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Stockholders' Equity
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6 Months Ended |
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Jun. 30, 2014
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| Equity [Abstract] | |
| Stockholders' Equity |
Stockholders’ Equity
Common Stock, par value $0.001 per share
We were authorized to issue up to 9,000,000,000 shares of common stock as of June 30, 2014 and December 31, 2013. There were 5,712,347,567 and 6,096,220,526 shares of common stock issued and 5,706,347,567 and 6,096,220,526 shares outstanding on June 30, 2014 and December 31, 2013, respectively.
As of June 30, 2014, approximately 548,852,000 shares of common stock were reserved for issuance in connection with outstanding convertible debt, warrants, incentive stock based awards and common stock to be granted to third parties upon satisfaction of performance targets.
Stock Repurchase Program
As of June 30, 2014, our board of directors had approved $4,000,000 for repurchases of our common stock. In July 2014, our board of directors approved an additional $2,000,000 for repurchases 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 and in privately negotiated transactions, including transactions with Liberty Media and its affiliates.
On October 9, 2013, we entered into an agreement to repurchase $500,000 of our common stock from Liberty Media. Pursuant to this agreement, we repurchased $160,000 of our common stock from Liberty Media in 2013. On April 25, 2014, we completed the final purchase installment and repurchased 92,888,561 shares of our common stock for $340,000 from Liberty Media at a price of $3.66 per share.
As there were certain terms in the forward purchase contract with Liberty Media that could have caused the obligation not to be fulfilled, the instrument was classified as a liability and was marked to fair value with any gain or loss recorded to our unaudited consolidated statements of comprehensive income. We recognized $7,463 and $34,485 to Loss on change in value of derivatives in our unaudited consolidated statements of comprehensive income during the three and six months ended June 30, 2014, respectively.
In May 2014, we entered into an accelerated share repurchase agreement ("ASR agreement") with a third-party financial institution to repurchase up to $600,000 of our common stock. Under the ASR agreement we prepaid $600,000 to the financial institution and received an initial delivery of 112,500,000 shares of our common stock. We retired these shares and recorded a $354,375 reduction to stockholders' equity in the second quarter of 2014. The remaining $245,625 under this ASR agreement is included in Additional paid-in capital within our unaudited consolidated balance sheets as of June 30, 2014. The ASR agreement is expected to mature no later than August 1, 2014 and will settle following maturity. The aggregate purchase price we will pay under the ASR agreement will be determined using a pre-agreed grid that references the volume-weighted average price (“VWAP”) of our common stock, and the total aggregate number of shares to be repurchased under the ASR agreement will be determined based on the VWAP of our common stock minus a discount during the term of the ASR agreement.
During the six months ended June 30, 2014, we repurchased 188,419,584 additional shares of our common stock for $612,903, including fees and commissions, on the open market. Common stock repurchases are retired upon settlement. As of June 30, 2014, $20,739 of common stock repurchases had not settled, nor been retired, and were recorded as Treasury stock within our unaudited consolidated balance sheets and unaudited consolidated statements of stockholders' equity.
As of June 30, 2014, our cumulative repurchases since December 2012 have totaled 914,066,011 shares for $3,315,263, and $684,737 remained available under our stock repurchase program, which excludes the additional $2,000,000 authorized by our board of directors in July 2014.
Share Lending Arrangements
To facilitate the offering of the Exchangeable Notes, we entered into share lending agreements with Morgan Stanley Capital Services Inc. and UBS AG London Branch in July 2008. All loaned shares were returned to us as of October 2011, and the share lending agreements were terminated.
We recorded interest expense related to the amortization of the costs associated with the share lending arrangement and other issuance costs for our Exchangeable Notes of $3,433 and $3,097 for the three months ended June 30, 2014 and 2013, respectively, and $6,779 and $6,306 for the six months ended June 30, 2014 and 2013, respectively. As of June 30, 2014, the unamortized balance of the debt issuance costs was $5,922, with $5,792 recorded in Other current assets and $130 recorded in Related party current assets in our unaudited consolidated balance sheets. As of December 31, 2013, the unamortized balance of the debt issuance costs was $12,701, with $12,423 recorded in Other current assets, and $278 recorded in Related party current assets. These costs will continue to be amortized until the debt is terminated.
Preferred Stock, par value $0.001 per share
We were authorized to issue up to 50,000,000 shares of undesignated preferred stock as of June 30, 2014 and December 31, 2013, respectively. In January 2013, Liberty Media converted its remaining shares of the Series B Preferred Stock into 1,293,509,076 shares of our common stock. There were no shares of preferred stock issued or outstanding as of June 30, 2014 and December 31, 2013.
Warrants
We have issued warrants to purchase shares of our common stock in connection with distribution and programming agreements. During the three months ended June 30, 2014, 1,788,000 warrants were exercised to purchase shares of common stock on a net settlement basis, resulting in the issuance of 99,349 shares of our common stock. Approximately 16,667,000 and 18,455,000 warrants to acquire an equal number of shares of common stock were outstanding and fully vested as of June 30, 2014 and December 31, 2013, respectively. Warrants were included in our calculation of diluted net income per common share as the effect was dilutive for the three and six months ended June 30, 2014 and 2013. The outstanding warrants expire in the first quarter of 2015. At June 30, 2014 and December 31, 2013, the weighted average exercise price of outstanding warrants was $2.50 and $2.55 per share, respectively. We did not incur warrant related expenses during the three and six months ended June 30, 2014 and 2013.
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