| Debt |
Debt
Sirius XM is the sole issuer of all of our debt, other than our 7% Exchangeable Senior Subordinated Notes due 2014. Our debt as of December 31, 2013 and 2012 consisted of the following:
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Carrying balance at December 31, |
Issuer |
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Issued |
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Debt |
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Maturity Date |
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Interest Payable |
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Principal Amount |
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2013 |
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2012 (h) |
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Sirius XM and Holdings
(a)(b)
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August 2008 |
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7% Exchangeable
Senior Subordinated Notes (the "Exchangeable Notes") |
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December 1, 2014 |
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semi-annually on June 1 and December 1 |
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$ |
502,370 |
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$ |
500,481 |
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$ |
545,888 |
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Sirius XM
(a)(c)(d) |
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March 2010 |
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8.75% Senior Notes
(the "8.75% Notes")
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April 1, 2015 |
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semi-annually on April 1 and October 1 |
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800,000 |
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— |
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792,944 |
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Sirius XM
(a)(c)(e) |
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October 2010 |
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7.625% Senior Notes
(the "7.625% Notes")
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November 1, 2018 |
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semi-annually on May 1 and November 1 |
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700,000 |
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— |
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690,353 |
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Sirius XM
(a)(c) |
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May 2013 |
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4.25% Senior Notes
(the "4.25% Notes")
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May 15, 2020 |
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semi-annually on May 15 and November 15 |
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500,000 |
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494,809 |
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— |
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Sirius XM
(a)(c) |
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September 2013 |
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5.875% Senior Notes
(the "5.875% Notes")
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October 1, 2020 |
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semi-annually on April 1 and October 1 |
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650,000 |
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642,914 |
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— |
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Sirius XM
(a)(c) |
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August 2013 |
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5.75% Senior Notes
(the "5.75% Notes")
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August 1, 2021 |
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semi-annually on February 1 and August 1 |
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600,000 |
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594,499 |
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— |
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Sirius XM
(a)(c) |
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August 2012 |
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5.25% Senior Notes
(the "5.25% Notes")
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August 15, 2022 |
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semi-annually on February 15 and August 15 |
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400,000 |
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394,648 |
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394,174 |
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Sirius XM
(a)(c) |
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May 2013 |
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4.625% Senior Notes
(the "4.625% Notes")
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May 15, 2023 |
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semi-annually on May15 and November 15 |
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500,000 |
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494,653 |
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— |
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Sirius XM
(f) |
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December 2012 |
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Senior Secured Revolving Credit Facility (the "Credit Facility") |
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December 5, 2017 |
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variable fee paid quarterly |
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1,250,000 |
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460,000 |
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— |
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Sirius XM |
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Various |
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Capital leases |
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Various |
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n/a |
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n/a |
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19,591 |
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11,861 |
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Total Debt |
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3,601,595 |
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2,435,220 |
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Less: total current maturities (g) |
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507,774 |
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4,234 |
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Total long-term |
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3,093,821 |
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2,430,986 |
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Less: long-term related party |
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— |
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208,906 |
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Total long-term, excluding related party |
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$ |
3,093,821 |
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$ |
2,222,080 |
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(a) |
The carrying balance of the Notes are net of the remaining unamortized original issue discount. |
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(b) |
The Exchangeable Notes are senior subordinated obligations and rank junior in right of payment to our existing and future senior debt and equally in right of payment with our existing and future senior subordinated debt. Substantially all of our domestic wholly-owned subsidiaries guarantee our obligations under these Notes on a senior subordinated basis. The Exchangeable Notes are exchangeable at any time at the option of the holder into shares of our common stock at an exchange rate of 543.1372 shares of common stock per $1,000 principal amount of the notes, which is equivalent to an approximate exchange price of $1.841 per share of common stock. In connection with the fundamental change that occurred on January 17, 2013 and the subsequent offer that was made to each holder of the Exchangeable Notes on February 1, 2013, $47,630 in principal amount of the Exchangeable Notes were converted resulting in the issuance of 27,687,850 shares of our common stock. As a result of this conversion, we retired $47,630 in principal amount of the Exchangeable Notes and recognized a proportionate share of unamortized discount and deferred financing fees of $2,533 to Additional paid-in capital for the year ended December 31, 2013. No loss was recognized as a result of the conversion. During the year ended December 31, 2013, the common stock reserved for conversion in connection with the Exchangeable Notes were considered to be anti-dilutive in our calculation of diluted net income per share. During the year ended 2012, the Exchangeable Notes were considered to be dilutive.
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(c) |
Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes. |
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(d) |
During the year ended December 31, 2013, we purchased $800,000 in aggregate principal amount of the 8.75% Notes for an aggregate purchase price, including premium and interest, of $927,860. We recognized an aggregate loss on the extinguishment of the 8.75% Notes of $104,818 during the year ended December 31, 2013, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net.
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(e) |
During the year ended December 31, 2013, we purchased $700,000 in aggregate principal amount of the 7.625% Notes for an aggregate purchase price, including premium and interest, of $797,830. We recognized an aggregate loss on the extinguishment of the 7.625% Notes of $85,759 during the year ended December 31, 2013, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net.
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(f) |
In December 2012, Sirius XM entered into a five-year Credit Facility with a syndicate of financial institutions for $1,250,000. Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries. Borrowings under the Credit Facility are used for working capital and other general corporate purposes, including dividends, financing of acquisitions and share repurchases. Interest on borrowings is payable on a quarterly basis and accrues at a rate based on LIBOR plus an applicable rate. Sirius XM is also required to pay a variable fee on the average daily unused portion of the Credit Facility which is currently 0.35% per annum and is payable on a quarterly basis. As of December 31, 2013, $790,000 was available for future borrowing under the Credit Facility. Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our consolidated balance sheet as of December 31, 2013 due to the long-term maturity of this debt.
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(g) |
This balance includes $10,959 in related party current maturities as of December 31, 2013.
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(h) |
During the year ended December 31, 2012, we purchased $257,000 of our then outstanding 9.75% Senior Secured Notes due 2015 (the "9.75% Notes") for an aggregate purchase price, including interest, of $281,698. We recognized an aggregate loss on the extinguishment of the 9.75% Notes of $22,184 during the year ended December 31, 2012, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net. During the year ended December 31, 2012, we purchased $778,500 of our then outstanding 13% Senior Notes due 2013 (the "13% Notes") for an aggregate purchase price, including interest, of $879,133. We recognized an aggregate loss on the extinguishment of these 13% Notes of $110,542 during the year ended December 31, 2012, consisting primarily of unamortized discount, deferred financing fees and repayment premium, to Loss on extinguishment of debt and credit facilities, net.
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The following table reconciles total current debt held at Holdings to the total current and long-term debt held at Sirius XM as of December 31, 2013:
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Carrying amount at December 31, 2013 |
Total current debt at Holdings |
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$ |
507,774 |
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Additional fair value associated with the Exchangeable Notes (a)
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466,815 |
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Total current debt at Sirius XM |
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$ |
974,589 |
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Total long-term debt |
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$ |
3,093,821 |
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Total debt at Sirius XM |
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$ |
4,068,410 |
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(a)
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In connection with our corporate reorganization in November 2013, the Exchangeable Notes were amended such that the settlement of the conversion feature is into shares of Holdings' common stock and Holdings and Sirius XM became co-obligors with respect to the Exchangeable Notes. As of December 31, 2013, $466,815 was recorded to Sirius XM's consolidated balance sheet in Current maturities of long-term debt for the fair value of the Exchangeable Notes in excess of the carrying amount. Changes in fair value are recorded in Loss on fair value of debt and equity instruments within Sirius XM's consolidated statements of comprehensive income. We recognized $466,815 in Loss on fair value of debt and equity instruments during the year ended December 31, 2013. The additional fair value in excess of the carrying amount of this instrument is eliminated in Holdings' consolidated balance sheets and statements of comprehensive income.
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Covenants and Restrictions
The Exchangeable Notes require compliance with certain covenants that restrict Holdings' and Sirius XM's ability to, among other things, (i) enter into certain transactions with affiliates and (ii) merge or consolidate with another person.
Under the Credit Facility, Sirius XM must comply with a maintenance covenant that it not exceed a total leverage ratio, calculated as total consolidated debt to consolidated operating cash flow, of 5.0 to 1.0. The Credit Facility and the 5.25% Notes generally require 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 4.25% Notes, 4.625% Notes, 5.75% Notes and 5.875% Notes are subject to 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. In addition, each of these indentures restricts 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.
Under our 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 December 31, 2013 and 2012, we were in compliance with our debt covenants.
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