Stockholders' Equity |
9 Months Ended |
|---|---|
Sep. 30, 2011 | |
| Stockholders' Equity [Abstract] | |
| Stockholders' Equity |
(12) 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 September 30,
2011 and December 31, 2010. There were 3,951,945,992 and 3,933,195,112 shares of common stock
issued and outstanding as of September 30, 2011 and December 31, 2010, respectively.
As of September 30, 2011, approximately 3,354,649,000 shares of common stock were reserved for
issuance in connection with outstanding convertible debt, preferred stock, warrants, incentive
stock awards and common stock to be granted to third parties upon satisfaction of performance
targets.
To facilitate the offering of the Exchangeable Notes, we entered into share lending agreements
with Morgan Stanley Capital Services Inc. (“MS”) and UBS AG London Branch (“UBS”) in July 2008,
under which we loaned MS and UBS an aggregate of 262,400,000 shares of our common stock in exchange
for a fee of $0.001 per share. During the third quarter of 2009, MS returned to us 60,000,000
shares of our common stock borrowed in July 2008, which were retired upon receipt. As of September
30, 2011, there were 202,400,000 shares loaned under the facilities. In October 2011, MS and UBS
returned the remaining 202,400,000 shares loaned. The returned shares were retired upon receipt and
will be removed from outstanding common stock in the fourth quarter of 2011.
Once borrowed shares are returned to us, they may not be re-borrowed under the share lending
agreements.
The shares we loaned to the share borrowers were issued and outstanding for corporate law
purposes through October 2011, and holders of borrowed shares (other than the share borrowers) had
the same rights under those shares as holders of any of our other outstanding common shares. Under
GAAP, the borrowed shares were not considered outstanding for the purpose of computing and
reporting our net income (loss) per common share.
We recorded interest expense related to the amortization of the costs associated with the
share-lending arrangement and other issuance costs of $1,276 and $2,555, respectively, for the
three months ended September 30, 2011 and 2010 and $6,727 and $7,473, respectively, for the nine
months ended September 30, 2011 and 2010. As of September 30, 2011, the unamortized balance of the
debt issuance costs was $42,961, with $42,101 recorded in deferred financing fees, net, and $859
recorded in long-term related party assets. As of December 31, 2010, the unamortized balance of
the debt issuance costs was $51,243, with $50,218 recorded in deferred financing fees, net, and
$1,025 recorded in long-term related party assets. As of September 30, 2011 and December 31, 2010,
the
estimated fair value of the remaining 202,400,000 loaned shares was approximately $305,624 and
$329,912, respectively. These costs will continue to be amortized until the debt is terminated.
In January 2004, SIRIUS signed a seven-year agreement with a sports programming provider which
expired in February 2011. Upon execution of this agreement, SIRIUS delivered 15,173,070 shares of
common stock valued at $40,967 to that programming provider. These shares of common stock were
subject to transfer restrictions which lapsed over time. We recognized share-based payment expense
associated with these shares of $0 and $1,641 in the three months ended September 30, 2011 and
2010, respectively, and $1,568 and $3,501 in the nine months ended September 30, 2011 and 2010,
respectively. As of September 30, 2011 and December 31, 2010, there was $0 and $1,568 remaining
balance of common stock value included in other current assets, respectively.
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
September 30, 2011 and December 31, 2010.
There were no shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”)
issued and outstanding as of September 30, 2011 and December 31, 2010.
There were 12,500,000 shares of Series B Preferred Stock issued and outstanding as of
September 30, 2011 and December 31, 2010. The Series B Preferred Stock is convertible into shares
of our common stock at the rate of 206.9581409 shares of common stock for each share of Series B
Preferred Stock, representing approximately 40% of our outstanding shares of common stock (after
giving effect to such conversion). As the holder of the Series B Preferred Stock, Liberty Radio LLC
is entitled to a number of votes equal to the number of shares of our common stock into which such
shares of Series B Preferred Stock are convertible. Liberty Radio LLC will also receive dividends
and distributions ratably with our common stock, on an as-converted basis. With respect to dividend
rights, the Series B Preferred Stock ranks evenly with our common stock and each other class or
series of our equity securities not expressly provided as ranking senior to the Series B Preferred
Stock. With respect to liquidation rights, the Series B Preferred Stock ranks evenly with each
other class or series of our equity securities not expressly provided as ranking senior to the
Series B Preferred Stock, and will rank senior to our common stock.
There were no shares of Preferred Stock, Series C Junior (the “Series C Junior Preferred
Stock”), issued and outstanding as of September 30, 2011 and December 31, 2010. In 2009, our board
of directors created and reserved for issuance in accordance with the Rights Plan (as described
below) 9,000 shares of the Series C Junior Preferred Stock. The shares of Series C Junior Preferred
Stock
are not redeemable and rank, with respect to the payment of dividends and the distribution of
assets, junior to all other series of our preferred stock, unless the terms of such series shall so
provide. The Rights Plan expired on August 1, 2011.
Warrants
We have issued warrants to purchase shares of common stock in connection with distribution,
programming and satellite purchase agreements and certain debt issuances. As of September 30, 2011,
approximately 24,346,000 warrants to acquire an equal number of shares of common stock with an
average exercise price of $2.96 per share were outstanding and fully vested and expire at various
times through 2015. During the nine months ended September 30, 2011, 1,575,000 of these warrants
expired.
In February 2011, Daimler AG exercised 16,500,000 warrants to purchase shares of common stock
on a net settlement basis, resulting in the issuance of 7,122,951 shares of our common stock.
Rights Plan
In April 2009, our board of directors adopted a rights plan. The terms of the rights and the
rights plan are set forth in a Rights Agreement dated as of April 29, 2009 (the “Rights Plan”). The
Rights Plan was intended to act as a deterrent to any person or group acquiring 4.9% or more of our
outstanding common stock (assuming for purposes of this calculation that all of our outstanding
convertible preferred stock is converted into common stock) without the approval of our board of
directors. The Rights Plan expired on August 1, 2011.
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