial repeater network10 8 
Capitalized software and hardware90 52 
Other25 21 
Construction in progress$338 $510 
Depreciation and amortization expense on property and equipment was $94 for each of the three months ended March 31, 2021 and 2020.  We retired property and equipment of $5 and $29 during the three months ended March 31, 2021 and 2020, respectively.
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 $3 and $5 for the three months ended March 31, 2021 and 2020, respectively, which related to the construction of our SXM-8 satellite. We also capitalize a portion of share-based compensation related to employee time for capitalized software projects. Capitalized share-based compensation costs were $4 for each of the three months ended March 31, 2021 and 2020.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(UNAUDITED)
(Dollars and shares in millions, except per share amounts)
Satellites
As of March 31, 2021, 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 March 31, 2021:
Satellite DescriptionYear DeliveredEstimated End of
Depreciable Life
FCC License Expiration Year
SIRIUS FM-5200920242025
SIRIUS FM-6201320282022
XM-320052020
2021(a)
XM-4200620212022
XM-5201020252026
(a)We filed an application with the FCC to extend the license for the XM-3 satellite on February 26, 2021 and expect it to be granted routinely.
On December 13, 2020, our SXM-7 satellite was successfully launched and in-orbit testing of SXM-7 began on January 4, 2021. During in-orbit testing of SXM-7, events occurred which caused failures of certain SXM-7 payload units. The evaluation of SXM-7 concluded that the satellite will not function as intended, which we considered to be a triggering event prompting the assessment as to whether the asset's carrying value of $220 was recoverable. In determining recoverability of SXM-7, we compared the asset's carrying value to the undiscounted cash flows derived from the satellite. SXM-7 was determined to be a total loss and therefore, we determined that the carrying value of the satellite is not recoverable and an impairment charge of $220 was recorded to Impairment, restructuring and acquisition costs in our unaudited consolidated statements of comprehensive income for the three months ended March 31, 2021.
We have procured insurance for SXM-7 to cover the risks associated with the satellite's launch and first year of in-orbit operation. The aggregate coverage under the insurance policy with respect to SXM-7 is $225. We have notified the underwriters of this policy of a potential claim with respect to SXM-7 and expect to file an insurance claim in the second quarter of 2021. At this time, we are unable to reliably estimate the timing and amount of insurance recoveries and will record the insurance recoveries when they are probable and estimable.
We do not expect our satellite radio service to be impacted by these adverse SXM-7 events. Our XM-3 and XM-4 satellites continue to operate and are expected to support our satellite radio service for several years. In addition, our XM-5 satellite remains available as an in-orbit spare. Construction of our SXM-8 satellite is underway and that satellite is expected to be launched into a geostationary orbit in 2021.

(11)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 17 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 March 31,
20212020
Operating lease cost$21 $20 
Finance lease cost  
Sublease income(1) 
Total lease cost$20 $20 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(UNAUDITED)
(Dollars and shares in millions, except per share amounts)

During the three months ended March 31, 2021, we ceased using certain leased locations and recorded an impairment charge of $18 to write down the carrying value of the right-of-use assets for these locations to their estimated fair values. Refer to Note 4 for additional information.

(12)Related Party Transactions 
In the normal course of business, we enter into transactions with related parties such as Sirius XM Canada and SoundCloud.

Liberty Media
As of March 31, 2021, Liberty Media beneficially owned, directly and indirectly, approximately 77% of the outstanding shares of our common stock. Liberty Media has one executive, one senior advisor and one of its directors on our board of directors.  Gregory B. Maffei, the President and Chief Executive Officer of Liberty Media, is the Chairman of our board of directors.

Sirius XM Canada
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 also made a loan to Sirius XM Canada in the aggregate amount of $131. The loan is denominated in Canadian dollars and is considered a long-term investment with any unrealized gains or losses reported within Accumulated other comprehensive (loss) income. During the three months ended March 31, 2021 and 2020, Sirius XM Canada repaid $2 and $3 of the principal amount of the loan, respectively.
Sirius XM has a Services Agreement and an Advisory Services Agreement with Sirius XM Canada. Each agreement has a thirty-year term. Pursuant to the Services Agreement, Sirius XM Canada currently pays Sirius XM 25% of its gross revenues on a monthly basis, and pursuant to the Advisory Services Agreement, Sirius XM Canada pays Sirius XM 5% of its gross revenues on a monthly basis.
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.
Our related party long-term assets as of March 31, 2021 and December 31, 2020 included the carrying value of our investment balance in Sirius XM Canada of $340 and $332, respectively, and, as of March 31, 2021 and December 31, 2020, also included $122 and $123, respectively, 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 months ended March 31, 2021 and 2020.  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 $25 for each of the three months ended March 31, 2021 and 2020.

SoundCloud
In February 2020, Sirius XM completed a $75 investment in SoundCloud's Series G Membership Units ("Series G Units"). The Series G Units are convertible at the option of the holders at any time into shares of ordinary membership units of SoundCloud at a ratio of one ordinary membership unit for each Series G Unit. The investment in SoundCloud is accounted for as an equity method investment which is recorded in Related party long-term assets in our unaudited consolidated balance sheets. Sirius XM has appointed two individuals to serve on SoundCloud's nine-member board of managers. For each of the three months ended March 31, 2021 and 2020, Sirius XM's share of SoundCloud's net loss was less than $1 which was recorded in Other income (expense) in our unaudited consolidated statement of comprehensive income.
In addition to our investment in SoundCloud, Pandora has an agreement with SoundCloud to be its exclusive US ad sales representative. Through this arrangement Pandora offers advertisers the ability to execute campaigns in the US across the
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(UNAUDITED)
(Dollars and shares in millions, except per share amounts)
Pandora and SoundCloud listening platforms. We recorded revenue share expense of $13 and $12 for the three months ended March 31, 2021 and 2020, respectively. We also had related party liabilities of $20 as of March 31, 2021 related to this agreement.

(13)Debt
Our debt as of March 31, 2021 and December 31, 2020 consisted of the following:
      
Carrying value(a) at
Issuer / BorrowerIssuedDebtMaturity DateInterest PayablePrincipal Amount at March 31, 2021March 31, 2021December 31, 2020
Sirius XM
(b)
July 2017
3.875% Senior Notes
August 1, 2022semi-annually on February 1 and August 11,000 998 997 
Pandora
(c) (d)
June 2018
1.75% Convertible Senior Notes
December 1, 2023semi-annually on June 1 and December 1193 172 170 
Sirius XM
(b)
July 2019
4.625% Senior Notes
July 15, 2024semi-annually on January 15 and July 151,500 1,489 1,488 
Sirius XM
(b)
May 2016
5.375% Senior Notes
July 15, 2026semi-annually on January 15 and July 151,000 993 993 
Sirius XM
(b)
July 2017
5.00% Senior Notes
August 1, 2027semi-annually on February 1 and August 11,500 1,490 1,490 
Sirius XM
(b)
June 2019
5.500% Senior Notes
July 1, 2029semi-annually on January 1 and July 11,250 1,238 1,237 
Sirius XM
(b)
June 2020
4.125% Senior Notes
July 1, 2030semi-annually on January 1 and July 11,500 1,484 1,484 
Sirius XM
(e)
December 2012Senior Secured Revolving Credit Facility (the "Credit Facility")June 29, 2023variable fee paid quarterly1,023 1,023 649 
Sirius XMVariousFinance leasesVarious n/a n/a