NEW YORK, April 24, 2014 /PRNewswire/ -- SiriusXM announced first quarter 2014 financial and operating results, including revenue of $998 million, up 11% from the first quarter 2013 revenue of $897 million. Earnings per diluted share were $0.02 in both the first quarter of 2014 and 2013.

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Net income of $94 million, adjusted for a non-recurring item associated with accounting for the Liberty Media stock repurchase agreement and purchase price accounting adjustments from the Sirius and XM merger, net of taxes, resulted in adjusted net income of $121 million, a 46% increase over $83 million in last year's first quarter. Adjusted EBITDA for the first quarter of 2014 reached a record $335 million, up 28% from $262 million in the first quarter of 2013.

"SiriusXM performed ahead of our expectations in the first quarter, with 266,799 net subscriber additions including 173,480 self-pay net additions. For the ninth consecutive quarter we grew revenue at a double digit pace, and once again we set a new quarterly record for adjusted EBITDA and adjusted EBITDA margin. Free cash flow grew 56% compared to the prior year to a new first quarter record, and we resumed our stock repurchase program, helping to drive free cash flow per share up 64%," stated Jim Meyer, Chief Executive Officer, SiriusXM.

"Our business continues to perform well. New car installations and trial conversions set first quarter records, and our trial funnel stands near an all-time high at 6.9 million. We are excited about this year's strong growth of subscribers, revenue, adjusted EBITDA, and free cash flow, and we are eager to continue deploying our capital to benefit our stockholders and grow free cash flow per share even faster," added Meyer.

Additional highlights of the first quarter include:


    --  Subscribers Reach a Record 25.8 Million.  Net subscriber additions in
        the first quarter of 2014 were 266,799.  The total paid subscriber base
        reached a record 25.8 million, up 6% from the prior-year period. 
        Self-pay net subscriber additions were 173,480, while the self-pay
        subscriber base reached a record high of 21.3 million, up 7% from the
        prior-year period. Total paid and unpaid trials were 6.9 million at the
        end of the first quarter of 2014.
    --  Adjusted EBITDA and Adjusted EBITDA Margin Reach New Record Highs. 
        Adjusted EBITDA climbed 28% from the first quarter of 2013 to a record
        quarterly figure of $335 million, and the Company's adjusted EBITDA
        margin reached a record 33.5% in the first quarter of 2014.
    --  Free Cash Flow Per Share Climbs 64%.  Free cash flow in the first
        quarter of 2014 was $223 million, up 56% from $142 million in the first
        quarter of 2013.  Free cash flow per diluted share was 3.6 cents in the
        first quarter of 2014, up 64% from 2.2 cents in the first quarter of
        2013.

"Last year we took steps to lower our average cost of debt, and this year we have focused our efforts on significantly increasing our flexibility to return capital to stockholders by eliminating covenants in our 5.25% Notes and increasing the threshold for restricted payments in our Credit Facility," said David Frear, SiriusXM's Executive Vice President and Chief Financial Officer.

"Tomorrow, we are scheduled to repurchase 93 million shares from Liberty Media for $340 million, bringing total share repurchases for the year to 158 million shares for $550 million and leaving us with $1.7 billion remaining under our share repurchase authorization. Total debt to adjusted EBITDA at the end of the first quarter 2014 was 2.8 times, below our 4.0 times leverage target. We expect to opportunistically tap the debt markets this year as we move towards our leverage target," added Frear.

2014 GUIDANCE

SiriusXM reaffirmed its previously issued guidance for 2014:


    --  Net subscriber additions of approximately 1.25 million,
    --  Revenue of over $4.0 billion,
    --  Adjusted EBITDA of approximately $1.38 billion, and
    --  Free cash flow approaching $1.1 billion.


FIRST QUARTER 2014 RESULTS


                   SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                  (UNAUDITED)


                                                 For the Three Months Ended March 31,
                                                 ------------------------------------

    (in thousands,
     except per
     share data)                                             2014                         2013
                                                             ----                         ----

    Revenue:

    Subscriber
     revenue                                             $851,436                     $783,342

    Advertising
     revenue                                               22,214                       20,211

    Equipment
     revenue                                               23,978                       18,156

    Other revenue                                         100,083                       75,689
                                                          -------                       ------

    Total revenue                                         997,711                      897,398

    Operating expenses:

    Cost of services:

    Revenue share
     and royalties                                        195,411                      148,531

    Programming and
     content                                               74,870                       74,610

    Customer
     service and
     billing                                               91,069                       80,394

    Satellite and
     transmission                                          21,380                       19,695

    Cost of
     equipment                                              7,804                        7,027

    Subscriber
     acquisition
     costs                                                123,022                      116,111

    Sales and
     marketing                                             76,327                       65,899

    Engineering,
     design and
     development                                           15,911                       14,842

    General and
     administrative                                        76,243                       56,340

    Depreciation
     and
     amortization                                          68,267                       67,018

    Total operating
     expenses                                             750,304                      650,467
                                                          -------                      -------

    Income from
     operations                                           247,407                      246,931

    Other income (expense):

    Interest
     expense, net
     of amounts
     capitalized                                          (54,092)                     (46,174)

    Interest and
     investment
     income                                                 4,349                        1,638

    Loss on change
     in value of
     derivatives                                          (27,023)                           -

    Other income                                               95                          247

    Total other
     expense                                              (76,671)                     (44,289)
                                                          -------                      -------

    Income before
     income taxes                                         170,736                      202,642

    Income tax
     expense                                              (76,748)                     (79,040)

    Net income                                            $93,988                     $123,602
                                                          =======                     ========

     Foreign
      currency
      translation
      adjustment,
      net of tax                                              118                         (172)

    Total
     comprehensive
     income                                               $94,106                     $123,430
                                                          =======                     ========

    Net income per common share:

    Basic                                                   $0.02                        $0.02
                                                            =====                        =====

    Diluted                                                 $0.02                        $0.02
                                                            =====                        =====

    Weighted average common shares outstanding:

    Basic                                               6,094,784                    6,259,803
                                                        =========                    =========

    Diluted                                             6,173,848                    6,606,276
                                                        =========                    =========




                                                                                       SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

                                                                                              CONSOLIDATED BALANCE SHEETS

                                                                                                                  As of March 31,             As of December 31,
                                                                                                                  ---------------             ------------------

                                                                                                                                        2014                           2013
                                                                                                                                        ----                           ----

    (in thousands, except share and per share data)                                                                 (Unaudited)

                                                  ASSETS

    Current assets:

    Cash and cash equivalents                                                                                                       $121,171                       $134,805

    Accounts receivable, net                                                                                                         103,872                        103,937

    Receivables from distributors                                                                                                     89,486                         88,975

    Inventory, net                                                                                                                    18,987                         13,863

    Prepaid expenses                                                                                                                 123,239                        110,530

    Related party current assets                                                                                                       5,143                          9,145

    Deferred tax asset                                                                                                               896,386                        937,598

    Other current assets                                                                                                              19,501                         20,160
                                                                                                                                      ------                         ------

    Total current assets                                                                                                           1,377,785                      1,419,013

    Property and equipment, net                                                                                                    1,571,460                      1,594,574

    Long-term restricted investments                                                                                                   5,718                          5,718

    Deferred financing fees, net                                                                                                      11,988                         12,604

    Intangible assets, net                                                                                                         2,685,978                      2,700,062

    Goodwill                                                                                                                       2,203,409                      2,204,553

    Related party long-term assets                                                                                                    33,663                         30,164

    Long-term deferred tax asset                                                                                                     834,663                        868,057

    Other long-term assets                                                                                                             9,511                         10,035

    Total assets                                                                                                                  $8,734,175                     $8,844,780
                                                                                                                                  ==========                     ==========

                                   LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Accounts payable and accrued expenses                                                                                           $558,756                       $578,333

    Accrued interest                                                                                                                  57,376                         42,085

    Current portion of deferred revenue                                                                                            1,623,668                      1,586,611

    Current portion of deferred credit on executory contracts                                                                          3,672                          3,781

    Current maturities of long-term debt                                                                                             497,516                        496,815

    Current maturities of long-term related party debt                                                                                10,970                         10,959

    Related party current liabilities                                                                                                 47,536                         20,320
                                                                                                                                      ------                         ------

    Total current liabilities                                                                                                      2,799,494                      2,738,904

    Deferred revenue                                                                                                                 146,830                        149,026

    Deferred credit on executory contracts                                                                                               558                          1,394

    Long-term debt                                                                                                                 2,943,202                      3,093,821

    Related party long-term liabilities                                                                                               15,627                         16,337

    Other long-term liabilities                                                                                                      103,051                         99,556

    Total liabilities                                                                                                              6,008,762                      6,099,038
                                                                                                                                   ---------                      ---------

    Stockholders' equity:

    Preferred stock, undesignated, par value $0.001 (liquidation preference of $0.001
     per share); 50,000,000 shares authorized and 0 shares issued and outstanding at
     March 31, 2014 and December 31, 2013                                                                                                  -                              -

    Common stock, par value $0.001; 9,000,000,000 shares authorized; 6,073,791,343 and
     6,096,220,526 shares issued; 6,058,791,343 and 6,096,220,526 outstanding, at
     March 31, 2014 and December 31, 2013, respectively                                                                                6,074                          6,096

    Accumulated other comprehensive loss, net of tax                                                                                    (190)                          (308)

    Additional paid-in capital                                                                                                     8,607,329                      8,674,129

    Treasury stock, at cost; 15,000,000 and 0 shares of common stock at March 31, 2014
     and December 31, 2013, respectively                                                                                             (47,613)                             -

    Accumulated deficit                                                                                                           (5,840,187)                    (5,934,175)
                                                                                                                                  ----------                     ----------

    Total stockholders' equity                                                                                                     2,725,413                      2,745,742
                                                                                                                                   ---------                      ---------

    Total liabilities and stockholders' equity                                                                                    $8,734,175                     $8,844,780
                                                                                                                                  ==========                     ==========


                                         SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                       (UNAUDITED)

                                                                                      For the Three Months Ended March 31,
                                                                                      ------------------------------------

    (in thousands)                                                                                     2014                    2013
                                                                                                       ----                    ----

    Cash flows from operating activities:

    Net income                                                                                      $93,988                $123,602

    Adjustments to reconcile net income to net cash provided by operating activities:

    Depreciation and amortization                                                                    68,267                  67,018

    Non-cash interest expense,
     net of amortization of
     premium                                                                                          5,231                   5,442

    Provision for doubtful
     accounts                                                                                        10,634                  11,410

    Amortization of deferred
     income related to equity
     method investment                                                                                 (694)                   (694)

    Gain on unconsolidated entity
     investments, net                                                                                (4,326)                 (1,345)

    Dividend received from
     unconsolidated entity
     investment                                                                                       4,222                   9,674

    Loss on disposal of assets                                                                          196                     124

    Loss on change in value of
     derivatives                                                                                     27,023                       -

    Share-based payment expense                                                                      18,240                  14,518

    Deferred income taxes                                                                            74,565                  83,631

    Other non-cash purchase price
     adjustments                                                                                       (945)                (70,459)

    Changes in operating assets and liabilities:

    Accounts receivable                                                                             (10,569)                (13,143)

    Receivables from distributors                                                                      (511)                  1,663

    Inventory                                                                                        (5,124)                  5,242

    Related party assets                                                                                654                      26

    Prepaid expenses and other
     current assets                                                                                 (15,682)                (51,815)

    Other long-term assets                                                                              522                   1,730

    Accounts payable and accrued
     expenses                                                                                       (68,168)                (97,537)

    Accrued interest                                                                                 15,291                  31,054

    Deferred revenue                                                                                 34,861                  47,480

    Related party liabilities                                                                           177                   5,891

    Other long-term liabilities                                                                       3,538                  (4,597)

    Net cash provided by operating
     activities                                                                                     251,390                 168,915
                                                                                                    -------                 -------


    Cash flows from investing activities:

    Additions to property and
     equipment                                                                                      (28,601)                (26,434)

    Acquisition of business, net
     of cash acquired                                                                                 1,144                       -

    Net cash used in investing
     activities                                                                                     (27,457)                (26,434)
                                                                                                    -------                 -------


    Cash flows from financing activities:

    Proceeds from exercise of
     stock options                                                                                      259                  10,946

    Taxes paid in lieu of shares
     issued for stock-based
     compensation                                                                                    (4,229)                      -

    Repayment of long-term
     borrowings and revolving
     credit facility                                                                               (152,528)                 (1,933)

    Common stock repurchased and
     retired                                                                                        (81,069)               (465,712)

    Net cash used in financing
     activities                                                                                    (237,567)               (456,699)
                                                                                                   --------                --------

    Net decrease in cash and cash
     equivalents                                                                                    (13,634)               (314,218)

    Cash and cash equivalents at
     beginning of period                                                                            134,805                 520,945

    Cash and cash equivalents at
     end of period                                                                                 $121,171                $206,727
                                                                                                   ========                ========

Key Operating Metrics

The following table contains our key operating metrics for the three months ended March 31, 2014 and 2013, respectively. Subscribers to our connected vehicle services are not included in our subscriber count:



                                       Unaudited
                                       ---------

                         For the Three Months Ended March 31,
                         ------------------------------------

    (in thousands,
     except subscriber,
     per subscriber and
     per installation
     amounts)                             2014                      2013
                                          ----                      ----


       Self-pay                     21,255,297                19,874,660

       Paid promotional              4,570,812                 4,478,566

    Ending subscribers              25,826,109                24,353,226
                                    ==========                ==========


       Self-pay                        173,480                   304,386

       Paid promotional                 93,319                   148,504

    Net additions                      266,799                   452,890
                                       =======                   =======


    Daily weighted
     average number of
     subscribers                    25,602,139                24,008,472
                                    ==========                ==========


    Average self-pay
     monthly churn                         1.9%                      2.0%
                                           ===                       ===


    New vehicle consumer
     conversion rate                        42%                       44%
                                           ===                       ===


    ARPU                                $12.18                    $12.05

    SAC, per
     installation                          $35                       $47

    Customer service and
     billing expenses,
     per average
     subscriber                          $1.09                     $1.11

    Free cash flow                    $222,789                  $142,481

    Adjusted EBITDA                   $334,782                  $261,871

Glossary

Adjusted EBITDA - EBITDA is defined as net income before interest and investment income (loss); interest expense, net of amounts capitalized; income tax expense and depreciation and amortization. We adjust EBITDA to exclude the impact of other income and expense, loss on extinguishment of debt, loss on change in value of derivatives as well as certain other charges discussed below. This measure is one of the primary Non-GAAP financial measures on which we (i) evaluate the performance of our businesses, (ii) base our internal budgets and (iii) compensate management. Adjusted EBITDA is a Non-GAAP financial performance measure that excludes (if applicable): (i) certain adjustments as a result of the purchase price accounting for the merger of Sirius and XM, (ii) depreciation and amortization and (iii) share-based payment expense. The purchase price accounting adjustments include: (i) the elimination of deferred revenue associated with the investment in XM Canada, (ii) recognition of deferred subscriber revenues not recognized in purchase price accounting, and (iii) elimination of the benefit of deferred credits on executory contracts, which are primarily attributable to third party arrangements with an OEM and programming providers. We believe adjusted EBITDA is a useful measure of the underlying trend of our operating performance, which provides useful information about our business apart from the costs associated with our physical plant, capital structure and purchase price accounting. We believe investors find this Non-GAAP financial measure useful when analyzing our results and comparing our operating performance to the performance of other communications, entertainment and media companies. We believe investors use current and projected adjusted EBITDA to estimate our current and prospective enterprise value and to make investment decisions. Because we fund and build-out our satellite radio system through the periodic raising and expenditure of large amounts of capital, our results of operations reflect significant charges for depreciation expense. The exclusion of depreciation and amortization expense is useful given significant variation in depreciation and amortization expense that can result from the potential variations in estimated useful lives, all of which can vary widely across different industries or among companies within the same industry. We also believe the exclusion of share-based payment expense is useful given the significant variation in expense that can result from changes in the fair value as determined using the Black-Scholes-Merton model which varies based on assumptions used for the expected life, expected stock price volatility and risk-free interest rates.

Adjusted EBITDA has certain limitations in that it does not take into account the impact to our statements of comprehensive income of certain expenses, including share-based payment expense and certain purchase price accounting for the merger of Sirius and XM. We endeavor to compensate for the limitations of the Non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the Non-GAAP measure. Investors that wish to compare and evaluate our operating results after giving effect for these costs, should refer to net income as disclosed in our consolidated statements of comprehensive income. Since adjusted EBITDA is a Non-GAAP financial performance measure, our calculation of adjusted EBITDA may be susceptible to varying calculations; may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. The reconciliation of net income to the adjusted EBITDA is calculated as follows (in thousands):



                                    Unaudited
                                    ---------

                          For the Three Months Ended March 31,
                          ------------------------------------

                                      2014                         2013
                                      ----                         ----


    Net income (GAAP):             $93,988                     $123,602

    Add back items
     excluded from
     Adjusted EBITDA:

    Purchase price
     accounting
     adjustments:

    Revenues                         1,813                        1,813

    Operating expenses                (945)                     (68,409)

    Share-based payment
     expense (GAAP)                 18,240                       14,518

    Depreciation and
     amortization (GAAP)            68,267                       67,018

    Interest expense, net
     of amounts
     capitalized (GAAP)             54,092                       46,174

    Interest and
     investment income
     (GAAP)                         (4,349)                      (1,638)

    Loss on change in
     value of derivatives
     (GAAP)                         27,023                            -

    Other income (GAAP)                (95)                        (247)

    Income tax expense
     (GAAP)                         76,748                       79,040

    Adjusted EBITDA               $334,782                     $261,871
                                  ========                     ========

Adjusted Net Income - We define this Non-GAAP financial measure as our actual net income adjusted to exclude the impact of certain purchase price accounting adjustments and the loss on change in value of derivatives, net of income tax expense. The following table reconciles our actual income before income taxes to our adjusted net income for the three months ended March 31, 2014 and 2013 (in thousands):


                                     Unaudited
                                     ---------

                           For the Three Months Ended March 31,
                           ------------------------------------

                                       2014                         2013
                                       ----                         ----


    Income before income
     taxes (GAAP):                 $170,736                     $202,642

    Add back items
     excluded from
     adjusted net income:

    Purchase price
     accounting
     adjustments:

    Revenues                          1,813                        1,813

    Operating expenses                 (945)                     (68,409)

    Loss on change in
     value of derivatives
     (GAAP)                          27,023                            -

    Adjusted income before
     income taxes                  $198,627                     $136,046

    Allocable income tax
     expense                        (77,266)                     (53,058)

    Adjusted net income            $121,361                      $82,988
                                   ========                      =======

Adjusted Revenues and Operating Expenses - We define this Non-GAAP financial measure as our actual revenues and operating expenses adjusted to exclude the impact of certain purchase price accounting adjustments from the merger of Sirius and XM and share-based payment expense. We use this Non-GAAP financial measure to manage our business, to set operational goals and as a basis for determining performance-based compensation for our employees. The following tables reconcile our actual revenues and operating expenses to our adjusted revenues and operating expenses for the three months ended March 31, 2014 and 2013:




                                        Unaudited For the Three Months Ended March 31, 2014
                                        ---------------------------------------------------

    (in thousands)                                   As Reported                            Purchase Price         Allocation of                   Adjusted

                                                                                              Accounting            Share-based

                                                                                             Adjustments          Payment Expense
                                                                                             -----------          ---------------


    Revenue:

    Subscriber revenue                                                   $851,436             $                 -     $                         -           $851,436

    Advertising revenue                                                    22,214                               -                               -             22,214

    Equipment revenue                                                      23,978                               -                               -             23,978

    Other revenue                                                         100,083                           1,813                               -            101,896

    Total revenue                                                        $997,711                          $1,813     $                         -           $999,524
                                                                         ========                          ======     ===========================           ========

    Operating expenses

    Cost of services:

    Revenue share and royalties                                          $195,411             $                 -     $                         -           $195,411

    Programming and content                                                74,870                             945                          (2,215)            73,600

    Customer service and billing                                           91,069                               -                            (577)            90,492

    Satellite and transmission                                             21,380                               -                            (946)            20,434

    Cost of equipment                                                       7,804                               -                               -              7,804

    Subscriber acquisition costs                                          123,022                               -                               -            123,022

    Sales and marketing                                                    76,327                               -                          (3,566)            72,761

    Engineering, design and development                                    15,911                               -                          (1,926)            13,985

    General and administrative                                             76,243                               -                          (9,010)            67,233

    Depreciation and amortization (a)                                      68,267                               -                               -             68,267

    Share-based payment expense                                                 -                               -                          18,240             18,240

    Total operating expenses                                             $750,304                            $945     $                         -           $751,249
                                                                         ========                            ====     ===========================           ========


    (a) Purchase price accounting
     adjustments included above
     exclude the incremental
     depreciation and amortization
     associated with the $785,000
     stepped up basis in property,
     equipment and intangible
     assets as a result of the
     merger of Sirius and XM. The
     increased depreciation and
     amortization for the three
     months ended March 31, 2014
     was $10,000.




                                        Unaudited For the Three Months Ended March 31, 2013
                                        ---------------------------------------------------

    (in thousands)                                   As Reported                            Purchase Price          Allocation of                   Adjusted

                                                                                              Accounting             Share-based

                                                                                             Adjustments           Payment Expense
                                                                                             -----------           ---------------


    Revenue:

    Subscriber revenue                                                   $783,342             $                  -     $                         -           $783,342

    Advertising revenue                                                    20,211                                -                               -             20,211

    Equipment revenue                                                      18,156                                -                               -             18,156

    Other revenue                                                          75,689                            1,813                               -             77,502

    Total revenue                                                        $897,398                           $1,813     $                         -           $899,211
                                                                         ========                           ======     ===========================           ========

    Operating expenses

    Cost of services:

    Revenue share and royalties                                          $148,531                          $39,761     $                         -           $188,292

    Programming and content                                                74,610                            2,478                          (1,642)            75,446

    Customer service and billing                                           80,394                                -                            (470)            79,924

    Satellite and transmission                                             19,695                                -                            (850)            18,845

    Cost of equipment                                                       7,027                                -                               -              7,027

    Subscriber acquisition costs                                          116,111                           22,005                               -            138,116

    Sales and marketing                                                    65,899                            4,165                          (3,061)            67,003

    Engineering, design and development                                    14,842                                -                          (1,647)            13,195

    General and administrative                                             56,340                                -                          (6,848)            49,492

    Depreciation and amortization (a)                                      67,018                                -                               -             67,018

    Share-based payment expense                                                 -                                -                          14,518             14,518

    Total operating expenses                                             $650,467                          $68,409     $                         -           $718,876
                                                                         ========                          =======     ===========================           ========


    (a) Purchase price accounting
     adjustments included above
     exclude the incremental
     depreciation and amortization
     associated with the $785,000
     stepped up basis in property,
     equipment and intangible
     assets as a result of the
     merger of Sirius and XM. The
     increased depreciation and
     amortization for the three
     months ended March 31, 2013
     was $13,000.

ARPU - is derived from total earned subscriber revenue, advertising revenue and other subscription-related revenue, excluding revenue associated with our connected vehicle business, net of purchase price accounting adjustments, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. Other subscription-related revenue includes the U.S. Music Royalty Fee. ARPU is calculated as follows (in thousands, except for subscriber and per subscriber amounts):



                                              Unaudited
                                              ---------

                                       For the Three Months Ended
                                               March 31,
                                      ---------------------------

                                                2014                     2013
                                                ----                     ----


    Subscriber revenue, excluding
     connected vehicle (GAAP)               $832,804                 $783,342

    Add: advertising revenue (GAAP)           22,214                   20,211

    Add: other subscription-related
     revenue (GAAP)                           80,768                   64,137

                                            $935,786                 $867,690
                                            ========                 ========


    Daily weighted average number of
     subscribers                          25,602,139               24,008,472
                                          ==========               ==========


    ARPU                                      $12.18                   $12.05
                                              ======                   ======

Average self-pay monthly churn - is defined as the monthly average of self-pay deactivations for the period divided by the average number of self-pay subscribers for the period.

Customer service and billing expenses, per average subscriber - is derived from total customer service and billing expenses, excluding connected vehicle customer service and billing expenses and share-based payment expense, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. We believe the exclusion of share-based payment expense in our calculation of customer service and billing expenses, per average subscriber, is useful given the significant variation in expense that can result from changes in the fair market value of our common stock, the effect of which is unrelated to the operational conditions that give rise to variations in the components of our customer service and billing expenses. Customer service and billing expenses, per average subscriber, is calculated as follows (in thousands, except for subscriber and per subscriber amounts):



                                             Unaudited
                                             ---------

                                    For the Three Months Ended

                                             March 31,
                                             ---------

                                              2014                       2013
                                              ----                       ----


    Customer service and billing
     expenses, excluding connected
     vehicle (GAAP)                        $84,103                    $80,394

    Less: share-based payment
     expense (GAAP)                           (577)                      (470)

                                           $83,526                    $79,924
                                           =======                    =======


    Daily weighted average number
     of subscribers                     25,602,139                 24,008,472
                                        ==========                 ==========


    Customer service and billing
     expenses, per average
     subscriber                              $1.09                      $1.11
                                             =====                      =====

Free cash flow - is derived from cash flow provided by operating activities, capital expenditures and restricted and other investment activity. The calculation for free cash flow and free cash flow per diluted share are as follows (in thousands, except per share data):



                                              Unaudited
                                              ---------

                                     For the Three Months Ended

                                              March 31,
                                              ---------

                                               2014                  2013
                                               ----                  ----


    Cash Flow information

    Net cash provided by operating
     activities                            $251,390              $168,915

    Net cash used in investing
     activities                            $(27,457)             $(26,434)

    Net cash used in financing
     activities                           $(237,567)            $(456,699)

    Free Cash Flow

    Net cash provided by operating
     activities                            $251,390              $168,915

    Additions to property and
     equipment                              (28,601)              (26,434)

    Free cash flow                         $222,789              $142,481
                                           ========              ========


    Diluted weighted average common
     shares outstanding                   6,173,848             6,606,276
                                          =========             =========


    Free cash flow per diluted share          $0.04                 $0.02
                                              =====                 =====

New vehicle consumer conversion rate - is defined as the percentage of owners and lessees of new vehicles that receive our satellite radio service and convert to become self-paying subscribers after the initial promotion period. At the time satellite radio enabled vehicles are sold or leased, the owners or lessees generally receive trial subscriptions ranging from three to twelve months. Promotional periods generally include the period of trial service plus 30 days to handle the receipt and processing of payments. We measure conversion rate three months after the period in which the trial service ends. The metric excludes rental and fleet vehicles.

Subscriber acquisition cost, per installation - or SAC, per installation, is derived from subscriber acquisition costs and margins from the sale of radios and accessories, excluding purchase price accounting adjustments, divided by the number of satellite radio installations in new vehicles and shipments of aftermarket radios for the period. Purchase price accounting adjustments associated with the merger of Sirius and XM include the elimination of the benefit of amortization of deferred credits on executory contracts recognized at the merger date attributable to an OEM. SAC, per installation, is calculated as follows (in thousands, except for installation amounts):



                                            Unaudited
                                            ---------

                                   For the Three Months Ended

                                            March 31,
                                            ---------

                                             2014                  2013
                                             ----                  ----


    Subscriber acquisition costs
     (GAAP)                              $123,022              $116,111

    Less: margin from direct sales
     of radios and accessories
     (GAAP)                               (16,174)              (11,129)

    Add: purchase price accounting
     adjustments                                -                22,005

                                         $106,848              $126,987
                                         ========              ========


    Installations                       3,078,510             2,710,893
                                        =========             =========


    SAC, per installation                     $35                   $47
                                              ===                   ===

About SiriusXM

Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world's largest radio broadcaster measured by revenue and has 25.8 million subscribers. SiriusXM creates and broadcasts commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and the most comprehensive Latin music, sports and talk programming in radio. SiriusXM is available in vehicles from every major car company in the U.S. and from retailers nationwide as well as at shop.siriusxm.com. SiriusXM programming is available through the SiriusXM Internet Radio App for smartphones and other connected devices as well as online at siriusxm.com. SiriusXM also provides premium traffic, weather, data and information services for subscribers in cars, trucks, RVs, boats and aircraft through SiriusXM Traffic(TM), SiriusXM Travel Link, NavTraffic®, NavWeather(TM), SiriusXM Aviation, SiriusXM Marine(TM), Sirius Marine Weather, XMWX Aviation(TM), and XMWX Marine(TM). SiriusXM holds a minority interest in SiriusXM Canada which has more than 2 million subscribers.

On social media, join the SiriusXM community on Facebook, Twitter, Instagram, and YouTube.

This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results may differ materially from the results anticipated in these forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: our competitive position versus other radio and audio entertainment providers; our ability to attract and retain subscribers, which is uncertain; our dependence upon the auto industry; general economic conditions; failure of our satellites, which, in most cases, are not insured; the interruption or failure of our information and communications systems; the security of the personal information about our customers; royalties we pay for music rights, which increase over time; the unfavorable outcome of pending or future litigation; our failure to realize benefits of acquisitions; rapid technological and industry change; failure of third parties to perform; changes in consumer protection laws and their enforcement; failure to comply with FCC requirements and other government regulations; and our indebtedness. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our Annual Report on Form 10-K for the year ended December 31, 2013, which is filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this communication.

E-SIRI

Contact Information for Investors and Financial Media:

Investors:

Hooper Stevens
212 901 6718
hooper.stevens@siriusxm.com

Media:

Patrick Reilly
212 901 6646
patrick.reilly@siriusxm.com

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SOURCE Sirius XM Holdings Inc.