10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2018

OR

o	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.)
1290 Avenue of the Americas, 11th Floor
New York, New York	10104
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 584-5100

Former name, former address and former fiscal year, if changed since last report: Not Applicable

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  þ        No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  þ        No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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 þ	Accelerated filer o		Non-accelerated filer o
		(Do not check if a smaller reporting company)
Smaller reporting company o	Emerging growth company o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

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 July 23, 2018)
COMMON STOCK, $0.001 PAR VALUE	4,488,104,672	SHARES

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

Item No.	Description
	PART I - Financial Information
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017	2
	Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017	3
	Consolidated Statement of Stockholders' (Deficit) Equity for the six months ended June 30, 2018	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017	5
	Notes to the Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	43
Item 4.	Controls and Procedures	43
	PART II - Other Information
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	46
	Signatures	48

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(in thousands, except per share data)	2018			2017			2018			2017
Revenue:
Subscriber revenue	$	1,138,962		$	1,111,011		$	2,256,046		$	2,189,268
Advertising revenue	47,242			40,178			89,290			76,194
Equipment revenue	36,840			29,674			71,929			59,332
Music royalty fee and other revenue	209,255			166,706			390,136			316,841
Total revenue	1,432,299			1,347,569			2,807,401			2,641,635
Operating expenses:
Cost of services:
Revenue share and royalties	404,284			292,893			714,416			570,193
Programming and content	105,650			96,255			206,486			191,799
Customer service and billing	95,582			95,324			189,447			192,099
Satellite and transmission	23,478			19,603			46,200			40,179
Cost of equipment	7,674			9,371			14,771			16,283
Subscriber acquisition costs	119,778			125,154			242,471			252,642
Sales and marketing	119,435			106,707			226,146			203,616
Engineering, design and development	27,485			27,783			58,122			51,600
General and administrative	92,683			84,607			177,289			162,808
Depreciation and amortization	74,623			73,519			146,835			150,223
Total operating expenses	1,070,672			931,216			2,022,183			1,831,442
Income from operations	361,627			416,353			785,218			810,193
Other income (expense):
Interest expense	(86,917		)	(82,794		)	(176,706		)	(164,451		)
Other income (expense)	88,212			(11,937		)	124,100			(3,074		)
Total other income (expense)	1,295			(94,731		)	(52,606		)	(167,525		)
Income before income taxes	362,922			321,622			732,612			642,668
Income tax expense	(70,570		)	(119,513		)	(150,819		)	(233,486		)
Net income	$	292,352		$	202,109		$	581,793		$	409,182
Foreign currency translation adjustment, net of tax	(8,242		)	2,763			(17,826		)	2,746
Total comprehensive income	$	284,110		$	204,872		$	563,967		$	411,928
Net income per common share:
Basic	$	0.07		$	0.04		$	0.13		$	0.09
Diluted	$	0.06		$	0.04		$	0.13		$	0.09
Weighted average common shares outstanding:
Basic	4,481,930			4,652,426			4,486,620			4,681,223
Diluted	4,589,095			4,735,592			4,588,986			4,759,741
Dividends declared per common share	$	0.011		$	0.010		$	0.022		$	0.020

See accompanying notes to the unaudited consolidated financial statements.

2

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)	June 30, 2018			December 31, 2017
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	63,516		$	69,022
Receivables, net	247,148			241,727
Inventory, net	18,967			20,199
Related party current assets	13,692			10,284
Prepaid expenses and other current assets	138,015			129,669
Total current assets	481,338			470,901
Property and equipment, net	1,468,930			1,462,766
Intangible assets, net	2,511,121			2,522,846
Goodwill	2,286,582			2,286,582
Related party long-term assets	1,051,337			962,080
Deferred tax assets	371,303			505,528
Other long-term assets	128,543			118,671
Total assets	$	8,299,154		$	8,329,374
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	871,373		$	794,341
Accrued interest	128,029			137,428
Current portion of deferred revenue	1,935,326			1,881,825
Current maturities of long-term debt	4,660			5,105
Related party current liabilities	4,103			2,839
Total current liabilities	2,943,491			2,821,538
Deferred revenue	160,286			174,579
Long-term debt	6,443,289			6,741,243
Related party long-term liabilities	6,269			7,364
Deferred tax liabilities	8,169			8,169
Other long-term liabilities	108,218			100,355
Total liabilities	9,669,722			9,853,248
Commitments and contingencies (Note 14)
Stockholders’ (deficit) equity:
Common stock, par value $0.001; 9,000,000 shares authorized; 4,485,774 and 4,530,928 shares issued; 4,485,774 and 4,527,742 outstanding at June 30, 2018 and December 31, 2017, respectively	4,485			4,530
Accumulated other comprehensive income, net of tax	4,594			18,407
Additional paid-in capital	1,267,630			1,713,816
Treasury stock, at cost; zero and 3,186 shares of common stock at June 30, 2018 and December 31, 2017, respectively	—			(17,154		)
Accumulated deficit	(2,647,277		)	(3,243,473		)
Total stockholders’ (deficit) equity	(1,370,568		)	(1,523,874		)
Total liabilities and stockholders’ (deficit) equity	$	8,299,154		$	8,329,374

See accompanying notes to the unaudited consolidated financial statements.

3

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ (DEFICIT) EQUITY

(UNAUDITED)

	Common Stock					Accumulated Other Comprehensive Income (Loss)			Additional Paid-in Capital			Treasury Stock					Accumulated Deficit			Total Stockholders’ (Deficit) Equity
(in thousands)	Shares		Amount									Shares		Amount
Balance at December 31, 2017	4,530,928		$	4,530		$	18,407		$	1,713,816		3,186		$	(17,154	)	$	(3,243,473	)	$	(1,523,874	)
Cumulative effect of change in accounting principles	—		—			4,013			—			—		—			14,403			18,416
Comprehensive income, net of tax	—		—			(17,826		)	—			—		—			581,793			563,967
Share-based payment expense	—		—			—			58,208			—		—			—			58,208
Exercise of options and vesting of restricted stock units	13,875		14			—			(14		)	—		—			—			—
Minimum withholding taxes on net share settlement of stock-based compensation	—		—			—			(71,540		)	—		—			—			(71,540		)
Cash dividends paid on common stock	—		—			—			(98,684		)	—		—			—			(98,684		)
Common stock repurchased	—		—			—			—			55,843		(317,061		)	—			(317,061		)
Common stock retired	(59,029	)	(59		)	—			(334,156		)	(59,029	)	334,215			—			—
Balance at June 30, 2018	4,485,774		$	4,485		$	4,594		$	1,267,630		—		$	—		$	(2,647,277	)	$	(1,370,568	)

See accompanying notes to the unaudited consolidated financial statements.

4

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended June 30,
(in thousands)	2018			2017
Cash flows from operating activities:
Net income	$	581,793		$	409,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	146,835			150,223
Non-cash interest expense, net of amortization of premium	4,713			4,231
Provision for doubtful accounts	23,944			27,377
Amortization of deferred income related to equity method investment	(1,388		)	(1,388		)
Loss on unconsolidated entity investments, net	64			2,183
Gain on fair value instrument	(117,449		)	—
Dividend received from unconsolidated entity investment	1,366			3,606
Share-based payment expense	70,448			59,697
Deferred income taxes	134,044			220,415
Changes in operating assets and liabilities:
Receivables	(29,364		)	(38,063		)
Inventory	1,232			2,492
Related party, net	(1,722		)	(5,756		)
Prepaid expenses and other current assets	(177		)	(6,617		)
Other long-term assets	8,356			5,937
Accounts payable and accrued expenses	87,857			(69,078		)
Accrued interest	(9,399		)	(7,042		)
Deferred revenue	85,100			30,779
Other long-term liabilities	7,863			4,358
Net cash provided by operating activities	994,116			792,536
Cash flows from investing activities:
Additions to property and equipment	(174,273		)	(119,517		)
Purchases of other investments	(7,138		)	(7,355		)
Acquisition of business, net of cash acquired	—			(107,056		)
Investments in related parties and other equity investees	(6,138		)	(302,526		)
Repayment from (loan to) related party	3,242			(130,794		)
Net cash used in investing activities	(184,307		)	(667,248		)
Cash flows from financing activities:
Taxes paid in lieu of shares issued for stock-based compensation	(71,501		)	(22,595		)
Revolving credit facility, net of deferred financing costs	(302,611		)	610,000
Principal payments of long-term borrowings	(7,717		)	(6,000		)
Common stock repurchased and retired	(334,215		)	(783,824		)
Dividends paid	(98,684		)	(93,638		)
Net cash used in financing activities	(814,728		)	(296,057		)
Net decrease in cash, cash equivalents and restricted cash	(4,919		)	(170,769		)
Cash, cash equivalents and restricted cash at beginning of period	79,374			223,828
Cash, cash equivalents and restricted cash at end of period(1)	$	74,455		$	53,059

(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.

	June 30, 2018		December 31, 2017		June 30, 2017		December 31, 2016
Cash and cash equivalents	$	63,516	$	69,022	$	42,738	$	213,939
Restricted cash included in Prepaid expenses and other current assets	150		244		432		—
Restricted cash included in Other long-term assets	10,789		10,108		9,889		9,889
Total cash, cash equivalents and restricted cash at end of period	$	74,455	$	79,374	$	53,059	$	223,828

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 Six Months Ended June 30,
(in thousands)	2018		2017
Supplemental Disclosure of Cash and Non-Cash Flow Information
Cash paid during the period for:
Interest, net of amounts capitalized	$	178,850	$	164,147
Income taxes paid	$	5,625	$	12,264
Non-cash investing and financing activities:
Capital lease obligations incurred to acquire assets	$	499	$	—
Change in treasury stock not yet settled	$	17,154	$	8,123
Other comprehensive loss (income), net of tax benefit	$	17,826	$	(2,746	)
Issuance of common stock as part of recapitalization of Sirius XM Canada	$	—	$	178,850

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 thousands, except per share amounts)

(1) Business & Basis of Presentation

This Quarterly Report on Form 10-Q presents information for Sirius XM Holdings Inc. (“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, and “Sirius XM” refers to our wholly-owned subsidiary Sirius XM Radio Inc. Holdings has no operations independent of its wholly-owned subsidiary, Sirius XM.

Business

We transmit music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through our two proprietary satellite radio systems.  Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand, over our Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment.  We also provide connected vehicle services.  Our connected vehicle services are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers.

We have agreements with every major automaker (“OEMs”) to offer satellite radio in their vehicles, through which we acquire the majority of our subscribers. We also acquire subscribers through marketing to owners and lessees of previously owned vehicles that include factory-installed satellite radios that are not currently subscribing to our services. Our satellite radios are primarily distributed through automakers, retailers, and our website. Satellite radio services are also offered to customers of certain rental car companies.

Our primary source of revenue is subscription fees, with most of our customers subscribing to annual, semi-annual, quarterly or monthly plans.  We offer discounts for prepaid, longer-term subscription plans, as well as a multiple subscription discount.  We also derive revenue from activation and other fees, the sale of advertising on select non-music channels, the direct sale of satellite radios and accessories, and other ancillary services, such as our weather, traffic and data services.

In many cases, a subscription to our radio services is included with the purchase of new or previously owned vehicles. The length of these subscriptions varies but is typically three to twelve months.  We receive payments for these subscriptions from certain automakers.  We also reimburse various automakers for certain costs associated with satellite radios installed in new vehicles and pay revenue share to various automakers.

As of June 30, 2018, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, approximately 70% 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 and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation.

All significant intercompany transactions have been eliminated in consolidation. In the opinion of our management, all normal recurring adjustments necessary for a fair presentation of our unaudited consolidated financial statements as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 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, 2017, which was filed with the SEC on January 31, 2018.

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 one reportable segment as our chief

7

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

operating decision maker, our Chief Executive Officer, assesses performance and allocates resources based on the consolidated results of operations of our business.

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 and six months ended June 30, 2018 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 16.

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.

(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 June 30, 2018 and December 31, 2017, 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 assets and liabilities measured at fair value were as follows:

	June 30, 2018						December 31, 2017
	Level 1	Level 2		Level 3	Total Fair Value		Level 1	Level 2		Level 3	Total Fair Value
Assets:
Pandora Media, Inc. (“Pandora”) - investment (a)	—	$	597,921	—	$	597,921	—	$	480,472	—	$	480,472
Liabilities:
Debt (b)	—	$	6,342,699	—	$	6,342,699	—	$	6,987,473	—	$	6,987,473

(a) During the year ended December 31, 2017, Sirius XM completed a $480,000investment in Pandora. We have elected the fair value option to account for this investment. Refer to Note 10 for information on this transaction.

(b) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm.  Refer to Note 11 for information related to the carrying value of our debt as of June 30, 2018 and December 31, 2017.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income of $4,594 was primarily comprised of the cumulative foreign currency translation adjustments related to our investment in and loan to Sirius XM Canada Holdings Inc. (“Sirius XM Canada”) (refer to Note 10 for additional information). During the three and six months ended June 30, 2018, we recorded a foreign currency translation adjustment loss of $8,242 and $17,826 net of tax of $2,663 and $5,735, respectively. In addition, we reclassified stranded tax effects of $4,013 related to the adoption of Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, during the six months ended June 30, 2018.

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

Recent Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We are in the process of evaluating the impact of adoption of this ASU on our consolidated financial statements.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The FASB recently issued an exposure draft amending certain aspects of the new leasing standard. The proposed amendment allows adoption of the standard as of the effective date without restating prior periods. We plan to adopt this ASU on January 1, 2019. We expect the adoption of ASU 2016-02 will result in the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for operating leases.

Recently Adopted Accounting Policies

ASU 2014-09, Revenue - Revenue from Contracts with Customers. In May 2014, the FASB issued ASU 2014-09 which requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09, and all related amendments, which established ASC Topic 606 (the "new revenue standard"), effective as of January 1, 2018. We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

The new revenue standard primarily impacts how we account for revenue share payments and also has other immaterial impacts.

Revenue Share - Paid Trials

We previously recorded revenue share related to paid trials as Revenue share and royalties expense. Under the new revenue standard, we have recorded these revenue share payments as a reduction to revenue as the payments do not transfer a distinct good or service to us. Prior to the adoption, we recognized revenue share related to paid trial subscriptions as the Current portion of deferred revenue. Under the new revenue standard, we reclassified the revenue share related to paid trial subscriptions existing as of the date of adoption from Current portion of deferred revenue to Accounts payable and accrued expenses. For new paid trial subscriptions, the net amount of the paid trial subscription will be recorded as deferred revenue and the portion of revenue share will be recorded to Accounts payable and accrued expenses.

Other Impacts

Other impacts of the new revenue standard include:

• Activation fees were previously recognized over the expected subscriber life using the straight-line method. Under the new revenue standard, the activation fees have been recognized over a one month period from activation as the

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

activation fees are non-refundable and they do not convey a material right. As of January 1, 2018, we reduced deferred revenue related to activation fees of $8,260, net of tax, to Accumulated deficit.

• Loyalty payments to OEMs were previously expensed when incurred as Subscriber acquisition costs. Under the new revenue standard, these costs have been capitalized in Prepaid expenses and other current assets as costs to obtain a contract and these costs will be amortized to Subscriber acquisition costs over an average self-pay subscriber life of that OEM. As of January 1, 2018, we capitalized previously expensed loyalty payments of $10,156, net of tax, to Prepaid expenses and other current assets by reducing Accumulated deficit.

These changes do not have a material impact to our financial statements.

ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02 to amend its standard on comprehensive income to provide an option for an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) that was passed in December 2017 from accumulated other comprehensive income (“AOCI”) directly to retained earnings. The stranded tax effects result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal years beginning after December 15, 2018, with early adoption permitted. We elected to adopt ASU 2018-02 effective January 1, 2018 and reclassified the stranded tax effects due to the Tax Act of $4,013 related to the currency translation adjustment from our investment balance and note receivable with Sirius XM Canada from AOCI to Accumulated deficit.

The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09 and ASU 2018-02 are included in the table below.

	Balance at December 31, 2017			Adjustments Due to ASU 2014-09			Adjustments Due to ASU 2018-02			Balance at January 1, 2018
Balance Sheet
Assets
Prepaid expenses and other current assets	$	129,669		$	8,262		$	—		$	137,931
Other long-term assets	118,671			2,576			—			121,247
Deferred tax assets	505,528			(5,915		)	—			499,613
Liabilities:
Accounts payable and accrued expenses	794,341			32,399			—			826,740
Current portion of deferred revenue	1,881,825			(41,902		)	—			1,839,923
Deferred revenue	174,579			(3,990		)	—			170,589
Equity:
Accumulated deficit	(3,243,473		)	18,416			(4,013		)	(3,229,070		)
AOCI, net of tax	18,407			—			4,013			22,420

The following table illustrates the impact of adopting ASU 2014-09 on our unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

	For the Three Months Ended June 30, 2018									For the Six Months Ended June 30, 2018
	As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09			As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09
Income Statement
Revenues
Subscriber revenue	$	1,138,962		$	23,787		$	1,162,749		$	2,256,046		$	48,179		$	2,304,225
Expenses
Revenue share and royalties	404,284			22,235			426,519			714,416			44,304			758,720
Subscriber acquisition costs	119,778			800			120,578			242,471			1,845			244,316
Income tax expense	(70,570		)	(146		)	(70,716		)	(150,819		)	(418		)	(151,237		)
Net Income	$	292,352		$	606		$	292,958		$	581,793		$	1,612		$	583,405

The adoption of the new revenue standard did not have a material impact on our unaudited consolidated balance sheet as of June 30, 2018.

ASU 2016-18,Statement of Cash Flows (Topic 230): Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU updates the guidance related to the statement of cash flows and requires that the statement include restricted cash with cash and cash equivalents when reconciling beginning and ending cash. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We adopted this ASU effective January 1, 2018. As a result of the adoption, we have added restricted cash to the reconciliation of beginning and ending cash and cash equivalents and included a reconciliation of total cash, cash equivalents and restricted cash to the balance sheet for each period presented in the unaudited consolidated statements of cash flows.

(3) Revenues

Adoption of the new revenue standard

We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605.

Disaggregation of Revenue

We disaggregate our revenues as shown in the unaudited consolidated statements of comprehensive income.

Nature of goods and services

The following is a description of principal activities from which we generate our revenue, including from subscribers, advertising, and sales of equipment.

Subscription Revenue

Subscription revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio typically receive between a three and twelve month subscription to our service.  In certain cases, the subscription fees for these consumers are prepaid by the applicable

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

automaker. Prepaid subscription fees received from certain automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale and activation. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the OEM when we receive a certain amount of payments from self-pay customers acquired from that OEM. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life of that OEM. Revenue share and loyalty fees paid to the OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service.

Advertising Revenue

We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue.  Additionally, we pay certain third parties a percentage of advertising revenue.  Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service.  Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted.

Equipment Revenue

Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon shipment. Revenue is recognized net of discounts and rebates.

Music Royalty Fee and Other Revenue

Music Royalty Fee and Other Revenue primarily consists of U.S. music royalty fees ("MRF"). The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense.  Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the subscription services which are continuously delivered to our customers.

Deferred Revenue

Customers generally pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our unaudited consolidated statement of comprehensive income as the services are provided. Changes in the liability balance during the period ended June 30, 2018 was not materially impacted by other factors.

Transaction Price Allocated to the Remaining Performance Obligations

As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. As of June 30, 2018, less than ten percent of our total deferred revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance. These amounts will be recognized on a straight-line basis as our services are provided.

(4) 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 and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. We had no participating securities during the three and six months ended June 30, 2018 and 2017.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

Common stock equivalents of 24,191 and 35,468 for the three months ended June 30, 2018 and 2017, respectively, and 45,032 and 35,447 for the six months ended June 30, 2018 and 2017, 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 June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Numerator:
Net income available to common stockholders for basic and diluted net income per common share	$	292,352	$	202,109	$	581,793	$	409,182
Denominator:
Weighted average common shares outstanding for basic net income per common share	4,481,930		4,652,426		4,486,620		4,681,223
Weighted average impact of dilutive equity instruments	107,165		83,166		102,366		78,518
Weighted average shares for diluted net income per common share	4,589,095		4,735,592		4,588,986		4,759,741
Net income per common share:
Basic	$	0.07	$	0.04	$	0.13	$	0.09
Diluted	$	0.06	$	0.04	$	0.13	$	0.09

(5) Receivables, net

Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables.

Customer accounts receivable, net, includes receivables from our subscribers and other customers, including advertising, 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 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 OEMs 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 our receivables from distributors or other receivables as we have historically not experienced any significant collection issues with OEMs or other third parties.

Receivables, net, consists of the following:

	June 30, 2018			December 31, 2017
Gross customer accounts receivable	$	105,764		$	100,342
Allowance for doubtful accounts	(8,302		)	(9,500		)
Customer accounts receivable, net	$	97,462		$	90,842
Receivables from distributors	121,407			121,410
Other receivables	28,279			29,475
Total receivables, net	$	247,148		$	241,727

(6) Inventory, net

Inventory consists of finished goods, refurbished goods, chipsets and other raw material components used in manufacturing radios and connected vehicle devices. 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

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

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:

	June 30, 2018			December 31, 2017
Raw materials	$	5,615		$	6,489
Finished goods	18,915			21,225
Allowance for obsolescence	(5,563		)	(7,515		)
Total inventory, net	$	18,967		$	20,199

(7) 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 single reporting unit 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. The carrying amount recorded for our one reporting unit and goodwill was $(1,370,568) and $2,286,582, respectively, as of June 30, 2018.

As of June 30, 2018, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the three and six months ended June 30, 2018 and 2017.  As of June 30, 2018, the cumulative balance of goodwill impairments recorded since the July 2008 merger (the “Merger”) between our wholly owned subsidiary, Vernon Merger Corporation, and XM Satellite Radio Holdings Inc. (“XM”), was $4,766,190, which was recognized during the year ended December 31, 2008.

(8) Intangible Assets

Our intangible assets include the following:

		June 30, 2018							December 31, 2017
	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Indefinite life intangible assets:
FCC licenses	Indefinite	$	2,083,654	$	—		$	2,083,654	$	2,083,654	$	—		$	2,083,654
Trademarks	Indefinite	250,800		—			250,800		250,800		—			250,800
Definite life intangible assets:
Subscriber relationships	9 years	—		—			—		380,000		(380,000		)	—
OEM relationships	15 years	220,000		(68,444		)	151,556		220,000		(61,111		)	158,889
Licensing agreements	12 years	45,289		(36,193		)	9,096		45,289		(34,350		)	10,939
Software and technology	7 years	33,872		(17,857		)	16,015		43,915		(25,351		)	18,564
Total intangible assets		$	2,633,615	$	(122,494	)	$	2,511,121	$	3,023,658	$	(500,812	)	$	2,522,846

Indefinite Life Intangible Assets

We have identified our FCC licenses and the XM and Automatic Labs Inc. 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary services. The following table outlines the years in which each of our satellite licenses expires:

FCC satellite licenses	Expiration year
SIRIUS FM-5	2025
SIRIUS FM-6	2022
XM-3	2021
XM-4	2022
XM-5	2018

Prior to expiration, we are required to apply for a renewal of our FCC licenses.  The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred.  Each of the FCC licenses authorizes us to use the radio spectrum, which is a renewable, reusable resource that does not deplete or exhaust over time.

Our annual impairment assessment of our identifiable indefinite life 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. As of June 30, 2018, there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three and six months ended June 30, 2018 and 2017.

Definite Life Intangible Assets

Amortization expense for all definite life intangible assets was $5,863 and $12,098 for the three months ended June 30, 2018 and 2017, respectively, and $11,725 and $23,626 for the six months ended June 30, 2018 and 2017, respectively. We retired definite lived intangible assets of $390,043 during the six months ended June 30, 2018 primarily related to fully amortized subscriber relationships. There were no retirements of definite lived intangible assets during the six months ended June 30, 2017. The expected amortization expense for the remaining period in 2018, each of the fiscal years 2019 through 2022 and for periods thereafter is as follows:

Years ending December 31,	Amount
2018 (remaining)	$	11,413
2019	22,701
2020	22,121
2021	16,678
2022	15,542
Thereafter	88,212
Total definite life intangible assets, net	$	176,667

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

(9) Property and Equipment

Property and equipment, net, consists of the following:

	June 30, 2018			December 31, 2017
Satellite system	$	1,586,794		$	1,586,794
Terrestrial repeater network	124,904			123,254
Leasehold improvements	59,477			57,635
Broadcast studio equipment	101,338			96,582
Capitalized software and hardware	719,433			639,516
Satellite telemetry, tracking and control facilities	74,201			69,147
Furniture, fixtures, equipment and other	98,849			96,965
Land	38,411			38,411
Building	61,844			61,824
Construction in progress	347,196			301,153
Total property and equipment	3,212,447			3,071,281
Accumulated depreciation and amortization	(1,743,517		)	(1,608,515		)
Property and equipment, net	$	1,468,930		$	1,462,766

Construction in progress consists of the following:

	June 30, 2018		December 31, 2017
Satellite system	$	231,047	$	183,243
Terrestrial repeater network	2,972		2,515
Capitalized software and hardware	95,555		94,456
Other	17,622		20,939
Construction in progress	$	347,196	$	301,153

Depreciation and amortization expense on property and equipment was $68,760 and $61,421 for the three months ended June 30, 2018 and 2017, respectively, and $135,110 and $126,597 for the six months ended June 30, 2018 and 2017, respectively.  We retired property and equipment of $14,760 during the six months ended June 30, 2017. There were no retirements of property and equipment during the six months ended June 30, 2018.

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 $2,901 and $1,005 for the three months ended June 30, 2018 and 2017, respectively, and $5,155 and $1,723 for the six months ended June 30, 2018 and 2017, respectively, which related to the construction of our SXM-7 and SXM-8 satellites.

Satellites

As of June 30, 2018, we owned a fleet of five satellites.  The chart below provides certain information on our satellites as of June 30, 2018:

Satellite Description	Year Delivered	Estimated End of Depreciable Life
SIRIUS FM-5	2009	2024
SIRIUS FM-6	2013	2028
XM-3	2005	2020
XM-4	2006	2021
XM-5	2010	2025

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

(10) Related Party Transactions

In the normal course of business, we enter into transactions with related parties such as Liberty Media, Sirius XM Canada and Pandora.

Liberty Media

As of June 30, 2018, Liberty Media beneficially owned, directly and indirectly, approximately 70% of the outstanding shares of our common stock. Liberty Media has two executives 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

On May 25, 2017, Sirius XM completed a recapitalization of Sirius XM Canada (the “Transaction”), which is now a privately held corporation.

Following the Transaction, Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada, with the remainder of the voting power and equity interests held by two of Sirius XM Canada’s previous shareholders. The total consideration from Sirius XM to Sirius XM Canada, excluding transaction costs, during the year ended December 31, 2017 was $308,526, which included $129,676 in cash and we issued 35,000 shares of our common stock with an aggregate value of $178,850 to the holders of the shares of Sirius XM Canada acquired in the Transaction. Sirius XM received common stock, non-voting common stock and preferred stock of Sirius XM Canada. We own 590,950 shares of preferred stock of Sirius XM Canada, which has a liquidation preference of one Canadian dollar per share.

In connection with the Transaction, Sirius XM also made a contribution in the form of a loan to Sirius XM Canada in the aggregate amount of $130,794. 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. The loan has a term of fifteen years, bears interest at a rate of 7.62% per annum and includes customary covenants and events of default, including an event of default relating to Sirius XM Canada’s failure to maintain specified leverage ratios. The terms of the loan require Sirius XM Canada to prepay a portion of the outstanding principal amount of the loan within sixty days of the end of each fiscal year in an amount equal to any cash on hand in excess of C$10,000 at the last day of the financial year if all target dividends have been paid in full. During the six months ended June 30, 2018, Sirius XM Canada repaid $3,242 of the principal amount of the loan.

In connection with the Transaction, Sirius XM also entered into 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 pays Sirius XM 25% of its gross revenues on a monthly basis through December 31, 2021 and 30% of its gross revenues on a monthly basis thereafter. Pursuant to the Advisory Services Agreement, Sirius XM Canada pays Sirius XM 5% of its gross revenues on a monthly basis. These agreements superseded and replaced the former agreements between Sirius XM Canada and its predecessors and Sirius XM.

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.

We had the following related party balances associated with Sirius XM Canada:

	June 30, 2018		December 31, 2017
Related party current assets	$	13,692	$	10,284
Related party long-term assets	$	453,416	$	481,608
Related party current liabilities	$	4,103	$	2,839
Related party long-term liabilities	$	6,269	$	7,364

As of June 30, 2018 and December 31, 2017, our related party current asset balance included amounts due under the Services Agreement and Advisory Services Agreement and certain amounts related to transactions outside the scope of the new services arrangements. Our related party long-term assets balance as of June 30, 2018 and December 31, 2017 included the

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

carrying value of our investment balance in Sirius XM Canada of $323,226 and $341,214, respectively, and, as of June 30, 2018 and December 31, 2017, also included $130,190 and $140,073, respectively, for the long-term value of the outstanding loan to Sirius XM Canada. Our related party liabilities as of each of June 30, 2018 and December 31, 2017 included $2,776 for the current portion of deferred revenue and $3,700 and $5,088, respectively, for the long-term portion of deferred revenue recorded as of the Merger date related to agreements with legacy XM Canada, now Sirius XM Canada.  These costs are being amortized on a straight line basis through 2020.

Sirius XM Canada paid gross dividends to us of $408 during the three months ended June 30, 2018 and $1,439 and $3,796 during the six months ended June 30, 2018 and 2017, respectively. Sirius XM Canada did not pay any dividends to us during the three months ended June 30, 2017.  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 income for any remaining portion.

We recorded the following revenue and other income associated with Sirius XM Canada in our unaudited consolidated statements of comprehensive income:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018		2017
Revenue (a)(b)	$	23,273		$	28,129		$	47,370	$	40,345
Other income
Share of net earnings (b)	$	(896	)	$	(5,197	)	$	85	$	(2,183	)
Interest income (c)	$	2,557		$	803		$	5,204	$	803

(a) Prior to the Transaction, under our former agreements with Sirius XM Canada, we received a percentage-based fee of 10% and 15% for certain types of subscription revenue earned by Sirius XM Canada for the use of the Sirius and XM platforms, respectively, and additional fees for premium services and fees for activation fees and reimbursements for other charges.  We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income.

(b) Prior to the Transaction, we recognized our proportionate share of revenue and earnings or losses attributable to Sirius XM Canada on a one month lag. As a result of the Transaction, there is no longer a one-month lag and Sirius XM Canada changed its fiscal year-end to December 31 to align with us. For the three and six months ended June 30, 2018, Share of net earnings included $611 and $1,234, respectively, of amortization related to equity method intangible assets.

(c) This interest income relates to the loan to Sirius XM Canada and is recorded as Other income in our unaudited consolidated statements of comprehensive income.

Pandora

On September 22, 2017, Sirius XM completed a $480,000 investment in Pandora. Pursuant to an Investment Agreement with Pandora, Sirius XM purchased 480 shares of Pandora’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), for an aggregate purchase price of $480,000. As of June 30, 2018, the Series A Preferred Stock, including accrued but unpaid dividends, represents a stake of approximately 18% of Pandora's common stock outstanding and approximately a 15% interest on an as-converted basis. Pandora operates an internet-based music discovery platform, offering a personalized experience for listeners.

The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock of Pandora (“Pandora Common Stock”) at an initial conversion price of $10.50 per share of Pandora Common Stock and an initial conversion rate of 95.2381 shares of Pandora Common Stock per share of Series A Preferred Stock, subject to certain customary anti-dilution adjustments. Holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 6.0% per annum, payable quarterly in arrears, if and when declared. Pandora has the option to pay dividends in cash when authorized by their Board and declared by Pandora or accumulate dividends in lieu of paying cash. Any conversion of Series A Preferred Stock may be settled by Pandora, at its option, in shares of Pandora Common Stock, cash or any combination thereof. However, unless and until Pandora’s stockholders have approved the issuance of greater than 19.99% of the outstanding Pandora Common Stock, the Series A Preferred Stock may not be converted into more than 19.99% of Pandora’s outstanding Pandora Common Stock as of June 9, 2017. The liquidation preference of the Series A Preferred Stock, including accrued dividends of $25,684, was $505,684 as of June 30, 2018.

The investment includes a mandatory redemption feature on any date from and after September 22, 2022 whereby Sirius XM, at its option, may require Pandora to purchase the Series A Preferred Stock at a price equal to 100% of the liquidation

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SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

preference plus accrued but unpaid dividends for, at the election of Pandora, cash, shares of Pandora Common Stock or a combination thereof, and as such the investment qualifies as a debt security under ASC 320, Investments-Debt and Equity Securities. As the investment includes a conversion option, we have elected to account for this investment under the fair value option to reduce the accounting asymmetry that would otherwise arise when recognizing the changes in the fair value of available-for-sale investments. Under the fair value option, any gains (losses) associated with the change in fair value will be recognized in Other income within our unaudited consolidated statements of comprehensive income. An $86,074 and $117,449 unrealized gain associated with this investment was recognized during the three and six months ended June 30, 2018, respectively, as Other income in our unaudited consolidated statements of comprehensive income. The fair value of our investment, including accrued dividends, as of June 30, 2018 and December 31, 2017 was $597,921 and $480,472, respectively, and is recorded as a related party long-term asset within our unaudited consolidated balance sheets. This investment does not meet the requirements for the equity method of accounting as it does not qualify as in-substance common stock.

Sirius XM has appointed James E. Meyer, our Chief Executive Officer, David J. Frear, our Senior Executive Vice President and Chief Financial Officer, and Gregory B. Maffei, the Chairman of our Board of Directors, to Pandora's Board of Directors pursuant to our designation rights under the Investment Agreement. Mr. Maffei also serves as the Chairman of Pandora's Board of Directors.

Sirius XM's right to designate directors will fall away once Sirius XM and its affiliates fail to beneficially own shares of Series A Preferred Stock and/or Pandora Common Stock issued upon conversion thereof equal to (on an as-converted basis) at least 50% of the number of shares of Pandora Common Stock issuable upon conversion of the Series A Preferred Stock purchased under the Investment Agreement. Following the earlier to occur of (i) September 22, 2019 and (ii) the date on which Sirius XM and its affiliates fail to beneficially own shares of Series A Preferred Stock and/or Pandora Common Stock that were issued upon conversion thereof equal to (on an as-converted basis) at least 75% of the number of shares of Pandora Common Stock issuable upon conversion of the Series A Preferred Stock purchased under the Investment Agreement, Sirius XM has the right to designate only two directors.

We are subject to certain standstill restrictions, including, among other things, that we are restricted from acquiring additional securities of Pandora until December 9, 2018.

Except as to matters that may be voted upon separately by holders of the Series A Preferred Stock, Sirius XM is entitled to vote as a single class with the holders of Pandora Common Stock on an as-converted basis (up to a maximum of 19.99% of the Pandora Common Stock outstanding on June 9, 2017, unless stockholder approval has been received). Sirius XM is also entitled to a separate class vote with respect to certain amendments to Pandora’s organizational documents, issuances by Pandora of securities that are senior to, or equal in priority with, the Series A Preferred Stock and the incurrence of certain indebtedness by Pandora.

Upon certain change of control events involving Pandora, Pandora is required to repurchase all of the Series A Preferred Stock at a price equal to the greater of (1) an amount in cash equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends through June 9, 2022 (assuming such shares of Series A Preferred Stock remain outstanding through such date) and (2) the consideration the holders would have received if they had converted their shares of Series A Preferred Stock into Pandora Common Stock immediately prior to the change of control event (disregarding the 19.99% cap).

Beginning on September 22, 2020, if the volume weighted average price per share of Pandora Common Stock exceeds $18.375, as may be adjusted, for at least 20 trading days in any period of 30 consecutive trading days, Pandora may redeem all of the outstanding Series A Preferred Stock at a price equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends for, at the election of Pandora, cash, shares of Pandora Common Stock or a combination thereof, provided that, unless stockholder approval has been received, Pandora may not settle the redemption for shares of Pandora Common Stock to the extent the 19.99% cap would be exceeded.

Pursuant to a registration rights agreement entered into with Pandora, Sirius XM has certain customary registration rights with respect to the Series A Preferred Stock and Pandora Common Stock issued upon conversion thereof.

19

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

(11) Debt

Our debt as of June 30, 2018 and December 31, 2017 consisted of the following:

							Carrying value(a) at
Issuer / Borrower	Issued	Debt	Maturity Date	Interest Payable	Principal Amount at June 30, 2018		June 30, 2018		December 31, 2017
Sirius XM (b)	July 2017	3.875% Senior Notes	August 1, 2022	semi-annually on February 1 and August 1	$	1,000,000	$	992,811	$	992,011
Sirius XM (b)	May 2013	4.625% Senior Notes	May 15, 2023	semi-annually on May 15 and November 15	500,000		496,923		496,646
Sirius XM (b)	May 2014	6.00% Senior Notes	July 15, 2024	semi-annually on January 15 and July 15	1,500,000		1,488,758		1,488,002
Sirius XM (b)	March 2015	5.375% Senior Notes	April 15, 2025	semi-annually on April 15 and October 15	1,000,000		991,777		991,285
Sirius XM (b)	May 2016	5.375% Senior Notes	July 15, 2026	semi-annually on January 15 and July 15	1,000,000		990,597		990,138
Sirius XM (b)	July 2017	5.00% Senior Notes	August 1, 2027	semi-annually on February 1 and August 1	1,500,000		1,486,728		1,486,162
Sirius XM (c)	December 2012	Senior Secured Revolving Credit Facility (the "Credit Facility")	June 29, 2023	variable fee paid quarterly	1,750,000		—		300,000
Sirius XM	Various	Capital leases	Various	n/a	n/a		8,324		10,597
Total Debt							6,455,918		6,754,841
Less: total current maturities							4,660		5,105
Less: total deferred financing costs for Notes							7,969		8,493
Total long-term debt							$	6,443,289	$	6,741,243

(a) The carrying value of the obligations is net of any remaining unamortized original issue discount.

(b) Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes.

(c) In June 2018, Sirius XM entered into an amendment to extend the maturity of the Credit Facility to June 2023. 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.  Interest on borrowings is payable on a monthly 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 payable on a quarterly basis.  The variable rate for the unused portion of the Credit Facility was 0.25% per annum as of June 30, 2018.  All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our unaudited consolidated balance sheets due to the long-term maturity of this debt.

Covenants and Restrictions

Under the Credit Facility, Sirius XM, our wholly-owned subsidiary, must comply with a debt maintenance covenant that it cannot exceed a total leverage ratio, calculated as consolidated total debt to consolidated operating cash flow, of 5.0 to 1.0.  The Credit Facility generally requires 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 indentures governing Sirius XM's notes restrict 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.  The indentures governing the notes also contain 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.

Under Sirius XM's 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

20

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

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 June 30, 2018 and December 31, 2017, we were in compliance with our debt covenants.

(12) Stockholders’ Equity

Common Stock, par value $0.001 per share

We are authorized to issue up to 9,000,000 shares of common stock. There were 4,485,774 and 4,530,928 shares of common stock issued and 4,485,774 and 4,527,742 shares outstanding on June 30, 2018 and December 31, 2017, respectively.

As of June 30, 2018, there were 281,863 shares of common stock reserved for issuance in connection with outstanding stock based awards to be granted to members of our board of directors, employees and third parties.

Quarterly Dividends

During the six months ended June 30, 2018, our board of directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date	Total Amount		Payment Date
January 23, 2018	$	0.011	February 7, 2018	$	49,397	February 28, 2018
April 26, 2018	$	0.011	May 10, 2018	$	49,287	May 31, 2018

Stock Repurchase Program

As of June 30, 2018, our board of directors had approved for repurchase an aggregate of $12,000,000 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, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, including transactions with Liberty Media and its affiliates, or otherwise.  As of June 30, 2018, our cumulative repurchases since December 2012 under our stock repurchase program totaled 2,529,978 shares for $9,694,181, and $2,305,819 remained available under our stock repurchase program.

The following table summarizes our total share repurchase activity for the six months ended:

	June 30, 2018			June 30, 2017
Share Repurchase Type	Shares	Amount		Shares	Amount
Open Market	55,843	$	317,061	155,711	$	775,701

Preferred Stock, par value $0.001 per share

We are authorized to issue up to 50,000 shares of undesignated preferred stock with a liquidation preference of $0.001 per share.  There were no shares of preferred stock issued or outstanding as of June 30, 2018 and 2017.

(13) Benefit Plans

We recognized share-based payment expense of $36,215 and $30,251 for the three months ended June 30, 2018 and $70,448 and $59,697 for the six months ended June 30, 2018 and 2017, respectively.

2015 Long-Term Stock Incentive Plan

In May 2015, our stockholders approved the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (the “2015 Plan”).  Employees, consultants and members of our board of directors are eligible to receive awards under the 2015 Plan.  The 2015 Plan provides for the grant of stock options, restricted stock awards, restricted stock units and other stock-based awards that the compensation committee of our board of directors deems appropriate.  Stock-based awards granted under the 2015 Plan

21

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

are generally subject to a graded vesting requirement, which is generally three to four years from the grant date.  Stock options generally expire ten years from the date of grant.  Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the third anniversary of the grant date. Each restricted stock unit entitles the holder to receive one share of common stock upon vesting.  As of June 30, 2018, 171,619 shares of common stock were available for future grants under the 2015 Plan.

Other Plans

We maintain three other share-based benefit plans — the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan, the XM 2007 Stock Incentive Plan and the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan. Excluding dividend equivalent units granted as a result of a declared dividend, no further awards may be made under these plans.

The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2018	2017	2018	2017
Risk-free interest rate	2.6%	1.6%	2.5%	1.6%
Expected life of options — years	3.48	4.35	3.54	4.07
Expected stock price volatility	22%	26%	22%	26%
Expected dividend yield	0.6%	0.8%	0.7%	0.8%

There were no options granted to third parties during the three and six months ended June 30, 2018 and 2017.

The following table summarizes stock option activity under our share-based plans for the six months ended June 30, 2018:

	Options		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2017	280,457		$	3.76
Granted	10,617		$	6.44
Exercised	(41,644	)	$	3.18
Forfeited, cancelled or expired	(1,926	)	$	4.48
Outstanding as of June 30, 2018	247,504		$	3.96	6.40	$	695,499
Exercisable as of June 30, 2018	115,544		$	3.40	5.30	$	389,015

The weighted average grant date fair value per share of stock options granted during the six months ended June 30, 2018 was $1.19.  The total intrinsic value of stock options exercised during the six months ended June 30, 2018 and 2017 was $139,812 and $47,572, respectively.  During the six months ended June 30, 2018 the number of net settled shares which were issued as a result of stock option exercises was 12,054.

We recognized share-based payment expense associated with stock options of $20,776 and $20,125 for the three months ended June 30, 2018 and 2017, respectively, and $40,435 and $39,637 for the six months ended June 30, 2018 and 2017, respectively.

22

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

The following table summarizes the restricted stock unit, including PRSU, activity under our share-based plans for the six months ended June 30, 2018:

	Shares		Grant Date Fair Value Per Share
Nonvested as of December 31, 2017	31,323		$	4.54
Granted	7,123		$	6.27
Vested	(3,518	)	$	3.92
Forfeited	(569	)	$	4.80
Nonvested as of June 30, 2018	34,359		$	4.93

The total intrinsic value of restricted stock units, including PRSUs, vesting during the six months ended June 30, 2018 and 2017 was $22,656 and $4,802, respectively. During the six months ended June 30, 2018, the number of net settled shares which were issued as a result of restricted stock units vesting totaled 1,821. During the six months ended June 30, 2018, we granted 3,768 PRSUs to certain employees. We believe it is probable that the performance target applicable to these PRSUs will be achieved.

In connection with the cash dividends paid during the six months ended June 30, 2018, we granted 126 restricted stock units, including PRSUs, in accordance with the terms of existing award agreements. These grants did not result in any additional incremental share-based payment expense being recognized during the six months ended June 30, 2018.

We recognized share-based payment expense associated with restricted stock units, including PRSUs, of $15,439 and $10,126 for the three months ended June 30, 2018 and 2017, respectively, and $30,013 and $20,060 for the six months ended June 30, 2018 and 2017, respectively.

Total unrecognized compensation costs related to unvested share-based payment awards for stock options and restricted stock units, including PRSUs, granted to employees, members of our board of directors and third parties at June 30, 2018 and December 31, 2017 was $251,588 and $241,521, respectively.  The total unrecognized compensation costs at June 30, 2018 are expected to be recognized over a weighted-average period of 1.72 years.

401(k) Savings Plan

Sirius XM sponsors the Sirius XM Radio Inc. 401(k) Savings Plan (the “Sirius XM Plan”) for eligible employees. The Sirius XM Plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain defined limits. We match 50% of an employee’s voluntary contributions per pay period on the first 6% of an employee’s pre-tax salary up to a maximum of 3% of eligible compensation.  We may also make additional discretionary matching, true-up matching and non-elective contributions to the Sirius XM Plan.  Employer matching contributions under the Sirius XM Plan vest at a rate of 33.33% for each year of employment and are fully vested after three years of employment for all current and future contributions.  Our cash employer matching contributions are not used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution.  We recognized $2,159 and $1,835 in expense during three months ended June 30, 2018 and 2017, respectively, and $4,028 and $3,517 in expense during the six months ended June 30, 2018 and 2017, respectively, in connection with the Sirius XM Plan.

Sirius XM Holdings Inc. Deferred Compensation Plan

In 2015, we adopted the Sirius XM Holdings Inc. Deferred Compensation Plan (the “DCP”).  The DCP allows members of our board of directors and certain eligible employees to defer all or a portion of their base salary, cash incentive compensation and/or board of directors’ cash compensation, as applicable.  Pursuant to the terms of the DCP, we may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so.  We have established a grantor (or “rabbi”) trust to facilitate the payment of our obligations under the DCP.

Contributions to the DCP, net of withdrawals, for the three months ended June 30, 2018 and 2017 were $307 and $334, respectively, and for the six months ended June 30, 2018 and 2017 were $7,138 and $7,355, respectively. As of June 30, 2018 and December 31, 2017, the fair value of the investments held in the trust were $22,375 and $14,641, respectively, which is

23

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

included in Other long-term assets in our unaudited consolidated balance sheets and are classified as trading securities.  Trading gains and losses associated with these investments are recorded in Other income within our unaudited consolidated statements of comprehensive income.  The associated liability is recorded within Other long-term liabilities in our unaudited consolidated balance sheets, and any increase or decrease in the liability is recorded in General and administration expense within our unaudited consolidated statements of comprehensive income.  For the three and six months ended June 30, 2018 and 2017, we recorded an immaterial amount of unrealized gains on investments held in the trust.

(14) Commitments and Contingencies

The following table summarizes our expected contractual cash commitments as of June 30, 2018:

	2018		2019		2020		2021		2022		Thereafter		Total
Debt obligations	$	2,455	$	3,935	$	1,207	$	727	$	1,000,000	$	5,500,000	$	6,508,324
Cash interest payments	168,407		338,887		338,844		338,817		338,811		919,243		2,443,009
Satellite and transmission	59,557		94,922		51,056		4,347		2,428		4,288		216,598
Programming and content	136,122		251,953		207,728		118,706		52,475		162,938		929,922
Sales and marketing	9,990		12,817		7,701		7,446		1,644		203		39,801
Satellite incentive payments	8,001		10,652		10,197		8,574		8,558		61,767		107,749
Operating lease obligations	19,499		44,983		42,779		37,416		34,096		143,628		322,401
Royalties and other	230,132		139,285		103,414		86,253		23,199		33		582,316
Total (1)	$	634,163	$	897,434	$	762,926	$	602,286	$	1,461,211	$	6,792,100	$	11,150,120

(1) The table does not include our reserve for uncertain tax positions, which at June 30, 2018 totaled $15,344.

Debt obligations.    Debt obligations include principal payments on outstanding debt and capital lease obligations.

Cash interest payments.    Cash interest payments include interest due on outstanding debt and capital lease payments through maturity.

Satellite and transmission.    We have entered into agreements with several third parties to design, build, launch and insure two satellites, SXM-7 and SXM-8. We also have entered into agreements with third parties to operate and maintain satellite telemetry, tracking and control facilities and certain components of our terrestrial repeater networks.

Programming and content.    We have entered into various programming and content agreements. Under the terms of these agreements, our obligations include fixed payments, advertising commitments and revenue sharing arrangements. In certain of these agreements, the future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they are not included in our minimum contractual cash commitments.

Sales and marketing.    We have entered into various marketing, sponsorship and distribution agreements to promote our brand and are obligated to make payments to sponsors, retailers, automakers and radio manufacturers under these agreements. Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors.

Satellite incentive payments.    Boeing Satellite Systems International, Inc., the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments with respect to XM-3 and XM-4 meeting their fifteen-year design life, which we expect to occur.  Boeing may also be entitled to up to $10,000 of additional incentive payments if our XM-4 satellite continues to operate above baseline specifications during the five years beyond the satellite’s fifteen-year design life, which is currently not expected to occur.

Space Systems/Loral, the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments with respect to XM-5, SIRIUS FM-5 and SIRIUS FM-6 meeting their fifteen-year design life, which we expect to occur.

24

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

Operating lease obligations.    We have entered into both cancelable and non-cancelable operating leases for office space, equipment and terrestrial repeaters. These leases provide for minimum lease payments, additional operating expense charges, leasehold improvements and rent escalations that have initial terms ranging from one to fifteen years, and certain leases have options to renew. The effect of the rent holidays and rent concessions are recognized on a straight-line basis over the lease term, including reasonably assured renewal periods.

Royalties and other.    We have entered into certain music royalty arrangements that include fixed payments. We have also entered into various agreements with third parties for general operating purposes.

In addition to the minimum contractual cash commitments described above, we have entered into other variable cost arrangements. These future costs are dependent upon many factors and are difficult to anticipate; however, these costs may be substantial. We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions. We also have a surety bond of approximately $45,000 primarily used as security against non-performance in the normal course of business. We do not have any other significant off-balance sheet financing arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Legal Proceedings

In the ordinary course of business, we are a defendant or party to various claims and lawsuits, including those discussed below.

We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the reasonably possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any.

SoundExchange Royalty Claims. On June 7, 2018, Sirius XM entered into an agreement with SoundExchange, Inc., the organization that collects and distributes sound recording royalties pursuant to our statutory license, to settle the cases titled SoundExchange, Inc. v. Sirius XM Radio, Inc., No.13-cv-1290-RJL (D.D.C.), and SoundExchange, Inc. v. Sirius XM Radio, Inc., No.17-cv-02666-RJL (D.D.C.). A description of these actions is contained in our prior public filings. In connection with the settlement, we made a one-time lump sum payment of $150,000 to SoundExchange on July 6, 2018. The settlement resolved all outstanding claims, including ongoing audits, under our statutory license for sound recordings for the period January 1, 2007 through December 31, 2017.

Telephone Consumer Protection Act Suits. On March 13, 2017, Thomas Buchanan, individually and on behalf of all others similarly situated, filed a class action complaint against us in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiff in this action alleges that we violated the Telephone Consumer Protection Act of 1991 (the “TCPA”) by, among other things, making telephone solicitations to persons on the National Do-Not-Call registry, a database established to allow consumers to exclude themselves from telemarketing calls unless they consent to receive the calls in a signed, written agreement, and making calls to consumers in violation of our internal Do-Not-Call registry. The plaintiff is seeking various forms of relief, including statutory damages of five hundred dollars for each violation of the TCPA or, in the alternative, treble damages of up to fifteen hundred dollars for each knowing and willful violation of the TCPA and a permanent injunction prohibiting us from making, or having made, any calls to land lines that are listed on the National Do-Not-Call registry or our internal Do-Not-Call registry. We believe we have substantial defenses to the claims asserted in this action, and we intend to defend this action vigorously.

25

SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(UNAUDITED)

(Dollars and shares in thousands, except per share amounts)

Other Matters.  In the ordinary course of business, we are a defendant in various other lawsuits and arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases; and owners of patents, trademarks, copyrights or other intellectual property.  None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations.

(15) Income Taxes

We file a consolidated federal income tax return for all of our wholly-owned subsidiaries, including Sirius XM.  For the three months ended June 30, 2018 and 2017, income tax expense was $70,570 and $119,513, respectively, and $150,819 and $233,486 for the six months ended June 30, 2018 and 2017, respectively.

Our effective tax rate for the three months ended June 30, 2018 and 2017 was 19.4% and 37.2%, respectively. Our effective tax rate for the six months ended June 30, 2018 and 2017 was 20.6% and 36.3%, respectively. The effective tax rate for the three and six months ended June 30, 2018 was primarily impacted by the reduced federal income tax rate as a result of the Tax Act and the recognition of excess tax benefits related to share based compensation. The effective tax rate for the three and six months ended June 30, 2017 was impacted by the recognition of excess tax benefits related to share based compensation. We estimate our effective tax rate for the year ending December 31, 2018 will be approximately 22%.

As of June 30, 2018 and December 31, 2017, we had a valuation allowance related to deferred tax assets of $52,405 and $52,883, respectively, that were not likely to be realized due to certain net operating loss limitations and acquired net operating losses that were not more likely than not going to be utilized.

(16) Subsequent Events

On July 18, 2018, our board of directors declared a quarterly dividend on our common stock in the amount of $0.011 per share of common stock payable on August 31, 2018 to stockholders of record as of the close of business on August 10, 2018.

26

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

All amounts referenced in this Item 2 are in thousands, except per subscriber and per installation amounts, unless otherwise stated.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2017.

This Quarterly Report on Form 10-Q presents information for Sirius XM Holdings Inc. (“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, and "Sirius XM" refers to, our wholly-owned subsidiary Sirius XM Radio Inc. Holdings has no operations independent of its wholly-owned subsidiary, Sirius XM.

Special Note Regarding Forward-Looking Statements

The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this Quarterly Report on Form 10-Q and in other reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection” and “outlook.” Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this Quarterly Report on Form 10-Q and in other reports and documents published by us from time to time, particularly the risk factors described under “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2017 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2017.

Among the significant factors that could cause our actual results to differ materially from those expressed in the forward-looking statements are:

• we face substantial competition and that competition is likely to increase over time;

• our ability to retain subscribers or increase the number of subscribers is uncertain;

• our ability to profitably attract and retain subscribers as our marketing efforts reach more price-sensitive consumers is uncertain;

• if we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions and private litigation and our reputation could suffer;

• our service may experience harmful interference from new wireless operations;

• we engage in extensive marketing efforts and the continued effectiveness of those efforts are an important part of our business;

• consumer protection laws and their enforcement could damage our business;

• we may not realize the benefits of acquisitions or other strategic investments and initiatives;

• the unfavorable outcome of pending or future litigation could have a material adverse impact on our operations and financial condition;

• the market for music rights is changing and is subject to significant uncertainties;

• our business depends in large part upon the auto industry;

• general economic conditions can affect our business;

• existing or future laws and regulations could harm our business;

• failure of our satellites would significantly damage our business;

• interruption or failure of our information technology and communications systems could negatively impact our results and our brand;

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• rapid technological and industry changes and new entrants could adversely impact our services;

• failure of third parties to perform could adversely affect our business;

• failure to comply with FCC requirements could damage our business;

• we may from time to time modify our business plan, and these changes could adversely affect us and our financial condition;

• we have a significant amount of indebtedness, and our debt contains certain covenants that restrict our operations;

• our studios, terrestrial repeater networks, satellite uplink facilities or other ground facilities could be damaged by natural catastrophes or terrorist activities;

• our principal stockholder has significant influence, including over actions requiring stockholder approval, and its interests may differ from the interests of other holders of our common stock;

• we are a “controlled company” within the meaning of the NASDAQ listing rules and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements;

• our business may be impaired by third-party intellectual property rights; and

• while we currently pay a quarterly cash dividend to holders of our common stock, we may change our dividend policy at any time.

Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any of these forward-looking statements. In addition, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which the statement is made, to reflect the occurrence of unanticipated events or otherwise, except as required by law. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Executive Summary

We transmit music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through our two proprietary satellite radio systems.  Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand, over our Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment.  We also provide connected vehicle services.  Our connected vehicle services are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers.  

We have agreements with every major automaker (“OEMs”) to offer satellite radio in their vehicles, through which we acquire the majority of our subscribers.  We also acquire subscribers through marketing to owners and lessees of previously owned vehicles that include factory-installed satellite radios that are not currently subscribing to our services.  Our satellite radios are primarily distributed through automakers; retailers; and our website. Satellite radio services are also offered to customers of certain rental car companies.

As of June 30, 2018, we had approximately 33.5 million subscribers of which approximately 28.2 million were self-pay subscribers and approximately 5.3 million were paid promotional subscribers. Our subscriber totals include subscribers under our regular pricing plans; discounted pricing plans; subscribers that have prepaid, including payments either made or due from automakers for subscriptions included in the sale or lease price of a vehicle; subscribers to our Internet services who do not also have satellite radio subscriptions; and certain subscribers to our weather, traffic, and data services who do not also have satellite radio subscriptions.  Subscribers and subscription related revenues and expenses associated with the Sirius XM Canada service, which had approximately 2.6 million subscribers as of June 30, 2018, and connected vehicle services are not included in our subscriber count or subscriber-based operating metrics.

Our primary source of revenue is subscription fees, with most of our customers subscribing to annual, semi-annual, quarterly or monthly plans.  We offer discounts for prepaid subscription plans, as well as a multiple subscription discount.  We also derive revenue from activation and other fees, the sale of advertising on select non-music channels, the direct sale of

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satellite radios and accessories, and other ancillary services, such as our weather, traffic and data services. We provide traffic services to approximately 8.1 million vehicles.

In many cases, a subscription to our radio service is included with the purchase of new or previously owned vehicles. The length of these subscriptions varies but is typically three to twelve months.  We receive payments for these subscriptions from certain automakers.  We also reimburse various automakers for certain costs associated with satellite radios installed in new vehicles and pay revenue share to various automakers.

As of June 30, 2018, Liberty Media beneficially owned, directly and indirectly, approximately 70% 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.

Sirius XM holds an equity method investment in Sirius XM Canada Holdings Inc. (“Sirius XM Canada”), which offers satellite radio services in Canada. As of June 30, 2018, Sirius XM owned an approximate 70% equity interest and 33% voting interest in Sirius XM Canada.

Sirius XM holds an investment in Pandora Media, Inc. (“Pandora”), which operates an internet-based music discovery platform, offering a personalized experience for listeners. As of June 30, 2018, Sirius XM's interest in Pandora represented an approximately 18% interest in Pandora's outstanding common stock, and an approximately 15% interest on an as-converted basis.

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Results of Operations

Set forth below are our results of operations for the three and six months ended June 30, 2018 compared with the three and six months ended June 30, 2017.

													2018 vs 2017 Change
	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Three Months					Six Months
	2018			2017			2018			2017			Amount			%		Amount			%
Revenue:
Subscriber revenue	$	1,138,962		$	1,111,011		$	2,256,046		$	2,189,268		$	27,951		3	%	$	66,778		3	%
Advertising revenue	47,242			40,178			89,290			76,194			7,064			18	%	13,096			17	%
Equipment revenue	36,840			29,674			71,929			59,332			7,166			24	%	12,597			21	%
Music royalty fee and other revenue	209,255			166,706			390,136			316,841			42,549			26	%	73,295			23	%
Total revenue	1,432,299			1,347,569			2,807,401			2,641,635			84,730			6	%	165,766			6	%
Operating expenses:
Cost of services:
Revenue share and royalties	404,284			292,893			714,416			570,193			111,391			38	%	144,223			25	%
Programming and content	105,650			96,255			206,486			191,799			9,395			10	%	14,687			8	%
Customer service and billing	95,582			95,324			189,447			192,099			258			—	%	(2,652		)	(1	)%
Satellite and transmission	23,478			19,603			46,200			40,179			3,875			20	%	6,021			15	%
Cost of equipment	7,674			9,371			14,771			16,283			(1,697		)	(18	)%	(1,512		)	(9	)%
Subscriber acquisition costs	119,778			125,154			242,471			252,642			(5,376		)	(4	)%	(10,171		)	(4	)%
Sales and marketing	119,435			106,707			226,146			203,616			12,728			12	%	22,530			11	%
Engineering, design and development	27,485			27,783			58,122			51,600			(298		)	(1	)%	6,522			13	%
General and administrative	92,683			84,607			177,289			162,808			8,076			10	%	14,481			9	%
Depreciation and amortization	74,623			73,519			146,835			150,223			1,104			2	%	(3,388		)	(2	)%
Total operating expenses	1,070,672			931,216			2,022,183			1,831,442			139,456			15	%	190,741			10	%
Income from operations	361,627			416,353			785,218			810,193			(54,726		)	(13	)%	(24,975		)	(3	)%
Other income (expense):
Interest expense	(86,917		)	(82,794		)	(176,706		)	(164,451		)	(4,123		)	(5	)%	(12,255		)	(7	)%
Other income (expense)	88,212			(11,937		)	124,100			(3,074		)	100,149			nm		127,174			nm
Total other income (expense)	1,295			(94,731		)	(52,606		)	(167,525		)	96,026			101	%	114,919			69	%
Income before income taxes	362,922			321,622			732,612			642,668			41,300			13	%	89,944			14	%
Income tax expense	(70,570		)	(119,513		)	(150,819		)	(233,486		)	48,943			41	%	82,667			35	%
Net income	$	292,352		$	202,109		$	581,793		$	409,182		$	90,243		45	%	$	172,611		42	%

nm - not meaningful

Total Revenue

Subscriber Revenue includes subscription, activation and other fees.

For the three months ended June 30, 2018 and 2017, subscriber revenue was $1,138,962 and $1,111,011, respectively, an increase of 3%, or $27,951. For the six months ended June 30, 2018 and 2017, subscriber revenue was $2,256,046 and

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$2,189,268, respectively, an increase of 3%, or $66,778. The increases were primarily attributable to a 5% increase in the daily weighted average number of subscribers. Subscriber revenue was negatively impacted by $23,787 and $48,179, for the three and six months ended June 30, 2018, respectively, from the adoption of Accounting Standards Update ("ASU") 2014-09, Revenue - Revenue from Contracts with Customers, and all related amendments, which established Accounting Standards Codification ("ASC") Topic 606 (the "new revenue standard"), effective as of January 1, 2018.

We expect subscriber revenues to increase based on the growth of our subscriber base, increases in the average price charged and the sale of additional services to subscribers.

Advertising Revenue includes the sale of advertising on certain non-music channels.

For the three months ended June 30, 2018 and 2017, advertising revenue was $47,242 and $40,178, respectively, an increase of 18%, or $7,064. For the six months ended June 30, 2018 and 2017, advertising revenue was $89,290 and $76,194, respectively, an increase of 17%, or $13,096. The increases were primarily due to a greater number of advertising spots sold and transmitted as well as increases in rates charged per spot.

We expect our advertising revenue to continue to grow as more advertisers are attracted to our national platform and growing subscriber base and as we launch additional non-music channels.

Equipment Revenue includes revenue from the sale of satellite radios, components and accessories as well as the sale of connected vehicle devices and royalty revenue on chipset modules.

For the three months ended June 30, 2018 and 2017, equipment revenue was $36,840 and $29,674, respectively, an increase of 24%, or $7,166. For the six months ended June 30, 2018 and 2017, equipment revenue was $71,929 and $59,332, respectively, an increase of 21%, or $12,597. The increases were driven by additional royalty revenue due to our transition to a new generation of chipsets and revenue from the sales of connected vehicle devices, partially offset by lower satellite radio sales to consumers.

We expect equipment revenue to increase as royalty revenues associated with certain new chipsets increases.

Music Royalty Fee and Other Revenue includes amounts earned from subscribers for the U.S. Music Royalty Fee, and service and advisory revenue from our Canadian affiliate, our connected vehicle services, and ancillary revenues.

For the three months ended June 30, 2018 and 2017, other revenue was $209,255 and $166,706, respectively, an increase of 26%, or $42,549. For the six months ended June 30, 2018 and 2017, other revenue was $390,136 and $316,841, respectively, an increase of 23%, or $73,295. The increases were primarily driven by U.S. Music Royalty Fee revenue due to subscribers paying at a higher rate and an increase in the number of subscribers, higher revenue generated from our connected vehicle services, and revenue from Sirius XM Canada, which was mitigated by a one-time activation revenue resolution with Sirius XM Canada recorded in the second quarter of 2017.

Other revenue is expected to increase due to an increase in U.S. Music Royalty Fees as subscribers migrate to the new rate and as our subscriber base grows.

Operating Expenses

Revenue Share and Royalties include royalties for transmitting content and web streaming as well as automaker, content provider and advertising revenue share.

For the three months ended June 30, 2018 and 2017, revenue share and royalties were $404,284 and $292,893, respectively, an increase of 38%, or $111,391, and increased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, revenue share and royalties were $714,416 and $570,193, respectively, an increase of 25%, or $144,223, and increased as a percentage of total revenue. The increases were primarily due to a $69,144 charge related to the legal settlement that resolved all outstanding claims, including ongoing audits, under our statutory license for sound recordings for the period January 1, 2007 through December 31, 2017, an increase in the statutory royalty rate applicable to our use of post-1972 recordings, which increased from 11% in 2017 to 15.5% in 2018 and overall greater revenues subject to revenue share with the automakers. The increase was partially offset by approximately $22,235 and $44,304, for the three and six months ended June 30, 2018, respectively, related to the adoption of the new revenue standard effective as of January 1, 2018.

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We expect our revenue share and royalty costs to increase as our revenues grow and as a result of the increase in the royalty rate.

Programming and Content includes costs to acquire, create, promote and produce content. We have entered into various agreements with third parties for music and non-music programming that require us to pay license fees and other amounts.

For the three months ended June 30, 2018 and 2017, programming and content expenses were $105,650 and $96,255, respectively, an increase of 10%, or $9,395, and increased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, programming and content expenses were $206,486 and $191,799, respectively, an increase of 8%, or $14,687, and increased as a percentage of total revenue. The increases were primarily due to increased personnel-related costs, programming operations costs related to subscriber events, and higher music license fees.

We expect our programming and content expenses to increase as we offer additional programming, and renew or replace expiring agreements.

Customer Service and Billing includes costs associated with the operation and management of internal and third party customer service centers, and our subscriber management systems as well as billing and collection costs, bad debt expense, and transaction fees.

For the three months ended June 30, 2018 and 2017, customer service and billing expenses were $95,582 and $95,324, respectively, a slight increase of $258, but decreased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, customer service and billing expenses were $189,447 and $192,099, respectively, a decrease of 1%, or $2,652, and decreased as a percentage of total revenue. The increased expenses for the three month period was driven primarily by increased transaction fees from a larger subscriber base and overhead costs, offset by lower call center costs due to lower agent and contact rates, and bad debt expense. The decreased expenses for the six month period was driven by lower call center costs due to lower agent and contact rates, and bad debt expense, partially offset by increased transaction fees from a larger subscriber base and overhead costs.

We expect our customer service and billing expenses to increase as our subscriber base grows.

Satellite and Transmission consists of costs associated with the operation and maintenance of our terrestrial repeater networks; satellites; satellite telemetry, tracking and control systems; satellite uplink facilities; studios; and delivery of our Internet streaming and connected vehicle services.

For the three months ended June 30, 2018 and 2017, satellite and transmission expenses were $23,478 and $19,603, respectively, an increase of 20%, or $3,875, and increased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, satellite and transmission expenses were $46,200 and $40,179, respectively, an increase of 15%, or $6,021, and increased as a percentage of total revenue. The increases were primarily driven by higher wireless costs associated with our connected vehicle services and higher Internet streaming costs.

We expect satellite and transmission expenses to increase as costs associated with our investment in Internet streaming increase.

Cost of Equipment includes costs from the sale of satellite radios, components and accessories as well as connected vehicle devices, and provisions for inventory allowance attributable to products purchased for resale in our direct to consumer distribution channels.

For the three months ended June 30, 2018 and 2017, cost of equipment was $7,674 and $9,371, respectively, a decrease of 18%, or $1,697, and decreased as a percentage of equipment revenue. For the six months ended June 30, 2018 and 2017, cost of equipment was $14,771 and $16,283, respectively, a decrease of 9%, or $1,512, and decreased as a percentage of equipment revenue. The decreases were primarily due to lower satellite radio sales to consumers.

We expect cost of equipment to fluctuate with changes in sales of aftermarket radios.

Subscriber Acquisition Costs include hardware subsidies paid to radio manufacturers, distributors and automakers; subsidies paid for chipsets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets; product warranty obligations; and freight. The majority of subscriber acquisition costs are incurred and expensed in advance of acquiring a subscriber. Subscriber acquisition costs do not include advertising costs, marketing, loyalty payments to distributors and dealers of satellite radios or revenue share payments to automakers and retailers of satellite radios.

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For the three months ended June 30, 2018 and 2017, subscriber acquisition costs were $119,778 and $125,154, respectively, a decrease of 4%, or $5,376, and decreased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, subscriber acquisition costs were $242,471 and $252,642, respectively, a decrease of 4%, or $10,171, and decreased as a percentage of total revenue. The decreases were driven by reductions to OEM hardware subsidy rates, lower subsidized costs related to the transition of chipsets, and a decrease in the volume of installations.

We expect subscriber acquisition costs to fluctuate with OEM installations and aftermarket volume; however, the subsidized chipsets cost is expected to decline as we transition to a new generation of chipsets.  We intend to continue to offer subsidies and other incentives to induce OEMs to include our technology in their vehicles.

Sales and Marketing includes costs for marketing, advertising, media and production, including promotional events and sponsorships; cooperative marketing; and personnel. Marketing costs include expenses related to direct mail, outbound telemarketing and email communications.

For the three months ended June 30, 2018 and 2017, sales and marketing expenses were $119,435 and $106,707, respectively, an increase of 12%, or $12,728, and increased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, sales and marketing expenses were $226,146 and $203,616, respectively, an increase of 11%, or $22,530, and increased as a percentage of total revenue. The increases were primarily due to additional subscriber communications, retention programs and acquisition campaigns, as well as higher personnel-related costs.

We anticipate that sales and marketing expenses will increase as we expand programs to retain our existing subscribers, win back former subscribers, and attract new subscribers.

Engineering, Design and Development consists primarily of compensation and related costs to develop chipsets and new products and services, including streaming and connected vehicle services, research and development for broadcast information systems and costs associated with the incorporation of our radios into new vehicles manufactured by automakers.

For the three months ended June 30, 2018 and 2017, engineering, design and development expenses were $27,485 and $27,783, respectively, a decrease of 1%, or $298, and decreased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, engineering, design and development expenses were $58,122 and $51,600, respectively, an increase of 13%, or $6,522, and increased as a percentage of total revenue. The decrease for the three month period was driven by lower costs associated with the development of video streaming and our connected vehicle services, partially offset by higher costs associated with the development of our audio streaming product. The increase for the six month period was driven by the additional costs associated with our connected vehicle services and the development of our audio streaming product; partially offset by lower costs associated with the development of our video streaming product.

We expect engineering, design and development expenses to increase in future periods as we continue to develop our infrastructure, products and services.

General and Administrative primarily consists of compensation and related costs for personnel and facilities, and include costs related to our finance, legal, human resources and information technologies departments.

For the three months ended June 30, 2018 and 2017, general and administrative expenses were $92,683 and $84,607, respectively, an increase of 10%, or $8,076, and increased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, general and administrative expenses were $177,289 and $162,808, respectively, an increase of 9%, or $14,481, and increased as a percentage of total revenue. The increases were primarily driven by higher personnel-related costs and a one-time sales and use tax, partially offset by lower legal costs.

We expect our general and administrative expenses to increase to support the growth of our business.

Depreciation and Amortization represents the recognition in earnings of the cost of assets used in operations, including our satellite constellations, property, equipment and intangible assets, over their estimated service lives.

For the three months ended June 30, 2018 and 2017, depreciation and amortization expense was $74,623 and $73,519, respectively, an increase of 2%, or $1,104, but decreased as a percentage of total revenue. For the six months ended June 30, 2018 and 2017, depreciation and amortization expense was $146,835 and $150,223, respectively, a decrease of 2%, or $3,388, and decreased as a percentage of total revenue. The increase for the three month period was driven by additional assets placed in-service, partially offset by lower amortization expense due to our subscriber relationships and

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certain software assets being fully amortized during 2017. The decrease for the six month period was driven by lower amortization expense due to our subscriber relationships and certain software assets being fully amortized during 2017, partially offset by additional assets placed in-service.

Other Income (Expense)

Interest Expense includes interest on outstanding debt.

For the three months ended June 30, 2018 and 2017, interest expense was $86,917 and $82,794, respectively, an increase of 5%, or $4,123. For the six months ended June 30, 2018 and 2017, interest expense was $176,706 and $164,451, respectively, an increase of 7%, or $12,255.The increases were primarily due to higher average debt.

Other Income (Expense) primarilyincludes realized and unrealized gains and losses, interest and dividend income, our share of the income or loss of Sirius XM Canada, and transaction costs related to non-operating investments.

For the three months ended June 30, 2018 and 2017, other income (expense) was $88,212 and $(11,937), respectively. For the six months ended June 30, 2018 and 2017, other income (expense) was $124,100 and $(3,074), respectively. For the three and six months ended June 30, 2018, other income was driven by unrealized gains of $86,074 and $117,449 from a fair value adjustment of our investment in Pandora, respectively, and interest earned on our loan to Sirius XM Canada. For the three and six months ended June 30, 2017, other loss was driven by transaction costs associated with our investment in Pandora and our share of Sirius XM Canada's net loss.

Income Taxes

Income Tax Expense includes the change in our deferred tax assets, foreign withholding taxes and current federal and state tax expenses.

For the three months ended June 30, 2018 and 2017, income tax expense was $70,570 and $119,513, respectively, and $150,819 and $233,486 for the six months ended June 30, 2018 and 2017, respectively.

Our effective tax rate for the three months ended June 30, 2018 and 2017 was 19.4% and 37.2%, respectively. Our effective tax rate for the six months ended June 30, 2018 and 2017 was 20.6% and 36.3%, respectively. The effective tax rate for the three and six months ended June 30, 2018 was primarily impacted by the reduced federal income tax rate as a result of the Tax Act and the recognition of excess tax benefits related to share based compensation. The effective tax rate for the three and six months ended June 30, 2017 was impacted by the recognition of excess tax benefits related to share based compensation. We estimate our effective tax rate for the year ending December 31, 2018 will be approximately 22%.

Key Financial and Operating Performance Metrics

In this section, we present certain financial performance measures some of which are not calculated and presented in accordance with generally accepted accounting principles in the United States (“Non-GAAP”), which include free cash flow and adjusted EBITDA. We also present certain operating performance measures, which include average monthly revenue per subscriber, or ARPU; customer service and billing expenses, per average subscriber; and subscriber acquisition cost, or SAC, per installation. Our adjusted EBITDA excludes the impact of share-based payment expense and certain purchase price accounting adjustments related to the merger of Sirius and XM (the “Merger”).  Additionally, when applicable, our adjusted EBITDA metric excludes the effect of significant items that do not relate to the on-going performance of our business.  We use these Non-GAAP financial and operating performance measures to manage our business, to set operational goals and as a basis for determining performance-based compensation for our employees. See the accompanying glossary on pages 39 through 43 for more details and for the reconciliation to the most directly comparable GAAP measure (where applicable).

We believe these Non-GAAP financial and operating performance measures provide useful information to investors regarding our financial condition and results of operations. We believe investors find these Non-GAAP financial and operating performance measures useful in evaluating our core trends because they provide a direct view of our underlying costs. We believe investors use our adjusted EBITDA to estimate our current enterprise value and to make investment decisions. We believe free cash flow provides useful supplemental information to investors regarding our cash available for future subscriber acquisitions and capital expenditures, to repurchase or retire debt, to acquire other companies and our ability to return capital to stockholders. By providing these Non-GAAP financial and operating performance measures, together with the reconciliations to the most directly comparable GAAP measure (where applicable), we believe we are enhancing investors' understanding of our business and our results of operations.

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Our Non-GAAP financial measures should be viewed in addition to, and not as an alternative for or superior to, our reported results prepared in accordance with GAAP.  In addition, our Non-GAAP financial measures may not be comparable to similarly-titled measures by other companies.  Please refer to the glossary (pages 39 through 43) for a further discussion of such Non-GAAP financial and operating performance measures and reconciliations to the most directly comparable GAAP measure (where applicable).  Subscribers and subscription related revenues and expenses associated with our connected vehicle services and Sirius XM Canada are not included in our subscriber count or subscriber-based operating metrics.

Set forth below are our subscriber balances as ofJune 30, 2018compared toJune 30, 2017.

	As of June 30,		2018 vs 2017 Change
	2018	2017	Amount		%
Self-pay subscribers	28,203	26,675	1,528		6	%
Paid promotional subscribers	5,292	5,372	(80	)	(1	)%
Ending subscribers (a)	33,495	32,048	1,447		5	%

(a) Amounts may not sum as a result of rounding.

The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the three and six months ended June 30, 2018 and 2017. The ARPU and SAC, per installation, metrics for the three months ended June 30, 2018 have been reduced due to the adoption of the new revenue standard as of January 1, 2018 by $0.24 and $0.24, respectively. The ARPU and SAC, per installation, metrics for the six months ended June 30, 2018 have been reduced due to the adoption of the new revenue standard as of January 1, 2018 by $0.24 and $0.28, respectively. For more information regarding the impact on these metrics, refer to the glossary (pages 39 through 43). For more information regarding the adoption of the new revenue standard, refer to Note 2 to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

													2018 vs 2017 Change
	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Three Months					Six Months
	2018			2017			2018			2017			Amount			%		Amount			%
Self-pay subscribers	483			466			690			725			17			4	%	(35		)	(5	)%
Paid promotional subscribers	(54		)	(20		)	69			(23		)	(34		)	(170	)%	92			400	%
Net additions (a)	429			445			759			702			(16		)	(4	)%	57			8	%
Daily weighted average number of subscribers	33,197			31,746			33,013			31,559			1,451			5	%	1,454			5	%
Average self-pay monthly churn	1.6		%	1.7		%	1.7		%	1.8		%	(0.1		)%	(6	)%	(0.1		)%	(6	)%
New vehicle consumer conversion rate	39		%	40		%	39		%	40		%	(1		)%	(3	)%	(1		)%	(3	)%
ARPU	$	13.30		$	13.22		$	13.13		$	13.08		$	0.08		1	%	$	0.05		—	%
SAC, per installation	$	27.54		$	31.19		$	27.86		$	30.18		$	(3.65	)	(12	)%	$	(2.32	)	(8	)%
Customer service and billing expenses, per average subscriber	$	0.89		$	0.94		$	0.88		$	0.95		$	(0.05	)	(5	)%	$	(0.07	)	(7	)%
Adjusted EBITDA	$	543,422		$	521,936		$	1,075,271		$	1,023,739		$	21,486		4	%	$	51,532		5	%
Free cash flow	$	486,243		$	416,725		$	812,705		$	665,664		$	69,518		17	%	$	147,041		22	%
Diluted weighted average common shares outstanding (GAAP)	4,589,095			4,735,592			4,588,986			4,759,741			(146,497		)	(3	)%	(170,755		)	(4	)%

(a) Amounts may not sum as a result of rounding.

Subscribers. At June 30, 2018, we had approximately 33.5 million subscribers, an increase of 1.4 million subscribers, or 5%, from the approximately 32.0 million subscribers as of June 30, 2017. The increase in total subscribers was primarily due to growth in our self-pay subscriber base, which increased 1.5 million, partially offset by an 80 thousand decrease in paid promotional subscribers. The increase in self-pay subscribers was primarily from original and subsequent owner trial conversions and subscriber win back programs, partially offset by deactivations.

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For the three months ended June 30, 2018 and 2017, net additions were 429 thousand and 445 thousand, respectively, a decrease of 4%. Paid promotional net additions declined due to paid promotional ends out-pacing paid-promotional starts during the three months ended June 30, 2018. Self-pay net additions increased due to growth in trial conversions and subscriber win backs and improvements in our non-pay churn. For the six months ended June 30, 2018 and 2017, net additions were 759 thousand and 702 thousand, respectively, an increase of 8%. For the six month period, growth in paid promotional net additions was due to paid promotional subscription starts out-pacing paid promotional subscription ends as a result of higher shipments from automakers offering paid promotional subscriptions while self-pay net additions decreased due to growth in vehicle turnover out-pacing growth in trial conversions and subscriber win backs.

Average Self-pay Monthly Churn is derived by dividing the monthly average of self-pay deactivations for the period by the average number of self-pay subscribers for the period. (See accompanying glossary on pages 39 through 43 for more details.)

For the three months ended June 30, 2018 and 2017, our average self-pay monthly churn rate was 1.6% and 1.7%, respectively. For the six months ended June 30, 2018 and 2017, our average self-pay monthly churn rate was 1.7% and 1.8%, respectively. The decreases in churn were primarily driven by improvements in non-pay and voluntary churn.

New Vehicle Consumer Conversion Rate is the percentage of owners and lessees of new vehicles that receive our service and convert to become self-paying subscribers after an initial promotional period. The metric excludes rental and fleet vehicles.(See accompanying glossary on pages 39 through 43 for more details.)

For the three months ended June 30, 2018 and 2017, our new vehicle consumer conversion rate was 39% and 40%, respectively. For the six months ended June 30, 2018 and 2017, our new vehicle consumer conversion rate was 39% and 40%, respectively.  The decreasein new vehicle consumer conversion rate was driven primarily by a decline in conversion of first time trial subscribers.

ARPU is derived from total earned subscriber revenue (excluding revenue derived from our connected vehicle services), net advertising revenue and other subscription-related revenue, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. (See the accompanying glossary on pages 39 through 43 for more details.)

For the three months ended June 30, 2018 and 2017, ARPU was $13.30 and $13.22, respectively. For the six months ended June 30, 2018 and 2017, ARPU was $13.13 and $13.08, respectively. The increase in certain of our subscription rates, including the U. S. Music Royalty Fee, and higher advertising revenue was offset by the impact of the adoption of the new revenue standard, effective as of January 1, 2018 of $0.24 for both the three and six month periods, and the growth in subscription discounts offered through customer acquisition and retention programs.

SAC, Per Installation, is derived from subscriber acquisition costs and margins from the sale of radios, components and accessories (excluding connected vehicle services), divided by the number of satellite radio installations in new vehicles and shipments of aftermarket radios for the period. (See the accompanying glossary on pages 39 through 43 for more details.)

For the three months ended June 30, 2018 and 2017, SAC, per installation, was $27.54 and $31.19, respectively. For the six months ended June 30, 2018 and 2017, SAC, per installation, was $27.86 and $30.18, respectively.  The decreases were driven by reductions to OEM hardware subsidy rates, our transition to a new generation of chipsets as well as the impact of the adoption of the new revenue standard, effective as of January 1, 2018 of $0.24 and $0.28 for the three and six months ended June 30, 2018, respectively.

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. (See the accompanying glossary on pages 39 through 43 for more details.)

For the three months ended June 30, 2018 and 2017, customer service and billing expenses, per average subscriber, was $0.89 and $0.94, respectively. For the six months ended June 30, 2018 and 2017, customer service and billing expenses, per average subscriber, was $0.88 and $0.95, respectively. The decreases were primarily related to lower call center costs due to lower contact rates, agent rates, and bad debt expense.

Adjusted EBITDA. EBITDA is defined as net income before interest expense, income tax expense and depreciation and amortization.  Adjusted EBITDA excludes the impact of other income, loss on extinguishment of debt, other non-cash charges, such as certain purchase price accounting adjustments, share-based payment expense, loss on disposal of assets, and legal

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settlements and reserves related to the historical use of sound recordings. (See the accompanying glossary on pages 39 through 43 for a reconciliation to GAAP and for more details.)

For the three months ended June 30, 2018 and 2017, adjusted EBITDA was $543,422 and $521,936, respectively, an increase of 4%, or $21,486. For the six months ended June 30, 2018 and 2017, adjusted EBITDA was $1,075,271 and $1,023,739, respectively, an increase of 5%, or $51,532.  The increases were due to growth of 6% in total revenue which was primarily a result of the increase in our subscriber base and certain of our subscription rates, additional revenues from the U.S. Music Royalty Fee, and an increase in other revenue from the new Sirius XM Canada service and advisory agreements as well as lower subscriber acquisition costs. The increases were partially offset by higher revenue share and royalty, programming and content, sales and marketing, engineering, design and development, and general and administrative costs.

Free Cash Flow includes cash provided by operations, net of additions to property and equipment, and restricted and other investment activity. (See the accompanying glossary on pages 39 through 43 for a reconciliation to GAAP and for more details.)

For the three months ended June 30, 2018 and 2017, free cash flow was $486,243 and $416,725, respectively, an increase of $69,518, or 17%. For the six months ended June 30, 2018 and 2017, free cash flow was $812,705 and $665,664, respectively, an increase of $147,041, or 22%.  For the three month periods, the increase was driven by higher net cash provided by operating activities resulting from improved operating performance, the timing of payments to vendors, and the timing of interest payments, partially offset by an increase in additions to property and equipment resulting from new satellite construction. For the six month periods, the increase was driven by higher net cash provided by operating activities resulting from improved operating performance, the timing of payments to vendors, and the payment of a legal settlement during the first quarter of 2017, partially offset by an increase in additions to property and equipment resulting from new satellite construction.

Liquidity and Capital Resources

Cash Flows for the six months ended June 30, 2018 compared with the six months ended June 30, 2017

The following table presents a summary of our cash flow activity for the periods set forth below:

	For the Six Months Ended June 30,
	2018			2017			2018 vs 2017
Net cash provided by operating activities	$	994,116		$	792,536		$	201,580
Net cash used in investing activities	(184,307		)	(667,248		)	482,941
Net cash used in financing activities	(814,728		)	(296,057		)	(518,671		)
Net decrease in cash, cash equivalents and restricted cash	(4,919		)	(170,769		)	165,850
Cash, cash equivalents and restricted cash at beginning of period	79,374			223,828			(144,454		)
Cash, cash equivalents and restricted cash at end of period	$	74,455		$	53,059		$	21,396

Cash Flows Provided by Operating Activities

Cash flows provided by operating activities increased by $201,580 to $994,116 for the six months ended June 30, 2018 from $792,536 for the six months ended June 30, 2017.

Our largest source of cash provided by operating activities is generated by subscription and subscription-related revenues.  We also generate cash from the sale of advertising on certain non-music channels and the sale of satellite radios, components and accessories.  Our primary uses of cash from operating activities include revenue share and royalty payments to distributors, programming and content providers, and payments to radio manufacturers, distributors and automakers. In addition, uses of cash from operating activities include payments to vendors to service, maintain and acquire subscribers, general corporate expenditures, and compensation and related costs.

Cash Flows Used in Investing Activities

Cash flows used in investing activities in the six months ended June 30, 2018 and 2017 were primarily due to additional spending to construct replacement satellites, improve our terrestrial repeater network, for capitalized software, and deferred compensation. We spent $79,962 and $35,494 to construct replacement satellites during the six months ended June 30, 2018 and 2017, respectively. In addition, cash flows used in investing activities in the first half of 2017 were primarily due to our investment in Pandora of $172,500, loans to related parties of $130,794, payments to acquire additional ownership in related

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parties (net of transaction costs) of $129,676, and the acquisition of Automatic Labs Inc. for $107,056 (net of cash and restricted cash acquired). 

Cash Flows Used in Financing Activities

Cash flows used in financing activities consists of the issuance and repayment of long-term debt, the purchase of common stock under our share repurchase program, the payment of cash dividends and taxes paid in lieu of shares issued for stock-based compensation.  Proceeds from long-term debt have been used to fund our operations, construct and launch new satellites, invest in other infrastructure improvements and purchase shares of our common stock.

Cash flows used in financing activities in the six months ended June 30, 2018 were primarily due to the purchase and retirement of shares of our common stock under our repurchase program for $334,215, the payment of cash dividends of $98,684, repayment under the Credit Facility of $302,611 and payment of $71,501 for taxes paid in lieu of shares issued for share-based compensation. Cash flows used in financing activities in the six months ended June 30, 2017 were primarily due to the purchase and retirement for $783,824 of shares of our common stock under our repurchase program, payment of cash dividends of $93,638 and payment of $22,595 for taxes paid in lieu of shares issued for share-based compensation, partially offset by net borrowings of $610,000 under the Credit Facility.

Future Liquidity and Capital Resource Requirements

Based upon our current business plans, we expect to fund operating expenses, capital expenditures, including the construction of replacement satellites, working capital requirements, legal settlements, interest payments, taxes and scheduled maturities of our debt with existing cash, cash flow from operations and borrowings under our Credit Facility.  As of June 30, 2018, $1,750,000 was available for future borrowing under our Credit Facility.  We believe that we have sufficient cash and cash equivalents, as well as debt capacity, to cover our estimated short-term and long-term funding needs of our satellite spend, as well as fund stock repurchases, future dividend payments and strategic opportunities.

Our ability to meet our debt and other obligations depends on our future operating performance and on economic, financial, competitive and other factors. We continually review our operations for opportunities to adjust the timing of expenditures to ensure that sufficient resources are maintained.

We regularly evaluate our business plans and strategy. These evaluations often result in changes to our business plans and strategy, some of which may be material and significantly change our cash requirements. These changes in our business plans or strategy may include: the acquisition of unique or compelling programming; the development and introduction of new features or services; significant new or enhanced distribution arrangements; investments in infrastructure, such as satellites, equipment or radio spectrum; and acquisitions and investments, including acquisitions and investments that are not directly related to our satellite radio business.

Capital Return Program

As of June 30, 2018, our board of directors had authorized for repurchase an aggregate of $12,000,000 of our common stock.  As of June 30, 2018, our cumulative repurchases since December 2012 under our stock repurchase program totaled 2,529,978 shares for $9,694,181, and $2,305,819 remained available for additional repurchases under our existing stock repurchase program authorization.

Shares of common stock may be purchased from time to time on the open market and in privately negotiated transactions, including in accelerated stock repurchase transactions and transactions with Liberty Media and its affiliates. We intend to fund the additional repurchases through a combination of cash on hand, cash generated by operations and future borrowings.

On July 18, 2018, our board of directors declared a quarterly dividend on our common stock in the amount of $0.011 per share of common stock payable on August 31, 2018 to stockholders of record as of the close of business on August 10, 2018. Our board of directors expects to declare regular quarterly dividends, in an aggregate annual amount of $0.044 per share of common stock.

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Debt Covenants

The indentures governing Sirius XM's senior notes and the agreement governing the Credit Facility include restrictive covenants.  As of June 30, 2018, we were in compliance with such covenants.  For a discussion of our “Debt Covenants,” refer to Note 11 to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Off-Balance Sheet Arrangements

We do not have any significant off-balance sheet arrangements other than those disclosed in Note 14 to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Contractual Cash Commitments

For a discussion of our “Contractual Cash Commitments,” refer to Note 14 to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Related Party Transactions

For a discussion of “Related Party Transactions,” refer to Note 10 to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Estimates

For a discussion of our “Critical Accounting Policies and Estimates,” refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017. There have been no material changes to our critical accounting policies and estimates since December 31, 2017.

We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption.For more information regarding the adoption of the new revenue standard, refer to Note 2 to our unaudited consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Glossary

Adjusted EBITDA- EBITDA is defined as net income before interest expense, income tax expense and depreciation and amortization. We adjust EBITDA to exclude the impact of other income as well as certain other charges discussed below. Adjusted EBITDA is a Non-GAAP financial measure that excludes (if applicable): (i) certain adjustments as a result of the purchase price accounting for the Merger, (ii) share-based payment expense and (iii) other significant operating expense (income) that do not relate to the on-going performance of our business. 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 capital structure and purchase price accounting. We believe investors find this Non-GAAP financial measure useful when analyzing our past operating performance with our current performance and comparing our operating performance to the performance of other communications, entertainment and media companies. We believe investors use adjusted EBITDA to estimate our current enterprise value and to make investment decisions. As a result of large capital investments in our satellite radio system, our results of operations reflect significant charges for depreciation expense. We believe the exclusion of share-based payment expense is useful as it is not directly related to the operational conditions of our business. We also believe the exclusion of the legal settlements and reserves related to the historical use of sound recordings, loss on extinguishment of debt and loss on disposal of assets, to the extent they occur during the period, is useful as they are significant expenses not incurred as part of our normal operations for the period.

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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. 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 unaudited 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:

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2018			2017		2018			2017
Net income:	$	292,352		$	202,109	$	581,793		$	409,182
Add back items excluded from Adjusted EBITDA:
Purchase price accounting adjustments:
Revenues	1,813			1,813		3,626			3,626
Sound recording legal settlements and reserves	69,144			—		69,144			—
Share-based payment expense	36,215			30,251		70,448			59,697
Depreciation and amortization	74,623			73,519		146,835			150,223
Interest expense	86,917			82,794		176,706			164,451
Other (income) expense	(88,212		)	11,937		(124,100		)	3,074
Income tax expense	70,570			119,513		150,819			233,486
Adjusted EBITDA	$	543,422		$	521,936	$	1,075,271		$	1,023,739

ARPU- is derived from total earned subscriber revenue, advertising revenue and other subscription-related revenue, excluding revenue associated with our connected vehicle services, divided bythe 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.  The ARPU for the three and six months ended June 30, 2018 reflects adjustments as a result of adopting the new revenue standard as of January 1, 2018. ARPU is calculated as follows:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Subscriber revenue, excluding connected vehicle services	$	1,112,652	$	1,090,356	$	2,204,901	$	2,148,410
Add: advertising revenue	47,242		40,178		89,290		76,194
Add: other subscription-related revenue	165,058		128,179		305,874		252,647
	$	1,324,952	$	1,258,713	$	2,600,065	$	2,477,251
Daily weighted average number of subscribers	33,197		31,746		33,013		31,559
ARPU	$	13.30	$	13.22	$	13.13	$	13.08

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The table below illustrates the impact that the adoption of the new revenue standard had on ARPU for thethree and six months ended June 30, 2018.

	For the Three Months Ended June 30, 2018						For the Six Months Ended June 30, 2018
	As Reported		Impact of Adopting ASU 2014-09		Balances Without Adoption of ASU 2014-09		As Reported		Impact of Adopting ASU 2014-09		Balances Without Adoption of ASU 2014-09
Subscriber revenue, excluding connected vehicle services	$	1,112,652	$	23,787	$	1,136,439	$	2,204,901	$	48,179	$	2,253,080
Add: advertising revenue	47,242		—		47,242		89,290		—		89,290
Add: other subscription-related revenue	165,058		—		165,058		305,874		—		305,874
	$	1,324,952	$	23,787	$	1,348,739	$	2,600,065	$	48,179	$	2,648,244
Daily weighted average number of subscribers	33,197		33,197		33,197		33,013		33,013		33,013
ARPU	$	13.30	$	0.24	$	13.54	$	13.13	$	0.24	$	13.37

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 as share-based payment expense is not directly related 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:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Customer service and billing expenses, excluding connected vehicle services	$	89,335		$	90,388		$	177,068		$	182,508
Less: share-based payment expense	(1,077		)	(1,029		)	(2,141		)	(2,040		)
	$	88,258		$	89,359		$	174,927		$	180,468
Daily weighted average number of subscribers	33,197			31,746			33,013			31,559
Customer service and billing expenses, per average subscriber	$	0.89		$	0.94		$	0.88		$	0.95

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Free cash flow- is derived from cash flow provided by operating activities, net of additions to property and equipment and restricted and other investment activity. Free cash flow is a metric that our management and board of directors use to evaluate the cash generated by our operations, net of capital expenditures and other investment activity. In a capital intensive business, with significant investments in satellites, we look at our operating cash flow, net of these investing cash outflows, to determine cash available for future subscriber acquisition and capital expenditures, to repurchase or retire debt, to acquire other companies and to evaluate our ability to return capital to stockholders. We exclude from free cash flow certain items that do not relate to the on-going performance of our business, such as cash outflows for acquisitions, strategic investments and net loan activity with related parties. We believe free cash flow is an indicator of the long-term financial stability of our business.  Free cash flow, which is reconciled to “Net cash provided by operating activities,” is a Non-GAAP financial measure.  This measure can be calculated by deducting amounts under the captions “Additions to property and equipment” and deducting or adding Restricted and other investment activity from “Net cash provided by operating activities” from the unaudited consolidated statements of cash flows. Free cash flow should be used in conjunction with other GAAP financial performance measures and may not be comparable to free cash flow measures presented by other companies.  Free cash flow should be viewed as a supplemental measure rather than an alternative measure of cash flows from operating activities, as determined in accordance with GAAP.  Free cash flow is limited and does not represent remaining cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt maturities. We believe free cash flow provides useful supplemental information to investors regarding our current cash flow, along with other GAAP measures (such as cash flows from operating and investing activities), to determine our financial condition, and to compare our operating performance to other communications, entertainment and media companies. Free cash flow is calculated as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Cash Flow information
Net cash provided by operating activities	$	579,418		$	483,211		$	994,116		$	792,536
Net cash used in investing activities	$	(99,313	)	$	(606,862	)	$	(184,307	)	$	(667,248	)
Net cash used in financing activities	$	(494,447	)	$	(63,667	)	$	(814,728	)	$	(296,057	)
Free Cash Flow
Net cash provided by operating activities	$	579,418		$	483,211		$	994,116		$	792,536
Additions to property and equipment	(92,868		)	(66,152		)	(174,273		)	(119,517		)
Purchases of restricted and other investments	(307		)	(334		)	(7,138		)	(7,355		)
Free cash flow	$	486,243		$	416,725		$	812,705		$	665,664

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. We measure conversion rate three months after the period in which the promotional period 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 connected vehicle services), divided by the number of satellite radio installations in new vehicles and shipments of aftermarket radios for the period.  The SAC, per installation, for the three and six months ended June 30, 2018 reflects adjustments as a result of adopting the new revenue standard as of January 1, 2018. SAC, per installation, is calculated as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Subscriber acquisition costs, excluding connected vehicle services	$	119,778		$	125,154		$	242,471		$	252,642
Less: margin from sales of radios and accessories, excluding connected vehicle services	(28,542		)	(20,285		)	(56,000		)	(43,031		)
	$	91,236		$	104,869		$	186,471		$	209,611
Installations	3,313			3,362			6,693			6,946
SAC, per installation	$	27.54		$	31.19		$	27.86		$	30.18

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The table below illustrates the impact that the adoption of the new revenue standard has had on SAC, per installation, for thethree and six months ended June 30, 2018.

	For the Three Months Ended June 30, 2018								For the Six Months Ended June 30, 2018
	As Reported			Impact of Adopting ASU 2014-09		Balances Without Adoption of ASU 2014-09			As Reported			Impact of Adopting ASU 2014-09		Balances Without Adoption of ASU 2014-09
Subscriber acquisition costs, excluding connected vehicle services	$	119,778		$	800	$	120,578		$	242,471		$	1,845	$	244,316
Less: margin from sales of radios and accessories, excluding connected vehicle services	(28,542		)	—		(28,542		)	(56,000		)	—		(56,000		)
	$	91,236		$	800	$	92,036		$	186,471		$	1,845	$	188,316
Installations	3,313			3,313		3,313			6,693			6,693		6,693
SAC, per installation	$	27.54		$	0.24	$	27.78		$	27.86		$	0.28	$	28.14

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

As of June 30, 2018, we did not hold or issue any free-standing derivatives.  We hold investments in money market funds and certificates of deposit.  These securities are consistent with the objectives contained within our investment policy.  The basic objectives of our investment policy are the preservation of capital, maintaining sufficient liquidity to meet operating requirements and maximizing yield. As of June 30, 2018, we also held the following material investments:

• Pandora Media, Inc. ("Pandora") Series A Preferred Stock, which investment we have elected to account for under the fair value option. As of June 30, 2018, the fair value of this investment was $597.9 million, which was based on a Black-Scholes option pricing model and an income approach - discounted cash flow analysis. Had the market price of Pandora's common stock been 10% lower as of June 30, 2018, the value of our investment would have been approximately $24.4 million lower.

• In connection with the recapitalization of Sirius XM Canada Holdings Inc. ("Sirius XM Canada"), on May 25, 2017, we loaned Sirius XM Canada $130.8 million. The loan is denominated in Canadian dollars and is subject to changes in foreign currency. It is considered a long-term investment with any unrealized gains or losses reported within Accumulated other comprehensive (loss) income. Such loan has a term of fifteen years, bears interest at a rate of 7.62% per annum and includes customary covenants and events of default, including an event of default relating to Sirius XM Canada’s failure to maintain specified leverage ratios. The carrying value of the loan as of June 30, 2018 was $130.2 million and approximates its fair value as of such date. Had the Canadian to U.S. dollar exchange rate been 10% lower as of June 30, 2018, the value of this loan would have been approximately $13.0 million lower.

Our debt includes fixed rate instruments and the fair market value of our debt is sensitive to changes in interest rates. Sirius XM's borrowings under the Credit Facility carry a variable interest rate based on LIBOR plus an applicable rate based on its debt to operating cash flow ratio.  We currently do not use interest rate derivative instruments to manage our exposure to interest rate fluctuations.

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

43

As of June 30, 2018, an evaluation was performed under the supervision and with the participation of our management, including James E. Meyer, our Chief Executive Officer, and David J. Frear, our Senior Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, our management, including our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2018.

There has been no significant change in our internal control over financial reporting (as that term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended June 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

44

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of business, we are a defendant or party to various claims and lawsuits, including those discussed below.

SoundExchange Royalty Claims. On June 7, 2018, Sirius XM entered into an agreement with SoundExchange, Inc., the organization that collects and distributes sound recording royalties pursuant to our statutory license, to settle the cases titled SoundExchange, Inc. v. Sirius XM Radio, Inc., No.13-cv-1290-RJL (D.D.C.), and SoundExchange, Inc. v. Sirius XM Radio, Inc., No.17-cv-02666-RJL (D.D.C.). A description of these actions is contained in our prior public filings. In connection with the settlement, we made a one-time lump sum payment of $150 million to SoundExchange on July 6, 2018. The settlement resolved all outstanding claims, including ongoing audits, under our statutory license for sound recordings for the period January 1, 2007 through December 31, 2017.

Telephone Consumer Protection Act Suits. On March 13, 2017, Thomas Buchanan, individually and on behalf of all others similarly situated, filed a class action complaint against us in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiff in this action alleges that we violated the Telephone Consumer Protection Act of 1991 (the “TCPA”) by, among other things, making telephone solicitations to persons on the National Do-Not-Call registry, a database established to allow consumers to exclude themselves from telemarketing calls unless they consent to receive the calls in a signed, written agreement, and making calls to consumers in violation of our internal Do-Not-Call registry. The plaintiff is seeking various forms of relief, including statutory damages of $500 for each violation of the TCPA or, in the alternative, treble damages of up to $1,500 for each knowing and willful violation of the TCPA and a permanent injunction prohibiting us from making, or having made, any calls to land lines that are listed on the National Do-Not-Call registry or our internal Do-Not-Call registry. We believe we have substantial defenses to the claims asserted in this action, and we intend to defend this action vigorously.

Other Matters.  In the ordinary course of business, we are a defendant in various other lawsuits and arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases; and owners of patents, trademarks, copyrights or other intellectual property.  None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in response to Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

As of June 30, 2018, our board of directors had authorized for repurchase an aggregate of $12.0 billion 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, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, including transactions with Liberty Media and its affiliates, or otherwise.  As of June 30, 2018, our cumulative repurchases since December 2012 under our stock repurchase program totaled 2.5 billion shares for $9.7 billion, and $2.3 billion remained available under our stock repurchase program. The size and timing of these purchases will be based on a number of factors, including price and business and market conditions.

45

The following table provides information about our purchases of equity securities registered pursuant to Section 12 of the Exchange Act, as amended, during the quarter ended June 30, 2018:

Period	Total Number of Shares Purchased	Average Price Paid Per Share (a)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)
April 1, 2018 - April 30, 2018	2,299,086	$	6.17	2,299,086	$	2,313,968,439
May 1, 2018 - May 31, 2018	1,279,424	$	6.37	1,279,424	$	2,305,818,884
June 1, 2018 - June 30, 2018	—	$	—	—	$	2,305,818,884
Total	3,578,510	$	6.24	3,578,510

(a) These amounts include fees and commissions associated with the shares repurchased.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

See Exhibit Index attached hereto, which is incorporated herein by reference.

46

EXHIBIT INDEX

Exhibit	Description
31.1	Certificate of James E. Meyer, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certificate of David J. Frear, Senior Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certificate of James E. Meyer, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	Certificate of David J. Frear, Senior Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
*10.1	Employment Agreement, dated as of May 31, 2018, between Sirius XM Radio Inc. and Dara F. Altman (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on June 5, 2018 (File No. 001-34295)).
*10.2	Employment Agreement, dated as of June 1, 2018, between Sirius XM Radio Inc. and David J. Frear (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on June 5, 2018 (File No. 001-34295)).
101.1	The following financial information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2018 and 2017; (ii) Consolidated Balance Sheets as of June 30, 2018 (Unaudited) and December 31, 2017; (iii) Consolidated Statements of Stockholders’ (Deficit) Equity for the six months ended June 30, 2018 (Unaudited); (iv) Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2018 and 2017; and (v) Notes to Consolidated Financial Statements (Unaudited).

 ____________________

* This document has been identified as a management contract or compensatory plan or arrangement.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

47

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 25th day of July 2018.

SIRIUS XM HOLDINGS INC.
By:	/s/     DAVID J. FREAR
	David J. Frear
	Senior Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer and Authorized Officer)

48

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, James E. Meyer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 of Sirius XM Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:	/s/ JAMES E. MEYER
	James E. Meyer Chief Executive Officer (Principal Executive Officer)

July 25, 2018

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, David J. Frear, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 of Sirius XM Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:	/s/ DAVID J. FREAR
	David J. Frear Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)

July 25, 2018

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Quarterly Report of Sirius XM Holdings Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James E. Meyer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ JAMES E. MEYER
	James E. Meyer Chief Executive Officer (Principal Executive Officer)

July 25, 2018

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY

ACT OF 2002

In connection with the Quarterly Report of Sirius XM Holdings Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David J. Frear, Senior Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ DAVID J. FREAR
	David J. Frear Senior Executive Vice President and Chief Financial Officer (Principal Financial Officer)

July 25, 2018

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 23, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	SIRIUS XM HOLDINGS INC.
Entity Central Index Key	0000908937
Trading Symbol	SIRI
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		4,488,104,672

XML

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue:
Total revenue	$ 1,432,299	$ 1,347,569	$ 2,807,401	$ 2,641,635
Cost of services:
Subscriber acquisition costs	119,778	125,154	242,471	252,642
Sales and marketing	119,435	106,707	226,146	203,616
Engineering, design and development	27,485	27,783	58,122	51,600
General and administrative	92,683	84,607	177,289	162,808
Depreciation and amortization	74,623	73,519	146,835	150,223
Total operating expenses	1,070,672	931,216	2,022,183	1,831,442
Income from operations	361,627	416,353	785,218	810,193
Other income (expense):
Interest expense	(86,917)	(82,794)	(176,706)	(164,451)
Other income (expense)	88,212	(11,937)	124,100	(3,074)
Total other income (expense)	1,295	(94,731)	(52,606)	(167,525)
Income before income taxes	362,922	321,622	732,612	642,668
Income tax expense	(70,570)	(119,513)	(150,819)	(233,486)
Net income	292,352	202,109	581,793	409,182
Foreign currency translation adjustment, net of tax	(8,242)	2,763	(17,826)	2,746
Total comprehensive income	$ 284,110	$ 204,872	$ 563,967	$ 411,928
Net income per common share:
Basic (in dollars per share)	$ 0.07	$ 0.04	$ 0.13	$ 0.09
Diluted (in dollars per share)	$ 0.06	$ 0.04	$ 0.13	$ 0.09
Weighted average common shares outstanding:
Basic (in shares)	4,481,930	4,652,426	4,486,620	4,681,223
Diluted (in shares)	4,589,095	4,735,592	4,588,986	4,759,741
Dividends declared per common share (in dollars per share)	$ 0.011	$ 0.010	$ 0.022	$ 0.02
Subscriber revenue
Revenue:
Total revenue	$ 1,138,962	$ 1,111,011	$ 2,256,046	$ 2,189,268
Advertising revenue
Revenue:
Total revenue	47,242	40,178	89,290	76,194
Equipment
Revenue:
Total revenue	36,840	29,674	71,929	59,332
Cost of services:
Cost of services	7,674	9,371	14,771	16,283
Music royalty fee and other revenue
Revenue:
Total revenue	209,255	166,706	390,136	316,841
Revenue share and royalties
Cost of services:
Cost of services	404,284	292,893	714,416	570,193
Programming and content
Cost of services:
Cost of services	105,650	96,255	206,486	191,799
Customer service and billing
Cost of services:
Cost of services	95,582	95,324	189,447	192,099
Satellite and transmission
Cost of services:
Cost of services	$ 23,478	$ 19,603	$ 46,200	$ 40,179

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 63,516	$ 69,022
Receivables, net	247,148	241,727
Inventory, net	18,967	20,199
Related party current assets	13,692	10,284
Prepaid expenses and other current assets	138,015	129,669
Total current assets	481,338	470,901
Property and equipment, net	1,468,930	1,462,766
Intangible assets, net	2,511,121	2,522,846
Goodwill	2,286,582	2,286,582
Related party long-term assets	1,051,337	962,080
Deferred tax assets	371,303	505,528
Other long-term assets	128,543	118,671
Total assets	8,299,154	8,329,374
Current liabilities:
Accounts payable and accrued expenses	871,373	794,341
Accrued interest	128,029	137,428
Current portion of deferred revenue	1,935,326	1,881,825
Current maturities of long-term debt	4,660	5,105
Related party current liabilities	4,103	2,839
Total current liabilities	2,943,491	2,821,538
Deferred revenue	160,286	174,579
Long-term debt	6,443,289	6,741,243
Related party long-term liabilities	6,269	7,364
Deferred tax liabilities	8,169	8,169
Other long-term liabilities	108,218	100,355
Total liabilities	9,669,722	9,853,248
Commitments and contingencies (Note 14)
Stockholders’ (deficit) equity:
Common stock, par value $0.001; 9,000,000 shares authorized; 4,485,774 and 4,530,928 shares issued; 4,485,774 and 4,527,742 outstanding at June 30, 2018 and December 31, 2017, respectively	4,485	4,530
Accumulated other comprehensive income, net of tax	4,594	18,407
Additional paid-in capital	1,267,630	1,713,816
Treasury stock, at cost; zero and 3,186 shares of common stock at June 30, 2018 and December 31, 2017, respectively	0	(17,154)
Accumulated deficit	(2,647,277)	(3,243,473)
Total stockholders’ (deficit) equity	(1,370,568)	(1,523,874)
Total liabilities and stockholders’ (deficit) equity	$ 8,299,154	$ 8,329,374

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	9,000,000,000	9,000,000,000
Common stock, shares issued (in shares)	4,485,774,000	4,530,928,000
Common stock, shares outstanding (in shares)	4,485,774,000	4,527,742,000
Treasury stock (in shares)	0	3,186,000

XML

Consolidated Statement of Stockholders' (Deficit) Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Accumulated Other Comprehensive Income (Loss)	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of change in accounting principles	$ 18,416		$ 4,013			$ 14,403
Beginning balance (in shares) at Dec. 31, 2017		4,530,928			3,186
Beginning balance at Dec. 31, 2017	(1,523,874)	$ 4,530	18,407	$ 1,713,816	$ (17,154)	(3,243,473)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income, net of tax	563,967		(17,826)			581,793
Share-based payment expense	58,208			58,208
Exercise of options and vesting of restricted stock units (in shares)		13,875
Exercise of options and vesting of restricted stock units	0	$ 14		(14)
Minimum withholding taxes on net share settlement of stock-based compensation	(71,540)			(71,540)
Cash dividends paid on common stock	(98,684)			(98,684)
Common stock repurchased (in shares)					55,843
Common stock repurchased	(317,061)				$ (317,061)
Common stock retired (in shares)		(59,029)			(59,029)
Common stock retired	0	$ (59)		(334,156)	$ 334,215
Ending balance (in shares) at Jun. 30, 2018		4,485,774			0
Ending balance at Jun. 30, 2018	$ (1,370,568)	$ 4,485	$ 4,594	$ 1,267,630	$ 0	$ (2,647,277)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income		$ 581,793	$ 409,182
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		146,835	150,223
Non-cash interest expense, net of amortization of premium		4,713	4,231
Provision for doubtful accounts		23,944	27,377
Amortization of deferred income related to equity method investment		(1,388)	(1,388)
Loss on unconsolidated entity investments, net		64	2,183
Gain on fair value instrument		(117,449)	0
Dividend received from unconsolidated entity investment		1,366	3,606
Share-based payment expense		70,448	59,697
Deferred income taxes		134,044	220,415
Changes in operating assets and liabilities:
Receivables		(29,364)	(38,063)
Inventory		1,232	2,492
Related party, net		(1,722)	(5,756)
Prepaid expenses and other current assets		(177)	(6,617)
Other long-term assets		8,356	5,937
Accounts payable and accrued expenses		87,857	(69,078)
Accrued interest		(9,399)	(7,042)
Deferred revenue		85,100	30,779
Other long-term liabilities		7,863	4,358
Net cash provided by operating activities		994,116	792,536
Cash flows from investing activities:
Additions to property and equipment		(174,273)	(119,517)
Purchases of other investments		(7,138)	(7,355)
Acquisition of business, net of cash acquired		0	(107,056)
Investments in related parties and other equity investees		(6,138)	(302,526)
Repayment from (loan to) related party		3,242
Repayment from (loan to) related party			(130,794)
Net cash used in investing activities		(184,307)	(667,248)
Cash flows from financing activities:
Taxes paid in lieu of shares issued for stock-based compensation		(71,501)	(22,595)
Revolving credit facility, net of deferred financing costs		(302,611)	610,000
Principal payments of long-term borrowings		(7,717)	(6,000)
Common stock repurchased and retired		(334,215)	(783,824)
Dividends paid		(98,684)	(93,638)
Net cash used in financing activities		(814,728)	(296,057)
Net decrease in cash, cash equivalents and restricted cash		(4,919)	(170,769)
Cash, cash equivalents and restricted cash at beginning of period		79,374	223,828
Cash, cash equivalents and restricted cash at end of period	[1]	74,455	53,059
Cash paid during the period for:
Interest, net of amounts capitalized		178,850	164,147
Income taxes paid		5,625	12,264
Non-cash investing and financing activities:
Capital lease obligations incurred to acquire assets		499	0
Change in treasury stock not yet settled		17,154	8,123
Other comprehensive loss (income), net of tax benefit		17,826	(2,746)
Issuance of common stock as part of recapitalization of Sirius XM Canada		$ 0	$ 178,850

[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. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016Cash and cash equivalents$63,516 $69,022 $42,738 $213,939Restricted cash included in Prepaid expenses and other current assets150 244 432 —Restricted cash included in Other long-term assets10,789 10,108 9,889 9,889Total cash, cash equivalents and restricted cash at end of period$74,455 $79,374 $53,059 $223,828

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018		Dec. 31, 2017	Jun. 30, 2017		Dec. 31, 2016
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 63,516		$ 69,022	$ 42,738		$ 213,939
Restricted cash included in Prepaid expenses and other current assets	150		244	432		0
Restricted cash included in Other long-term assets	10,789		10,108	9,889		9,889
Cash, cash equivalents and restricted cash at end of period	$ 74,455	[1]	$ 79,374	$ 53,059	[1]	$ 223,828

[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. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016Cash and cash equivalents$63,516 $69,022 $42,738 $213,939Restricted cash included in Prepaid expenses and other current assets150 244 432 —Restricted cash included in Other long-term assets10,789 10,108 9,889 9,889Total cash, cash equivalents and restricted cash at end of period$74,455 $79,374 $53,059 $223,828

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Business & Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business & Basis of Presentation

Business & Basis of Presentation

This Quarterly Report on Form 10-Q presents information for Sirius XM Holdings Inc. (“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, and “Sirius XM” refers to our wholly-owned subsidiary Sirius XM Radio Inc. Holdings has no operations independent of its wholly-owned subsidiary, Sirius XM.

Business

We transmit music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through our two proprietary satellite radio systems.  Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand, over our Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment.  We also provide connected vehicle services.  Our connected vehicle services are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers.

We have agreements with every major automaker (“OEMs”) to offer satellite radio in their vehicles, through which we acquire the majority of our subscribers. We also acquire subscribers through marketing to owners and lessees of previously owned vehicles that include factory-installed satellite radios that are not currently subscribing to our services. Our satellite radios are primarily distributed through automakers, retailers, and our website. Satellite radio services are also offered to customers of certain rental car companies.

Our primary source of revenue is subscription fees, with most of our customers subscribing to annual, semi-annual, quarterly or monthly plans.  We offer discounts for prepaid, longer-term subscription plans, as well as a multiple subscription discount.  We also derive revenue from activation and other fees, the sale of advertising on select non-music channels, the direct sale of satellite radios and accessories, and other ancillary services, such as our weather, traffic and data services.

In many cases, a subscription to our radio services is included with the purchase of new or previously owned vehicles. The length of these subscriptions varies but is typically three to twelve months.  We receive payments for these subscriptions from certain automakers.  We also reimburse various automakers for certain costs associated with satellite radios installed in new vehicles and pay revenue share to various automakers.

As of June 30, 2018, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, approximately 70% 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 and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation.

All significant intercompany transactions have been eliminated in consolidation. In the opinion of our management, all normal recurring adjustments necessary for a fair presentation of our unaudited consolidated financial statements as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 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, 2017, which was filed with the SEC on January 31, 2018.

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 one reportable segment as our chief operating decision maker, our Chief Executive Officer, assesses performance and allocates resources based on the consolidated results of operations of our business.

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 and six months ended June 30, 2018 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 16.

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.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 June 30, 2018 and December 31, 2017, 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 assets and liabilities measured at fair value were as follows:

	June 30, 2018						December 31, 2017
	Level 1	Level 2		Level 3	Total Fair Value		Level 1	Level 2		Level 3	Total Fair Value
Assets:
Pandora Media, Inc. (“Pandora”) - investment (a)	—	$	597,921	—	$	597,921	—	$	480,472	—	$	480,472
Liabilities:
Debt (b)	—	$	6,342,699	—	$	6,342,699	—	$	6,987,473	—	$	6,987,473

(a) During the year ended December 31, 2017, Sirius XM completed a $480,000investment in Pandora. We have elected the fair value option to account for this investment. Refer to Note 10 for information on this transaction.

(b) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm.  Refer to Note 11 for information related to the carrying value of our debt as of June 30, 2018 and December 31, 2017.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income of $4,594 was primarily comprised of the cumulative foreign currency translation adjustments related to our investment in and loan to Sirius XM Canada Holdings Inc. (“Sirius XM Canada”) (refer to Note 10 for additional information). During the three and six months ended June 30, 2018, we recorded a foreign currency translation adjustment loss of $8,242 and $17,826 net of tax of $2,663 and $5,735, respectively. In addition, we reclassified stranded tax effects of $4,013 related to the adoption of Accounting Standards Update ("ASU") 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, during the six months ended June 30, 2018.

Recent Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We are in the process of evaluating the impact of adoption of this ASU on our consolidated financial statements.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The FASB recently issued an exposure draft amending certain aspects of the new leasing standard. The proposed amendment allows adoption of the standard as of the effective date without restating prior periods. We plan to adopt this ASU on January 1, 2019. We expect the adoption of ASU 2016-02 will result in the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for operating leases.

Recently Adopted Accounting Policies

ASU 2014-09, Revenue - Revenue from Contracts with Customers. In May 2014, the FASB issued ASU 2014-09 which requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09, and all related amendments, which established ASC Topic 606 (the "new revenue standard"), effective as of January 1, 2018. We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

The new revenue standard primarily impacts how we account for revenue share payments and also has other immaterial impacts.

Revenue Share - Paid Trials

We previously recorded revenue share related to paid trials as Revenue share and royalties expense. Under the new revenue standard, we have recorded these revenue share payments as a reduction to revenue as the payments do not transfer a distinct good or service to us. Prior to the adoption, we recognized revenue share related to paid trial subscriptions as the Current portion of deferred revenue. Under the new revenue standard, we reclassified the revenue share related to paid trial subscriptions existing as of the date of adoption from Current portion of deferred revenue to Accounts payable and accrued expenses. For new paid trial subscriptions, the net amount of the paid trial subscription will be recorded as deferred revenue and the portion of revenue share will be recorded to Accounts payable and accrued expenses.

Other Impacts

Other impacts of the new revenue standard include:

• Activation fees were previously recognized over the expected subscriber life using the straight-line method. Under the new revenue standard, the activation fees have been recognized over a one month period from activation as the activation fees are non-refundable and they do not convey a material right. As of January 1, 2018, we reduced deferred revenue related to activation fees of $8,260, net of tax, to Accumulated deficit.

• Loyalty payments to OEMs were previously expensed when incurred as Subscriber acquisition costs. Under the new revenue standard, these costs have been capitalized in Prepaid expenses and other current assets as costs to obtain a contract and these costs will be amortized to Subscriber acquisition costs over an average self-pay subscriber life of that OEM. As of January 1, 2018, we capitalized previously expensed loyalty payments of $10,156, net of tax, to Prepaid expenses and other current assets by reducing Accumulated deficit.

These changes do not have a material impact to our financial statements.

ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02 to amend its standard on comprehensive income to provide an option for an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) that was passed in December 2017 from accumulated other comprehensive income (“AOCI”) directly to retained earnings. The stranded tax effects result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal years beginning after December 15, 2018, with early adoption permitted. We elected to adopt ASU 2018-02 effective January 1, 2018 and reclassified the stranded tax effects due to the Tax Act of $4,013 related to the currency translation adjustment from our investment balance and note receivable with Sirius XM Canada from AOCI to Accumulated deficit.

The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09 and ASU 2018-02 are included in the table below.

	Balance at December 31, 2017			Adjustments Due to ASU 2014-09			Adjustments Due to ASU 2018-02			Balance at January 1, 2018
Balance Sheet
Assets
Prepaid expenses and other current assets	$	129,669		$	8,262		$	—		$	137,931
Other long-term assets	118,671			2,576			—			121,247
Deferred tax assets	505,528			(5,915		)	—			499,613
Liabilities:
Accounts payable and accrued expenses	794,341			32,399			—			826,740
Current portion of deferred revenue	1,881,825			(41,902		)	—			1,839,923
Deferred revenue	174,579			(3,990		)	—			170,589
Equity:
Accumulated deficit	(3,243,473		)	18,416			(4,013		)	(3,229,070		)
AOCI, net of tax	18,407			—			4,013			22,420

The following table illustrates the impact of adopting ASU 2014-09 on our unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income.

	For the Three Months Ended June 30, 2018									For the Six Months Ended June 30, 2018
	As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09			As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09
Income Statement
Revenues
Subscriber revenue	$	1,138,962		$	23,787		$	1,162,749		$	2,256,046		$	48,179		$	2,304,225
Expenses
Revenue share and royalties	404,284			22,235			426,519			714,416			44,304			758,720
Subscriber acquisition costs	119,778			800			120,578			242,471			1,845			244,316
Income tax expense	(70,570		)	(146		)	(70,716		)	(150,819		)	(418		)	(151,237		)
Net Income	$	292,352		$	606		$	292,958		$	581,793		$	1,612		$	583,405

The adoption of the new revenue standard did not have a material impact on our unaudited consolidated balance sheet as of June 30, 2018.

ASU 2016-18,Statement of Cash Flows (Topic 230): Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU updates the guidance related to the statement of cash flows and requires that the statement include restricted cash with cash and cash equivalents when reconciling beginning and ending cash. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We adopted this ASU effective January 1, 2018. As a result of the adoption, we have added restricted cash to the reconciliation of beginning and ending cash and cash equivalents and included a reconciliation of total cash, cash equivalents and restricted cash to the balance sheet for each period presented in the unaudited consolidated statements of cash flows.

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Revenues

6 Months Ended

Jun. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Adoption of the new revenue standard

We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605.

Disaggregation of Revenue

We disaggregate our revenues as shown in the unaudited consolidated statements of comprehensive income.

Nature of goods and services

The following is a description of principal activities from which we generate our revenue, including from subscribers, advertising, and sales of equipment.

Subscription Revenue

Subscription revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio typically receive between a three and twelve month subscription to our service.  In certain cases, the subscription fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from certain automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale and activation. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the OEM when we receive a certain amount of payments from self-pay customers acquired from that OEM. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life of that OEM. Revenue share and loyalty fees paid to the OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service.

Advertising Revenue

We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue.  Additionally, we pay certain third parties a percentage of advertising revenue.  Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service.  Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted.

Equipment Revenue

Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon shipment. Revenue is recognized net of discounts and rebates.

Music Royalty Fee and Other Revenue

Music Royalty Fee and Other Revenue primarily consists of U.S. music royalty fees ("MRF"). The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense.  Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the subscription services which are continuously delivered to our customers.

Deferred Revenue

Customers generally pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our unaudited consolidated statement of comprehensive income as the services are provided. Changes in the liability balance during the period ended June 30, 2018 was not materially impacted by other factors.

Transaction Price Allocated to the Remaining Performance Obligations

As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. As of June 30, 2018, less than ten percent of our total deferred revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance. These amounts will be recognized on a straight-line basis as our services are provided.

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Earnings per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings per Share

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 and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method. We had no participating securities during the three and six months ended June 30, 2018 and 2017.

Common stock equivalents of 24,191 and 35,468 for the three months ended June 30, 2018 and 2017, respectively, and 45,032 and 35,447 for the six months ended June 30, 2018 and 2017, 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 June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Numerator:
Net income available to common stockholders for basic and diluted net income per common share	$	292,352	$	202,109	$	581,793	$	409,182
Denominator:
Weighted average common shares outstanding for basic net income per common share	4,481,930		4,652,426		4,486,620		4,681,223
Weighted average impact of dilutive equity instruments	107,165		83,166		102,366		78,518
Weighted average shares for diluted net income per common share	4,589,095		4,735,592		4,588,986		4,759,741
Net income per common share:
Basic	$	0.07	$	0.04	$	0.13	$	0.09
Diluted	$	0.06	$	0.04	$	0.13	$	0.09

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Receivables, net

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Receivables, net

Receivables, net

Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables.

Customer accounts receivable, net, includes receivables from our subscribers and other customers, including advertising, 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 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 OEMs 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 our receivables from distributors or other receivables as we have historically not experienced any significant collection issues with OEMs or other third parties.

Receivables, net, consists of the following:

	June 30, 2018			December 31, 2017
Gross customer accounts receivable	$	105,764		$	100,342
Allowance for doubtful accounts	(8,302		)	(9,500		)
Customer accounts receivable, net	$	97,462		$	90,842
Receivables from distributors	121,407			121,410
Other receivables	28,279			29,475
Total receivables, net	$	247,148		$	241,727

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Inventory, net

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventory, net

Inventory, net

Inventory consists of finished goods, refurbished goods, chipsets and other raw material components used in manufacturing radios and connected vehicle devices. 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:

	June 30, 2018			December 31, 2017
Raw materials	$	5,615		$	6,489
Finished goods	18,915			21,225
Allowance for obsolescence	(5,563		)	(7,515		)
Total inventory, net	$	18,967		$	20,199

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Goodwill

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

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 single reporting unit 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. The carrying amount recorded for our one reporting unit and goodwill was $(1,370,568) and $2,286,582, respectively, as of June 30, 2018.

As of June 30, 2018, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the three and six months ended June 30, 2018 and 2017.  As of June 30, 2018, the cumulative balance of goodwill impairments recorded since the July 2008 merger (the “Merger”) between our wholly owned subsidiary, Vernon Merger Corporation, and XM Satellite Radio Holdings Inc. (“XM”), was $4,766,190, which was recognized during the year ended December 31, 2008.

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Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Our intangible assets include the following:

		June 30, 2018							December 31, 2017
	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Indefinite life intangible assets:
FCC licenses	Indefinite	$	2,083,654	$	—		$	2,083,654	$	2,083,654	$	—		$	2,083,654
Trademarks	Indefinite	250,800		—			250,800		250,800		—			250,800
Definite life intangible assets:
Subscriber relationships	9 years	—		—			—		380,000		(380,000		)	—
OEM relationships	15 years	220,000		(68,444		)	151,556		220,000		(61,111		)	158,889
Licensing agreements	12 years	45,289		(36,193		)	9,096		45,289		(34,350		)	10,939
Software and technology	7 years	33,872		(17,857		)	16,015		43,915		(25,351		)	18,564
Total intangible assets		$	2,633,615	$	(122,494	)	$	2,511,121	$	3,023,658	$	(500,812	)	$	2,522,846

Indefinite Life Intangible Assets

We have identified our FCC licenses and the XM and Automatic Labs Inc. 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. The following table outlines the years in which each of our satellite licenses expires:

FCC satellite licenses	Expiration year
SIRIUS FM-5	2025
SIRIUS FM-6	2022
XM-3	2021
XM-4	2022
XM-5	2018

Prior to expiration, we are required to apply for a renewal of our FCC licenses.  The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred.  Each of the FCC licenses authorizes us to use the radio spectrum, which is a renewable, reusable resource that does not deplete or exhaust over time.

Our annual impairment assessment of our identifiable indefinite life 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. As of June 30, 2018, there were no indicators of impairment, and no impairment loss was recognized for intangible assets with indefinite lives during the three and six months ended June 30, 2018 and 2017.

Definite Life Intangible Assets

Amortization expense for all definite life intangible assets was $5,863 and $12,098 for the three months ended June 30, 2018 and 2017, respectively, and $11,725 and $23,626 for the six months ended June 30, 2018 and 2017, respectively. We retired definite lived intangible assets of $390,043 during the six months ended June 30, 2018 primarily related to fully amortized subscriber relationships. There were no retirements of definite lived intangible assets during the six months ended June 30, 2017. The expected amortization expense for the remaining period in 2018, each of the fiscal years 2019 through 2022 and for periods thereafter is as follows:

Years ending December 31,	Amount
2018 (remaining)	$	11,413
2019	22,701
2020	22,121
2021	16,678
2022	15,542
Thereafter	88,212
Total definite life intangible assets, net	$	176,667

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Property and Equipment

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment, net, consists of the following:

	June 30, 2018			December 31, 2017
Satellite system	$	1,586,794		$	1,586,794
Terrestrial repeater network	124,904			123,254
Leasehold improvements	59,477			57,635
Broadcast studio equipment	101,338			96,582
Capitalized software and hardware	719,433			639,516
Satellite telemetry, tracking and control facilities	74,201			69,147
Furniture, fixtures, equipment and other	98,849			96,965
Land	38,411			38,411
Building	61,844			61,824
Construction in progress	347,196			301,153
Total property and equipment	3,212,447			3,071,281
Accumulated depreciation and amortization	(1,743,517		)	(1,608,515		)
Property and equipment, net	$	1,468,930		$	1,462,766

Construction in progress consists of the following:

	June 30, 2018		December 31, 2017
Satellite system	$	231,047	$	183,243
Terrestrial repeater network	2,972		2,515
Capitalized software and hardware	95,555		94,456
Other	17,622		20,939
Construction in progress	$	347,196	$	301,153

Depreciation and amortization expense on property and equipment was $68,760 and $61,421 for the three months ended June 30, 2018 and 2017, respectively, and $135,110 and $126,597 for the six months ended June 30, 2018 and 2017, respectively.  We retired property and equipment of $14,760 during the six months ended June 30, 2017. There were no retirements of property and equipment during the six months ended June 30, 2018.

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 $2,901 and $1,005 for the three months ended June 30, 2018 and 2017, respectively, and $5,155 and $1,723 for the six months ended June 30, 2018 and 2017, respectively, which related to the construction of our SXM-7 and SXM-8 satellites.

Satellites

As of June 30, 2018, we owned a fleet of five satellites.  The chart below provides certain information on our satellites as of June 30, 2018:

Satellite Description	Year Delivered	Estimated End of Depreciable Life
SIRIUS FM-5	2009	2024
SIRIUS FM-6	2013	2028
XM-3	2005	2020
XM-4	2006	2021
XM-5	2010	2025

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Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

In the normal course of business, we enter into transactions with related parties such as Liberty Media, Sirius XM Canada and Pandora.

Liberty Media

As of June 30, 2018, Liberty Media beneficially owned, directly and indirectly, approximately 70% of the outstanding shares of our common stock. Liberty Media has two executives 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

On May 25, 2017, Sirius XM completed a recapitalization of Sirius XM Canada (the “Transaction”), which is now a privately held corporation.

Following the Transaction, Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada, with the remainder of the voting power and equity interests held by two of Sirius XM Canada’s previous shareholders. The total consideration from Sirius XM to Sirius XM Canada, excluding transaction costs, during the year ended December 31, 2017 was $308,526, which included $129,676 in cash and we issued 35,000 shares of our common stock with an aggregate value of $178,850 to the holders of the shares of Sirius XM Canada acquired in the Transaction. Sirius XM received common stock, non-voting common stock and preferred stock of Sirius XM Canada. We own 590,950 shares of preferred stock of Sirius XM Canada, which has a liquidation preference of one Canadian dollar per share.

In connection with the Transaction, Sirius XM also made a contribution in the form of a loan to Sirius XM Canada in the aggregate amount of $130,794. 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. The loan has a term of fifteen years, bears interest at a rate of 7.62% per annum and includes customary covenants and events of default, including an event of default relating to Sirius XM Canada’s failure to maintain specified leverage ratios. The terms of the loan require Sirius XM Canada to prepay a portion of the outstanding principal amount of the loan within sixty days of the end of each fiscal year in an amount equal to any cash on hand in excess of C$10,000 at the last day of the financial year if all target dividends have been paid in full. During the six months ended June 30, 2018, Sirius XM Canada repaid $3,242 of the principal amount of the loan.

In connection with the Transaction, Sirius XM also entered into 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 pays Sirius XM 25% of its gross revenues on a monthly basis through December 31, 2021 and 30% of its gross revenues on a monthly basis thereafter. Pursuant to the Advisory Services Agreement, Sirius XM Canada pays Sirius XM 5% of its gross revenues on a monthly basis. These agreements superseded and replaced the former agreements between Sirius XM Canada and its predecessors and Sirius XM.

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.

We had the following related party balances associated with Sirius XM Canada:

	June 30, 2018		December 31, 2017
Related party current assets	$	13,692	$	10,284
Related party long-term assets	$	453,416	$	481,608
Related party current liabilities	$	4,103	$	2,839
Related party long-term liabilities	$	6,269	$	7,364

As of June 30, 2018 and December 31, 2017, our related party current asset balance included amounts due under the Services Agreement and Advisory Services Agreement and certain amounts related to transactions outside the scope of the new services arrangements. Our related party long-term assets balance as of June 30, 2018 and December 31, 2017 included the carrying value of our investment balance in Sirius XM Canada of $323,226 and $341,214, respectively, and, as of June 30, 2018 and December 31, 2017, also included $130,190 and $140,073, respectively, for the long-term value of the outstanding loan to Sirius XM Canada. Our related party liabilities as of each of June 30, 2018 and December 31, 2017 included $2,776 for the current portion of deferred revenue and $3,700 and $5,088, respectively, for the long-term portion of deferred revenue recorded as of the Merger date related to agreements with legacy XM Canada, now Sirius XM Canada.  These costs are being amortized on a straight line basis through 2020.

Sirius XM Canada paid gross dividends to us of $408 during the three months ended June 30, 2018 and $1,439 and $3,796 during the six months ended June 30, 2018 and 2017, respectively. Sirius XM Canada did not pay any dividends to us during the three months ended June 30, 2017.  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 income for any remaining portion.

We recorded the following revenue and other income associated with Sirius XM Canada in our unaudited consolidated statements of comprehensive income:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018		2017
Revenue (a)(b)	$	23,273		$	28,129		$	47,370	$	40,345
Other income
Share of net earnings (b)	$	(896	)	$	(5,197	)	$	85	$	(2,183	)
Interest income (c)	$	2,557		$	803		$	5,204	$	803

(a) Prior to the Transaction, under our former agreements with Sirius XM Canada, we received a percentage-based fee of 10% and 15% for certain types of subscription revenue earned by Sirius XM Canada for the use of the Sirius and XM platforms, respectively, and additional fees for premium services and fees for activation fees and reimbursements for other charges.  We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income.

(b) Prior to the Transaction, we recognized our proportionate share of revenue and earnings or losses attributable to Sirius XM Canada on a one month lag. As a result of the Transaction, there is no longer a one-month lag and Sirius XM Canada changed its fiscal year-end to December 31 to align with us. For the three and six months ended June 30, 2018, Share of net earnings included $611 and $1,234, respectively, of amortization related to equity method intangible assets.

(c) This interest income relates to the loan to Sirius XM Canada and is recorded as Other income in our unaudited consolidated statements of comprehensive income.

Pandora

On September 22, 2017, Sirius XM completed a $480,000 investment in Pandora. Pursuant to an Investment Agreement with Pandora, Sirius XM purchased 480 shares of Pandora’s Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), for an aggregate purchase price of $480,000. As of June 30, 2018, the Series A Preferred Stock, including accrued but unpaid dividends, represents a stake of approximately 18% of Pandora's common stock outstanding and approximately a 15% interest on an as-converted basis. Pandora operates an internet-based music discovery platform, offering a personalized experience for listeners.

The Series A Preferred Stock is convertible at the option of the holders at any time into shares of common stock of Pandora (“Pandora Common Stock”) at an initial conversion price of $10.50 per share of Pandora Common Stock and an initial conversion rate of 95.2381 shares of Pandora Common Stock per share of Series A Preferred Stock, subject to certain customary anti-dilution adjustments. Holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 6.0% per annum, payable quarterly in arrears, if and when declared. Pandora has the option to pay dividends in cash when authorized by their Board and declared by Pandora or accumulate dividends in lieu of paying cash. Any conversion of Series A Preferred Stock may be settled by Pandora, at its option, in shares of Pandora Common Stock, cash or any combination thereof. However, unless and until Pandora’s stockholders have approved the issuance of greater than 19.99% of the outstanding Pandora Common Stock, the Series A Preferred Stock may not be converted into more than 19.99% of Pandora’s outstanding Pandora Common Stock as of June 9, 2017. The liquidation preference of the Series A Preferred Stock, including accrued dividends of $25,684, was $505,684 as of June 30, 2018.

The investment includes a mandatory redemption feature on any date from and after September 22, 2022 whereby Sirius XM, at its option, may require Pandora to purchase the Series A Preferred Stock at a price equal to 100% of the liquidation preference plus accrued but unpaid dividends for, at the election of Pandora, cash, shares of Pandora Common Stock or a combination thereof, and as such the investment qualifies as a debt security under ASC 320, Investments-Debt and Equity Securities. As the investment includes a conversion option, we have elected to account for this investment under the fair value option to reduce the accounting asymmetry that would otherwise arise when recognizing the changes in the fair value of available-for-sale investments. Under the fair value option, any gains (losses) associated with the change in fair value will be recognized in Other income within our unaudited consolidated statements of comprehensive income. An $86,074 and $117,449 unrealized gain associated with this investment was recognized during the three and six months ended June 30, 2018, respectively, as Other income in our unaudited consolidated statements of comprehensive income. The fair value of our investment, including accrued dividends, as of June 30, 2018 and December 31, 2017 was $597,921 and $480,472, respectively, and is recorded as a related party long-term asset within our unaudited consolidated balance sheets. This investment does not meet the requirements for the equity method of accounting as it does not qualify as in-substance common stock.

Sirius XM has appointed James E. Meyer, our Chief Executive Officer, David J. Frear, our Senior Executive Vice President and Chief Financial Officer, and Gregory B. Maffei, the Chairman of our Board of Directors, to Pandora's Board of Directors pursuant to our designation rights under the Investment Agreement. Mr. Maffei also serves as the Chairman of Pandora's Board of Directors.

Sirius XM's right to designate directors will fall away once Sirius XM and its affiliates fail to beneficially own shares of Series A Preferred Stock and/or Pandora Common Stock issued upon conversion thereof equal to (on an as-converted basis) at least 50% of the number of shares of Pandora Common Stock issuable upon conversion of the Series A Preferred Stock purchased under the Investment Agreement. Following the earlier to occur of (i) September 22, 2019 and (ii) the date on which Sirius XM and its affiliates fail to beneficially own shares of Series A Preferred Stock and/or Pandora Common Stock that were issued upon conversion thereof equal to (on an as-converted basis) at least 75% of the number of shares of Pandora Common Stock issuable upon conversion of the Series A Preferred Stock purchased under the Investment Agreement, Sirius XM has the right to designate only two directors.

We are subject to certain standstill restrictions, including, among other things, that we are restricted from acquiring additional securities of Pandora until December 9, 2018.

Except as to matters that may be voted upon separately by holders of the Series A Preferred Stock, Sirius XM is entitled to vote as a single class with the holders of Pandora Common Stock on an as-converted basis (up to a maximum of 19.99% of the Pandora Common Stock outstanding on June 9, 2017, unless stockholder approval has been received). Sirius XM is also entitled to a separate class vote with respect to certain amendments to Pandora’s organizational documents, issuances by Pandora of securities that are senior to, or equal in priority with, the Series A Preferred Stock and the incurrence of certain indebtedness by Pandora.

Upon certain change of control events involving Pandora, Pandora is required to repurchase all of the Series A Preferred Stock at a price equal to the greater of (1) an amount in cash equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends through June 9, 2022 (assuming such shares of Series A Preferred Stock remain outstanding through such date) and (2) the consideration the holders would have received if they had converted their shares of Series A Preferred Stock into Pandora Common Stock immediately prior to the change of control event (disregarding the 19.99% cap).

Beginning on September 22, 2020, if the volume weighted average price per share of Pandora Common Stock exceeds $18.375, as may be adjusted, for at least 20 trading days in any period of 30 consecutive trading days, Pandora may redeem all of the outstanding Series A Preferred Stock at a price equal to 100% of the liquidation preference thereof plus all accrued but unpaid dividends for, at the election of Pandora, cash, shares of Pandora Common Stock or a combination thereof, provided that, unless stockholder approval has been received, Pandora may not settle the redemption for shares of Pandora Common Stock to the extent the 19.99% cap would be exceeded.

Pursuant to a registration rights agreement entered into with Pandora, Sirius XM has certain customary registration rights with respect to the Series A Preferred Stock and Pandora Common Stock issued upon conversion thereof.

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

Our debt as of June 30, 2018 and December 31, 2017 consisted of the following:

							Carrying value(a) at
Issuer / Borrower	Issued	Debt	Maturity Date	Interest Payable	Principal Amount at June 30, 2018		June 30, 2018		December 31, 2017
Sirius XM (b)	July 2017	3.875% Senior Notes	August 1, 2022	semi-annually on February 1 and August 1	$	1,000,000	$	992,811	$	992,011
Sirius XM (b)	May 2013	4.625% Senior Notes	May 15, 2023	semi-annually on May 15 and November 15	500,000		496,923		496,646
Sirius XM (b)	May 2014	6.00% Senior Notes	July 15, 2024	semi-annually on January 15 and July 15	1,500,000		1,488,758		1,488,002
Sirius XM (b)	March 2015	5.375% Senior Notes	April 15, 2025	semi-annually on April 15 and October 15	1,000,000		991,777		991,285
Sirius XM (b)	May 2016	5.375% Senior Notes	July 15, 2026	semi-annually on January 15 and July 15	1,000,000		990,597		990,138
Sirius XM (b)	July 2017	5.00% Senior Notes	August 1, 2027	semi-annually on February 1 and August 1	1,500,000		1,486,728		1,486,162
Sirius XM (c)	December 2012	Senior Secured Revolving Credit Facility (the "Credit Facility")	June 29, 2023	variable fee paid quarterly	1,750,000		—		300,000
Sirius XM	Various	Capital leases	Various	n/a	n/a		8,324		10,597
Total Debt							6,455,918		6,754,841
Less: total current maturities							4,660		5,105
Less: total deferred financing costs for Notes							7,969		8,493
Total long-term debt							$	6,443,289	$	6,741,243

(a) The carrying value of the obligations is net of any remaining unamortized original issue discount.

(b) Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes.

(c) In June 2018, Sirius XM entered into an amendment to extend the maturity of the Credit Facility to June 2023. 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.  Interest on borrowings is payable on a monthly 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 payable on a quarterly basis.  The variable rate for the unused portion of the Credit Facility was 0.25% per annum as of June 30, 2018.  All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our unaudited consolidated balance sheets due to the long-term maturity of this debt.

Covenants and Restrictions

Under the Credit Facility, Sirius XM, our wholly-owned subsidiary, must comply with a debt maintenance covenant that it cannot exceed a total leverage ratio, calculated as consolidated total debt to consolidated operating cash flow, of 5.0 to 1.0.  The Credit Facility generally requires 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 indentures governing Sirius XM's notes restrict 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.  The indentures governing the notes also contain 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.

Under Sirius XM's 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 June 30, 2018 and December 31, 2017, we were in compliance with our debt covenants.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock, par value $0.001 per share

We are authorized to issue up to 9,000,000 shares of common stock. There were 4,485,774 and 4,530,928 shares of common stock issued and 4,485,774 and 4,527,742 shares outstanding on June 30, 2018 and December 31, 2017, respectively.

As of June 30, 2018, there were 281,863 shares of common stock reserved for issuance in connection with outstanding stock based awards to be granted to members of our board of directors, employees and third parties.

Quarterly Dividends

During the six months ended June 30, 2018, our board of directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date	Total Amount		Payment Date
January 23, 2018	$	0.011	February 7, 2018	$	49,397	February 28, 2018
April 26, 2018	$	0.011	May 10, 2018	$	49,287	May 31, 2018

Stock Repurchase Program

As of June 30, 2018, our board of directors had approved for repurchase an aggregate of $12,000,000 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, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, including transactions with Liberty Media and its affiliates, or otherwise.  As of June 30, 2018, our cumulative repurchases since December 2012 under our stock repurchase program totaled 2,529,978 shares for $9,694,181, and $2,305,819 remained available under our stock repurchase program.

The following table summarizes our total share repurchase activity for the six months ended:

	June 30, 2018			June 30, 2017
Share Repurchase Type	Shares	Amount		Shares	Amount
Open Market	55,843	$	317,061	155,711	$	775,701

Preferred Stock, par value $0.001 per share

We are authorized to issue up to 50,000 shares of undesignated preferred stock with a liquidation preference of $0.001 per share.  There were no shares of preferred stock issued or outstanding as of June 30, 2018 and 2017.

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Benefit Plans

6 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Benefit Plans

Benefit Plans

We recognized share-based payment expense of $36,215 and $30,251 for the three months ended June 30, 2018 and $70,448 and $59,697 for the six months ended June 30, 2018 and 2017, respectively.

2015 Long-Term Stock Incentive Plan

In May 2015, our stockholders approved the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (the “2015 Plan”).  Employees, consultants and members of our board of directors are eligible to receive awards under the 2015 Plan.  The 2015 Plan provides for the grant of stock options, restricted stock awards, restricted stock units and other stock-based awards that the compensation committee of our board of directors deems appropriate.  Stock-based awards granted under the 2015 Plan are generally subject to a graded vesting requirement, which is generally three to four years from the grant date.  Stock options generally expire ten years from the date of grant.  Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the third anniversary of the grant date. Each restricted stock unit entitles the holder to receive one share of common stock upon vesting.  As of June 30, 2018, 171,619 shares of common stock were available for future grants under the 2015 Plan.

Other Plans

We maintain three other share-based benefit plans — the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan, the XM 2007 Stock Incentive Plan and the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan. Excluding dividend equivalent units granted as a result of a declared dividend, no further awards may be made under these plans.

The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2018	2017	2018	2017
Risk-free interest rate	2.6%	1.6%	2.5%	1.6%
Expected life of options — years	3.48	4.35	3.54	4.07
Expected stock price volatility	22%	26%	22%	26%
Expected dividend yield	0.6%	0.8%	0.7%	0.8%

There were no options granted to third parties during the three and six months ended June 30, 2018 and 2017.

The following table summarizes stock option activity under our share-based plans for the six months ended June 30, 2018:

	Options		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2017	280,457		$	3.76
Granted	10,617		$	6.44
Exercised	(41,644	)	$	3.18
Forfeited, cancelled or expired	(1,926	)	$	4.48
Outstanding as of June 30, 2018	247,504		$	3.96	6.40	$	695,499
Exercisable as of June 30, 2018	115,544		$	3.40	5.30	$	389,015

The weighted average grant date fair value per share of stock options granted during the six months ended June 30, 2018 was $1.19.  The total intrinsic value of stock options exercised during the six months ended June 30, 2018 and 2017 was $139,812 and $47,572, respectively.  During the six months ended June 30, 2018 the number of net settled shares which were issued as a result of stock option exercises was 12,054.

We recognized share-based payment expense associated with stock options of $20,776 and $20,125 for the three months ended June 30, 2018 and 2017, respectively, and $40,435 and $39,637 for the six months ended June 30, 2018 and 2017, respectively.

The following table summarizes the restricted stock unit, including PRSU, activity under our share-based plans for the six months ended June 30, 2018:

	Shares		Grant Date Fair Value Per Share
Nonvested as of December 31, 2017	31,323		$	4.54
Granted	7,123		$	6.27
Vested	(3,518	)	$	3.92
Forfeited	(569	)	$	4.80
Nonvested as of June 30, 2018	34,359		$	4.93

The total intrinsic value of restricted stock units, including PRSUs, vesting during the six months ended June 30, 2018 and 2017 was $22,656 and $4,802, respectively. During the six months ended June 30, 2018, the number of net settled shares which were issued as a result of restricted stock units vesting totaled 1,821. During the six months ended June 30, 2018, we granted 3,768 PRSUs to certain employees. We believe it is probable that the performance target applicable to these PRSUs will be achieved.

In connection with the cash dividends paid during the six months ended June 30, 2018, we granted 126 restricted stock units, including PRSUs, in accordance with the terms of existing award agreements. These grants did not result in any additional incremental share-based payment expense being recognized during the six months ended June 30, 2018.

We recognized share-based payment expense associated with restricted stock units, including PRSUs, of $15,439 and $10,126 for the three months ended June 30, 2018 and 2017, respectively, and $30,013 and $20,060 for the six months ended June 30, 2018 and 2017, respectively.

Total unrecognized compensation costs related to unvested share-based payment awards for stock options and restricted stock units, including PRSUs, granted to employees, members of our board of directors and third parties at June 30, 2018 and December 31, 2017 was $251,588 and $241,521, respectively.  The total unrecognized compensation costs at June 30, 2018 are expected to be recognized over a weighted-average period of 1.72 years.

401(k) Savings Plan

Sirius XM sponsors the Sirius XM Radio Inc. 401(k) Savings Plan (the “Sirius XM Plan”) for eligible employees. The Sirius XM Plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain defined limits. We match 50% of an employee’s voluntary contributions per pay period on the first 6% of an employee’s pre-tax salary up to a maximum of 3% of eligible compensation.  We may also make additional discretionary matching, true-up matching and non-elective contributions to the Sirius XM Plan.  Employer matching contributions under the Sirius XM Plan vest at a rate of 33.33% for each year of employment and are fully vested after three years of employment for all current and future contributions.  Our cash employer matching contributions are not used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution.  We recognized $2,159 and $1,835 in expense during three months ended June 30, 2018 and 2017, respectively, and $4,028 and $3,517 in expense during the six months ended June 30, 2018 and 2017, respectively, in connection with the Sirius XM Plan.

Sirius XM Holdings Inc. Deferred Compensation Plan

In 2015, we adopted the Sirius XM Holdings Inc. Deferred Compensation Plan (the “DCP”).  The DCP allows members of our board of directors and certain eligible employees to defer all or a portion of their base salary, cash incentive compensation and/or board of directors’ cash compensation, as applicable.  Pursuant to the terms of the DCP, we may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so.  We have established a grantor (or “rabbi”) trust to facilitate the payment of our obligations under the DCP.

Contributions to the DCP, net of withdrawals, for the three months ended June 30, 2018 and 2017 were $307 and $334, respectively, and for the six months ended June 30, 2018 and 2017 were $7,138 and $7,355, respectively. As of June 30, 2018 and December 31, 2017, the fair value of the investments held in the trust were $22,375 and $14,641, respectively, which is included in Other long-term assets in our unaudited consolidated balance sheets and are classified as trading securities.  Trading gains and losses associated with these investments are recorded in Other income within our unaudited consolidated statements of comprehensive income.  The associated liability is recorded within Other long-term liabilities in our unaudited consolidated balance sheets, and any increase or decrease in the liability is recorded in General and administration expense within our unaudited consolidated statements of comprehensive income.  For the three and six months ended June 30, 2018 and 2017, we recorded an immaterial amount of unrealized gains on investments held in the trust.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The following table summarizes our expected contractual cash commitments as of June 30, 2018:

	2018		2019		2020		2021		2022		Thereafter		Total
Debt obligations	$	2,455	$	3,935	$	1,207	$	727	$	1,000,000	$	5,500,000	$	6,508,324
Cash interest payments	168,407		338,887		338,844		338,817		338,811		919,243		2,443,009
Satellite and transmission	59,557		94,922		51,056		4,347		2,428		4,288		216,598
Programming and content	136,122		251,953		207,728		118,706		52,475		162,938		929,922
Sales and marketing	9,990		12,817		7,701		7,446		1,644		203		39,801
Satellite incentive payments	8,001		10,652		10,197		8,574		8,558		61,767		107,749
Operating lease obligations	19,499		44,983		42,779		37,416		34,096		143,628		322,401
Royalties and other	230,132		139,285		103,414		86,253		23,199		33		582,316
Total (1)	$	634,163	$	897,434	$	762,926	$	602,286	$	1,461,211	$	6,792,100	$	11,150,120

(1) The table does not include our reserve for uncertain tax positions, which at June 30, 2018 totaled $15,344.

Debt obligations.    Debt obligations include principal payments on outstanding debt and capital lease obligations.

Cash interest payments.    Cash interest payments include interest due on outstanding debt and capital lease payments through maturity.

Satellite and transmission.    We have entered into agreements with several third parties to design, build, launch and insure two satellites, SXM-7 and SXM-8. We also have entered into agreements with third parties to operate and maintain satellite telemetry, tracking and control facilities and certain components of our terrestrial repeater networks.

Programming and content.    We have entered into various programming and content agreements. Under the terms of these agreements, our obligations include fixed payments, advertising commitments and revenue sharing arrangements. In certain of these agreements, the future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they are not included in our minimum contractual cash commitments.

Sales and marketing.    We have entered into various marketing, sponsorship and distribution agreements to promote our brand and are obligated to make payments to sponsors, retailers, automakers and radio manufacturers under these agreements. Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors.

Satellite incentive payments.    Boeing Satellite Systems International, Inc., the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments with respect to XM-3 and XM-4 meeting their fifteen-year design life, which we expect to occur.  Boeing may also be entitled to up to $10,000 of additional incentive payments if our XM-4 satellite continues to operate above baseline specifications during the five years beyond the satellite’s fifteen-year design life, which is currently not expected to occur.

Space Systems/Loral, the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments with respect to XM-5, SIRIUS FM-5 and SIRIUS FM-6 meeting their fifteen-year design life, which we expect to occur.

Operating lease obligations.    We have entered into both cancelable and non-cancelable operating leases for office space, equipment and terrestrial repeaters. These leases provide for minimum lease payments, additional operating expense charges, leasehold improvements and rent escalations that have initial terms ranging from one to fifteen years, and certain leases have options to renew. The effect of the rent holidays and rent concessions are recognized on a straight-line basis over the lease term, including reasonably assured renewal periods.

Royalties and other.    We have entered into certain music royalty arrangements that include fixed payments. We have also entered into various agreements with third parties for general operating purposes.

In addition to the minimum contractual cash commitments described above, we have entered into other variable cost arrangements. These future costs are dependent upon many factors and are difficult to anticipate; however, these costs may be substantial. We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions. We also have a surety bond of approximately $45,000 primarily used as security against non-performance in the normal course of business. We do not have any other significant off-balance sheet financing arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Legal Proceedings

In the ordinary course of business, we are a defendant or party to various claims and lawsuits, including those discussed below.

We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the reasonably possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any.

SoundExchange Royalty Claims. On June 7, 2018, Sirius XM entered into an agreement with SoundExchange, Inc., the organization that collects and distributes sound recording royalties pursuant to our statutory license, to settle the cases titled SoundExchange, Inc. v. Sirius XM Radio, Inc., No.13-cv-1290-RJL (D.D.C.), and SoundExchange, Inc. v. Sirius XM Radio, Inc., No.17-cv-02666-RJL (D.D.C.). A description of these actions is contained in our prior public filings. In connection with the settlement, we made a one-time lump sum payment of $150,000 to SoundExchange on July 6, 2018. The settlement resolved all outstanding claims, including ongoing audits, under our statutory license for sound recordings for the period January 1, 2007 through December 31, 2017.

Telephone Consumer Protection Act Suits. On March 13, 2017, Thomas Buchanan, individually and on behalf of all others similarly situated, filed a class action complaint against us in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiff in this action alleges that we violated the Telephone Consumer Protection Act of 1991 (the “TCPA”) by, among other things, making telephone solicitations to persons on the National Do-Not-Call registry, a database established to allow consumers to exclude themselves from telemarketing calls unless they consent to receive the calls in a signed, written agreement, and making calls to consumers in violation of our internal Do-Not-Call registry. The plaintiff is seeking various forms of relief, including statutory damages of five hundred dollars for each violation of the TCPA or, in the alternative, treble damages of up to fifteen hundred dollars for each knowing and willful violation of the TCPA and a permanent injunction prohibiting us from making, or having made, any calls to land lines that are listed on the National Do-Not-Call registry or our internal Do-Not-Call registry. We believe we have substantial defenses to the claims asserted in this action, and we intend to defend this action vigorously.

Other Matters.  In the ordinary course of business, we are a defendant in various other lawsuits and arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases; and owners of patents, trademarks, copyrights or other intellectual property.  None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations.

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We file a consolidated federal income tax return for all of our wholly-owned subsidiaries, including Sirius XM.  For the three months ended June 30, 2018 and 2017, income tax expense was $70,570 and $119,513, respectively, and $150,819 and $233,486 for the six months ended June 30, 2018 and 2017, respectively.

Our effective tax rate for the three months ended June 30, 2018 and 2017 was 19.4% and 37.2%, respectively. Our effective tax rate for the six months ended June 30, 2018 and 2017 was 20.6% and 36.3%, respectively. The effective tax rate for the three and six months ended June 30, 2018 was primarily impacted by the reduced federal income tax rate as a result of the Tax Act and the recognition of excess tax benefits related to share based compensation. The effective tax rate for the three and six months ended June 30, 2017 was impacted by the recognition of excess tax benefits related to share based compensation. We estimate our effective tax rate for the year ending December 31, 2018 will be approximately 22%.

As of June 30, 2018 and December 31, 2017, we had a valuation allowance related to deferred tax assets of $52,405 and $52,883, respectively, that were not likely to be realized due to certain net operating loss limitations and acquired net operating losses that were not more likely than not going to be utilized.

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On July 18, 2018, our board of directors declared a quarterly dividend on our common stock in the amount of $0.011 per share of common stock payable on August 31, 2018 to stockholders of record as of the close of business on August 10, 2018.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited consolidated financial statements of Holdings and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation.

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.

Recent Accounting Pronouncements and Recently Adopted Accounting Policies

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We are in the process of evaluating the impact of adoption of this ASU on our consolidated financial statements.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The FASB recently issued an exposure draft amending certain aspects of the new leasing standard. The proposed amendment allows adoption of the standard as of the effective date without restating prior periods. We plan to adopt this ASU on January 1, 2019. We expect the adoption of ASU 2016-02 will result in the recognition of right-of-use assets and lease liabilities on our consolidated balance sheets for operating leases.

Recently Adopted Accounting Policies

ASU 2014-09, Revenue - Revenue from Contracts with Customers. In May 2014, the FASB issued ASU 2014-09 which requires entities to recognize revenues when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted ASU 2014-09, and all related amendments, which established ASC Topic 606 (the "new revenue standard"), effective as of January 1, 2018. We adopted the new revenue standard using the modified retrospective method by recognizing the cumulative effect of initially applying the new revenue standard to all non-completed contracts as of January 1, 2018 as an adjustment to opening Accumulated deficit in the period of adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

The new revenue standard primarily impacts how we account for revenue share payments and also has other immaterial impacts.

Revenue Share - Paid Trials

We previously recorded revenue share related to paid trials as Revenue share and royalties expense. Under the new revenue standard, we have recorded these revenue share payments as a reduction to revenue as the payments do not transfer a distinct good or service to us. Prior to the adoption, we recognized revenue share related to paid trial subscriptions as the Current portion of deferred revenue. Under the new revenue standard, we reclassified the revenue share related to paid trial subscriptions existing as of the date of adoption from Current portion of deferred revenue to Accounts payable and accrued expenses. For new paid trial subscriptions, the net amount of the paid trial subscription will be recorded as deferred revenue and the portion of revenue share will be recorded to Accounts payable and accrued expenses.

Other Impacts

Other impacts of the new revenue standard include:

• Activation fees were previously recognized over the expected subscriber life using the straight-line method. Under the new revenue standard, the activation fees have been recognized over a one month period from activation as the activation fees are non-refundable and they do not convey a material right. As of January 1, 2018, we reduced deferred revenue related to activation fees of $8,260, net of tax, to Accumulated deficit.

• Loyalty payments to OEMs were previously expensed when incurred as Subscriber acquisition costs. Under the new revenue standard, these costs have been capitalized in Prepaid expenses and other current assets as costs to obtain a contract and these costs will be amortized to Subscriber acquisition costs over an average self-pay subscriber life of that OEM. As of January 1, 2018, we capitalized previously expensed loyalty payments of $10,156, net of tax, to Prepaid expenses and other current assets by reducing Accumulated deficit.

These changes do not have a material impact to our financial statements.

ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. In February 2018, the FASB issued ASU 2018-02 to amend its standard on comprehensive income to provide an option for an entity to reclassify the stranded tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) that was passed in December 2017 from accumulated other comprehensive income (“AOCI”) directly to retained earnings. The stranded tax effects result from the remeasurement of deferred tax assets and liabilities which were originally recorded in comprehensive income but whose remeasurement is reflected in the income statement. The guidance is effective for interim and fiscal years beginning after December 15, 2018, with early adoption permitted. We elected to adopt ASU 2018-02 effective January 1, 2018 and reclassified the stranded tax effects due to the Tax Act of $4,013 related to the currency translation adjustment from our investment balance and note receivable with Sirius XM Canada from AOCI to Accumulated deficit.

The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09 and ASU 2018-02 are included in the table below.

	Balance at December 31, 2017			Adjustments Due to ASU 2014-09			Adjustments Due to ASU 2018-02			Balance at January 1, 2018
Balance Sheet
Assets
Prepaid expenses and other current assets	$	129,669		$	8,262		$	—		$	137,931
Other long-term assets	118,671			2,576			—			121,247
Deferred tax assets	505,528			(5,915		)	—			499,613
Liabilities:
Accounts payable and accrued expenses	794,341			32,399			—			826,740
Current portion of deferred revenue	1,881,825			(41,902		)	—			1,839,923
Deferred revenue	174,579			(3,990		)	—			170,589
Equity:
Accumulated deficit	(3,243,473		)	18,416			(4,013		)	(3,229,070		)
AOCI, net of tax	18,407			—			4,013			22,420

The following table illustrates the impact of adopting ASU 2014-09 on our unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income.

	For the Three Months Ended June 30, 2018									For the Six Months Ended June 30, 2018
	As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09			As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09
Income Statement
Revenues
Subscriber revenue	$	1,138,962		$	23,787		$	1,162,749		$	2,256,046		$	48,179		$	2,304,225
Expenses
Revenue share and royalties	404,284			22,235			426,519			714,416			44,304			758,720
Subscriber acquisition costs	119,778			800			120,578			242,471			1,845			244,316
Income tax expense	(70,570		)	(146		)	(70,716		)	(150,819		)	(418		)	(151,237		)
Net Income	$	292,352		$	606		$	292,958		$	581,793		$	1,612		$	583,405

The adoption of the new revenue standard did not have a material impact on our unaudited consolidated balance sheet as of June 30, 2018.

ASU 2016-18,Statement of Cash Flows (Topic 230): Restricted Cash. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU updates the guidance related to the statement of cash flows and requires that the statement include restricted cash with cash and cash equivalents when reconciling beginning and ending cash. The guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. We adopted this ASU effective January 1, 2018. As a result of the adoption, we have added restricted cash to the reconciliation of beginning and ending cash and cash equivalents and included a reconciliation of total cash, cash equivalents and restricted cash to the balance sheet for each period presented in the unaudited consolidated statements of cash flows.

Revenues

Subscription Revenue

Subscription revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio typically receive between a three and twelve month subscription to our service.  In certain cases, the subscription fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from certain automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale and activation. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the OEM when we receive a certain amount of payments from self-pay customers acquired from that OEM. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life of that OEM. Revenue share and loyalty fees paid to the OEM offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service.

Advertising Revenue

We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue.  Additionally, we pay certain third parties a percentage of advertising revenue.  Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service.  Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted.

Equipment Revenue

Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized when the performance obligation is satisfied and control is transferred, which is generally upon shipment. Revenue is recognized net of discounts and rebates.

Music Royalty Fee and Other Revenue

Music Royalty Fee and Other Revenue primarily consists of U.S. music royalty fees ("MRF"). The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense.  Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to revenue ratably over the service period as the royalties relate to the subscription services which are continuously delivered to our customers.

Deferred Revenue

Customers generally pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our unaudited consolidated statement of comprehensive income as the services are provided. Changes in the liability balance during the period ended June 30, 2018 was not materially impacted by other factors.

Transaction Price Allocated to the Remaining Performance Obligations

As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less. As of June 30, 2018, less than ten percent of our total deferred revenue balance related to contracts that extended beyond one year. These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance. These amounts will be recognized on a straight-line basis as our services are provided.

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 and restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method.

Receivables, net

Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables.

Customer accounts receivable, net, includes receivables from our subscribers and other customers, including advertising, 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 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 OEMs 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 our receivables from distributors or other receivables as we have historically not experienced any significant collection issues with OEMs or other third parties.

Inventory, net

Inventory consists of finished goods, refurbished goods, chipsets and other raw material components used in manufacturing radios and connected vehicle devices. 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.

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 single reporting unit 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.

Indefinite Life Intangible Assets

Our annual impairment assessment of our identifiable indefinite life 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.

Legal Proceedings

We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the reasonably possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of assets and liabilities measured at fair value

Our assets and liabilities measured at fair value were as follows:

	June 30, 2018						December 31, 2017
	Level 1	Level 2		Level 3	Total Fair Value		Level 1	Level 2		Level 3	Total Fair Value
Assets:
Pandora Media, Inc. (“Pandora”) - investment (a)	—	$	597,921	—	$	597,921	—	$	480,472	—	$	480,472
Liabilities:
Debt (b)	—	$	6,342,699	—	$	6,342,699	—	$	6,987,473	—	$	6,987,473

(a) During the year ended December 31, 2017, Sirius XM completed a $480,000investment in Pandora. We have elected the fair value option to account for this investment. Refer to Note 10 for information on this transaction.

(b) The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm.  Refer to Note 11 for information related to the carrying value of our debt as of June 30, 2018 and December 31, 2017.

Schedule of new ASU adoption impact on financial statements

The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASU 2014-09 and ASU 2018-02 are included in the table below.

	Balance at December 31, 2017			Adjustments Due to ASU 2014-09			Adjustments Due to ASU 2018-02			Balance at January 1, 2018
Balance Sheet
Assets
Prepaid expenses and other current assets	$	129,669		$	8,262		$	—		$	137,931
Other long-term assets	118,671			2,576			—			121,247
Deferred tax assets	505,528			(5,915		)	—			499,613
Liabilities:
Accounts payable and accrued expenses	794,341			32,399			—			826,740
Current portion of deferred revenue	1,881,825			(41,902		)	—			1,839,923
Deferred revenue	174,579			(3,990		)	—			170,589
Equity:
Accumulated deficit	(3,243,473		)	18,416			(4,013		)	(3,229,070		)
AOCI, net of tax	18,407			—			4,013			22,420

The following table illustrates the impact of adopting ASU 2014-09 on our unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income.

	For the Three Months Ended June 30, 2018									For the Six Months Ended June 30, 2018
	As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09			As Reported			Impact of Adopting ASU 2014-09			Balances Without Adoption of ASU 2014-09
Income Statement
Revenues
Subscriber revenue	$	1,138,962		$	23,787		$	1,162,749		$	2,256,046		$	48,179		$	2,304,225
Expenses
Revenue share and royalties	404,284			22,235			426,519			714,416			44,304			758,720
Subscriber acquisition costs	119,778			800			120,578			242,471			1,845			244,316
Income tax expense	(70,570		)	(146		)	(70,716		)	(150,819		)	(418		)	(151,237		)
Net Income	$	292,352		$	606		$	292,958		$	581,793		$	1,612		$	583,405

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings per share

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
Numerator:
Net income available to common stockholders for basic and diluted net income per common share	$	292,352	$	202,109	$	581,793	$	409,182
Denominator:
Weighted average common shares outstanding for basic net income per common share	4,481,930		4,652,426		4,486,620		4,681,223
Weighted average impact of dilutive equity instruments	107,165		83,166		102,366		78,518
Weighted average shares for diluted net income per common share	4,589,095		4,735,592		4,588,986		4,759,741
Net income per common share:
Basic	$	0.07	$	0.04	$	0.13	$	0.09
Diluted	$	0.06	$	0.04	$	0.13	$	0.09

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Receivables, net (Tables)

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Accounts receivable, net

Receivables, net, consists of the following:

	June 30, 2018			December 31, 2017
Gross customer accounts receivable	$	105,764		$	100,342
Allowance for doubtful accounts	(8,302		)	(9,500		)
Customer accounts receivable, net	$	97,462		$	90,842
Receivables from distributors	121,407			121,410
Other receivables	28,279			29,475
Total receivables, net	$	247,148		$	241,727

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Inventory, net (Tables)

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Summary of inventory, net

Inventory, net, consists of the following:

	June 30, 2018			December 31, 2017
Raw materials	$	5,615		$	6,489
Finished goods	18,915			21,225
Allowance for obsolescence	(5,563		)	(7,515		)
Total inventory, net	$	18,967		$	20,199

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of indefinite-lived intangible assets

Our intangible assets include the following:

		June 30, 2018							December 31, 2017
	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Indefinite life intangible assets:
FCC licenses	Indefinite	$	2,083,654	$	—		$	2,083,654	$	2,083,654	$	—		$	2,083,654
Trademarks	Indefinite	250,800		—			250,800		250,800		—			250,800
Definite life intangible assets:
Subscriber relationships	9 years	—		—			—		380,000		(380,000		)	—
OEM relationships	15 years	220,000		(68,444		)	151,556		220,000		(61,111		)	158,889
Licensing agreements	12 years	45,289		(36,193		)	9,096		45,289		(34,350		)	10,939
Software and technology	7 years	33,872		(17,857		)	16,015		43,915		(25,351		)	18,564
Total intangible assets		$	2,633,615	$	(122,494	)	$	2,511,121	$	3,023,658	$	(500,812	)	$	2,522,846

Schedule of finite-lived intangible assets

Our intangible assets include the following:

		June 30, 2018							December 31, 2017
	Weighted Average Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Indefinite life intangible assets:
FCC licenses	Indefinite	$	2,083,654	$	—		$	2,083,654	$	2,083,654	$	—		$	2,083,654
Trademarks	Indefinite	250,800		—			250,800		250,800		—			250,800
Definite life intangible assets:
Subscriber relationships	9 years	—		—			—		380,000		(380,000		)	—
OEM relationships	15 years	220,000		(68,444		)	151,556		220,000		(61,111		)	158,889
Licensing agreements	12 years	45,289		(36,193		)	9,096		45,289		(34,350		)	10,939
Software and technology	7 years	33,872		(17,857		)	16,015		43,915		(25,351		)	18,564
Total intangible assets		$	2,633,615	$	(122,494	)	$	2,511,121	$	3,023,658	$	(500,812	)	$	2,522,846

Years in which satellite licenses expire

The following table outlines the years in which each of our satellite licenses expires:

FCC satellite licenses	Expiration year
SIRIUS FM-5	2025
SIRIUS FM-6	2022
XM-3	2021
XM-4	2022
XM-5	2018

Expected future amortization expense

The expected amortization expense for the remaining period in 2018, each of the fiscal years 2019 through 2022 and for periods thereafter is as follows:

Years ending December 31,	Amount
2018 (remaining)	$	11,413
2019	22,701
2020	22,121
2021	16,678
2022	15,542
Thereafter	88,212
Total definite life intangible assets, net	$	176,667

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Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Line Items]

Property and equipment, net

Property and equipment, net, consists of the following:

	June 30, 2018			December 31, 2017
Satellite system	$	1,586,794		$	1,586,794
Terrestrial repeater network	124,904			123,254
Leasehold improvements	59,477			57,635
Broadcast studio equipment	101,338			96,582
Capitalized software and hardware	719,433			639,516
Satellite telemetry, tracking and control facilities	74,201			69,147
Furniture, fixtures, equipment and other	98,849			96,965
Land	38,411			38,411
Building	61,844			61,824
Construction in progress	347,196			301,153
Total property and equipment	3,212,447			3,071,281
Accumulated depreciation and amortization	(1,743,517		)	(1,608,515		)
Property and equipment, net	$	1,468,930		$	1,462,766

Summary of orbiting satellites

The chart below provides certain information on our satellites as of June 30, 2018:

Satellite Description	Year Delivered	Estimated End of Depreciable Life
SIRIUS FM-5	2009	2024
SIRIUS FM-6	2013	2028
XM-3	2005	2020
XM-4	2006	2021
XM-5	2010	2025

Construction in progress

Property, Plant and Equipment [Line Items]

Property and equipment, net

Construction in progress consists of the following:

	June 30, 2018		December 31, 2017
Satellite system	$	231,047	$	183,243
Terrestrial repeater network	2,972		2,515
Capitalized software and hardware	95,555		94,456
Other	17,622		20,939
Construction in progress	$	347,196	$	301,153

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Related Party Transactions (Tables) - Equity Method Investee

6 Months Ended

Jun. 30, 2018

Related Party Transaction [Line Items]

Summary of related party balances

We had the following related party balances associated with Sirius XM Canada:

	June 30, 2018		December 31, 2017
Related party current assets	$	13,692	$	10,284
Related party long-term assets	$	453,416	$	481,608
Related party current liabilities	$	4,103	$	2,839
Related party long-term liabilities	$	6,269	$	7,364

Schedule of related party revenues and other income

We recorded the following revenue and other income associated with Sirius XM Canada in our unaudited consolidated statements of comprehensive income:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018		2017
Revenue (a)(b)	$	23,273		$	28,129		$	47,370	$	40,345
Other income
Share of net earnings (b)	$	(896	)	$	(5,197	)	$	85	$	(2,183	)
Interest income (c)	$	2,557		$	803		$	5,204	$	803

(a) Prior to the Transaction, under our former agreements with Sirius XM Canada, we received a percentage-based fee of 10% and 15% for certain types of subscription revenue earned by Sirius XM Canada for the use of the Sirius and XM platforms, respectively, and additional fees for premium services and fees for activation fees and reimbursements for other charges.  We record revenue from Sirius XM Canada as Other revenue in our unaudited consolidated statements of comprehensive income.

(b) Prior to the Transaction, we recognized our proportionate share of revenue and earnings or losses attributable to Sirius XM Canada on a one month lag. As a result of the Transaction, there is no longer a one-month lag and Sirius XM Canada changed its fiscal year-end to December 31 to align with us. For the three and six months ended June 30, 2018, Share of net earnings included $611 and $1,234, respectively, of amortization related to equity method intangible assets.

(c) This interest income relates to the loan to Sirius XM Canada and is recorded as Other income in our unaudited consolidated statements of comprehensive income.

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

Our debt as of June 30, 2018 and December 31, 2017 consisted of the following:

							Carrying value(a) at
Issuer / Borrower	Issued	Debt	Maturity Date	Interest Payable	Principal Amount at June 30, 2018		June 30, 2018		December 31, 2017
Sirius XM (b)	July 2017	3.875% Senior Notes	August 1, 2022	semi-annually on February 1 and August 1	$	1,000,000	$	992,811	$	992,011
Sirius XM (b)	May 2013	4.625% Senior Notes	May 15, 2023	semi-annually on May 15 and November 15	500,000		496,923		496,646
Sirius XM (b)	May 2014	6.00% Senior Notes	July 15, 2024	semi-annually on January 15 and July 15	1,500,000		1,488,758		1,488,002
Sirius XM (b)	March 2015	5.375% Senior Notes	April 15, 2025	semi-annually on April 15 and October 15	1,000,000		991,777		991,285
Sirius XM (b)	May 2016	5.375% Senior Notes	July 15, 2026	semi-annually on January 15 and July 15	1,000,000		990,597		990,138
Sirius XM (b)	July 2017	5.00% Senior Notes	August 1, 2027	semi-annually on February 1 and August 1	1,500,000		1,486,728		1,486,162
Sirius XM (c)	December 2012	Senior Secured Revolving Credit Facility (the "Credit Facility")	June 29, 2023	variable fee paid quarterly	1,750,000		—		300,000
Sirius XM	Various	Capital leases	Various	n/a	n/a		8,324		10,597
Total Debt							6,455,918		6,754,841
Less: total current maturities							4,660		5,105
Less: total deferred financing costs for Notes							7,969		8,493
Total long-term debt							$	6,443,289	$	6,741,243

(a) The carrying value of the obligations is net of any remaining unamortized original issue discount.

(b) Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes.

(c) In June 2018, Sirius XM entered into an amendment to extend the maturity of the Credit Facility to June 2023. 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.  Interest on borrowings is payable on a monthly 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 payable on a quarterly basis.  The variable rate for the unused portion of the Credit Facility was 0.25% per annum as of June 30, 2018.  All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our unaudited consolidated balance sheets due to the long-term maturity of this debt.

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of dividends declared

During the six months ended June 30, 2018, our board of directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date	Total Amount		Payment Date
January 23, 2018	$	0.011	February 7, 2018	$	49,397	February 28, 2018
April 26, 2018	$	0.011	May 10, 2018	$	49,287	May 31, 2018

Schedule of repurchase agreements

The following table summarizes our total share repurchase activity for the six months ended:

	June 30, 2018			June 30, 2017
Share Repurchase Type	Shares	Amount		Shares	Amount
Open Market	55,843	$	317,061	155,711	$	775,701

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Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Fair value of options granted

The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees and members of our board of directors:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2018	2017	2018	2017
Risk-free interest rate	2.6%	1.6%	2.5%	1.6%
Expected life of options — years	3.48	4.35	3.54	4.07
Expected stock price volatility	22%	26%	22%	26%
Expected dividend yield	0.6%	0.8%	0.7%	0.8%

Stock options activity under share-based payment plans

The following table summarizes stock option activity under our share-based plans for the six months ended June 30, 2018:

	Options		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2017	280,457		$	3.76
Granted	10,617		$	6.44
Exercised	(41,644	)	$	3.18
Forfeited, cancelled or expired	(1,926	)	$	4.48
Outstanding as of June 30, 2018	247,504		$	3.96	6.40	$	695,499
Exercisable as of June 30, 2018	115,544		$	3.40	5.30	$	389,015

Summary of restricted stock unit and stock award activity

The following table summarizes the restricted stock unit, including PRSU, activity under our share-based plans for the six months ended June 30, 2018:

	Shares		Grant Date Fair Value Per Share
Nonvested as of December 31, 2017	31,323		$	4.54
Granted	7,123		$	6.27
Vested	(3,518	)	$	3.92
Forfeited	(569	)	$	4.80
Nonvested as of June 30, 2018	34,359		$	4.93

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Expected contractual cash commitments

The following table summarizes our expected contractual cash commitments as of June 30, 2018:

	2018		2019		2020		2021		2022		Thereafter		Total
Debt obligations	$	2,455	$	3,935	$	1,207	$	727	$	1,000,000	$	5,500,000	$	6,508,324
Cash interest payments	168,407		338,887		338,844		338,817		338,811		919,243		2,443,009
Satellite and transmission	59,557		94,922		51,056		4,347		2,428		4,288		216,598
Programming and content	136,122		251,953		207,728		118,706		52,475		162,938		929,922
Sales and marketing	9,990		12,817		7,701		7,446		1,644		203		39,801
Satellite incentive payments	8,001		10,652		10,197		8,574		8,558		61,767		107,749
Operating lease obligations	19,499		44,983		42,779		37,416		34,096		143,628		322,401
Royalties and other	230,132		139,285		103,414		86,253		23,199		33		582,316
Total (1)	$	634,163	$	897,434	$	762,926	$	602,286	$	1,461,211	$	6,792,100	$	11,150,120

(1) The table does not include our reserve for uncertain tax positions, which at June 30, 2018 totaled $15,344.

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Business & Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2018 segment satellite_radio_system
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of satellite radio systems | satellite_radio_system	2
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Number of reportable segments | segment	1
Liberty Media | Common Stock | Management
Related Party Transactions [Abstract]
Related party ownership percentage	70.00%
Minimum
Related Party Transaction [Line Items]
Length of prepaid subscriptions, term	3 months
Maximum
Related Party Transaction [Line Items]
Length of prepaid subscriptions, term	12 months

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Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Liabilities:
Debt	$ 6,342,699		$ 6,987,473
Investment in convertible preferred stock	6,138	$ 302,526
Level 1
Liabilities:
Debt	0		0
Level 2
Liabilities:
Debt	6,342,699		6,987,473
Level 3
Liabilities:
Debt	0		0
Pandora
Assets:
Fair value of investment	597,921		480,472
Pandora | Investee
Liabilities:
Investment in convertible preferred stock			480,000
Pandora | Level 1
Assets:
Fair value of investment	0		0
Pandora | Level 2
Assets:
Fair value of investment	597,921		480,472
Pandora | Level 3
Assets:
Fair value of investment	$ 0		$ 0

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jan. 01, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders’ (deficit) equity	$ (1,370,568)		$ (1,370,568)			$ (1,523,874)
Foreign currency translation adjustment, net of tax	8,242	$ (2,763)	17,826	$ (2,746)
Foreign currency translation adjustment, tax	2,663		5,735
Accumulated other comprehensive income, net of tax	4,594		$ 4,594		$ 22,420	18,407
Activation fee revenue recognition period			1 month
Accumulated deficit	(2,647,277)		$ (2,647,277)		(3,229,070)	(3,243,473)
Adjustments Due to ASU 2018-02
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income, net of tax					4,013
Accumulated deficit					(4,013)
Adjustments Due to ASU 2014-09 | Impact of Adopting ASU 2014-09
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income, net of tax					0
Accumulated deficit					18,416
Adjustments Due to ASU 2014-09 | Impact of Adopting ASU 2014-09 | Activation Fees
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reduction in deferred revenue					8,260
Accumulated deficit					8,260
Adjustments Due to ASU 2014-09 | Impact of Adopting ASU 2014-09 | Loyalty Payments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated deficit					10,156
Prepaid expenses and other current assets					$ 10,156
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stockholders’ (deficit) equity	$ 4,594		$ 4,594			$ 18,407

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Summary of Significant Accounting Policies - Cumulative Effect of Adoption of ASUs on the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Assets
Prepaid expenses and other current assets	$ 138,015	$ 137,931	$ 129,669
Other long-term assets	128,543	121,247	118,671
Deferred tax assets	371,303	499,613	505,528
Liabilities:
Accounts payable and accrued expenses	871,373	826,740	794,341
Current portion of deferred revenue	1,935,326	1,839,923	1,881,825
Deferred revenue	160,286	170,589	174,579
Equity:
Accumulated deficit	(2,647,277)	(3,229,070)	(3,243,473)
Accumulated other comprehensive income, net of tax	$ 4,594	22,420	18,407
Adjustments Due to ASU 2018-02
Assets
Prepaid expenses and other current assets		0
Other long-term assets		0
Deferred tax assets		0
Liabilities:
Accounts payable and accrued expenses		0
Current portion of deferred revenue		0
Deferred revenue		0
Equity:
Accumulated deficit		(4,013)
Accumulated other comprehensive income, net of tax		4,013
Balances Without Adoption of ASU 2014-09
Assets
Prepaid expenses and other current assets			129,669
Other long-term assets			118,671
Deferred tax assets			505,528
Liabilities:
Accounts payable and accrued expenses			794,341
Current portion of deferred revenue			1,881,825
Deferred revenue			174,579
Equity:
Accumulated deficit			(3,243,473)
Accumulated other comprehensive income, net of tax			$ 18,407
Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09
Assets
Prepaid expenses and other current assets		8,262
Other long-term assets		2,576
Deferred tax assets		(5,915)
Liabilities:
Accounts payable and accrued expenses		32,399
Current portion of deferred revenue		(41,902)
Deferred revenue		(3,990)
Equity:
Accumulated deficit		18,416
Accumulated other comprehensive income, net of tax		$ 0

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Summary of Significant Accounting Policies - Impact of ASU 2014-09 in the Unaudited Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues
Total revenue	$ 1,432,299	$ 1,347,569	$ 2,807,401	$ 2,641,635
Expenses
Subscriber acquisition costs	119,778	125,154	242,471	252,642
Income tax expense	(70,570)	(119,513)	(150,819)	(233,486)
Net income	292,352	202,109	581,793	409,182
Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09
Expenses
Subscriber acquisition costs	800		1,845
Income tax expense	(146)		(418)
Net income	606		1,612
Balances Without Adoption of ASU 2014-09
Expenses
Subscriber acquisition costs	120,578		244,316
Income tax expense	(70,716)		(151,237)
Net income	292,958		583,405
Subscriber revenue
Revenues
Total revenue	1,138,962	1,111,011	2,256,046	2,189,268
Subscriber revenue | Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09
Revenues
Total revenue	23,787		48,179
Subscriber revenue | Balances Without Adoption of ASU 2014-09
Revenues
Total revenue	1,162,749		2,304,225
Revenue share and royalties
Expenses
Cost of services	404,284	$ 292,893	714,416	$ 570,193
Revenue share and royalties | Impact of Adopting ASU 2014-09 | Adjustments Due to ASU 2014-09
Expenses
Cost of services	22,235		44,304
Revenue share and royalties | Balances Without Adoption of ASU 2014-09
Expenses
Cost of services	$ 426,519		$ 758,720

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Revenues - Additional Information (Details)	6 Months Ended
	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Contract period (or less)	1 year
Activation fee revenue recognition period	1 month
Minimum
Disaggregation of Revenue [Line Items]
Data trial contract period	3 years
Maximum
Disaggregation of Revenue [Line Items]
Percent of deferred revenue related to long-term contracts	10.00%
Data trial contract period	5 years
Subscription prepayment period	3 years
Prepaid Vehicle Subscriptions [Member] | Minimum
Disaggregation of Revenue [Line Items]
Contract period (or less)	3 months
Prepaid Vehicle Subscriptions [Member] | Maximum
Disaggregation of Revenue [Line Items]
Contract period (or less)	12 months

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Earnings per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Participating securities (in shares)	0	0	0	0
Anti-dilutive common stock equivalents (in shares)	24,191,000	35,468,000	45,032,000	35,447,000

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Earnings per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator:
Net income available to common stockholders for basic and diluted net income per common share	$ 292,352	$ 202,109	$ 581,793	$ 409,182
Denominator:
Weighted average common shares outstanding for basic net income per common share (in shares)	4,481,930	4,652,426	4,486,620	4,681,223
Weighted average impact of dilutive equity instruments (in shares)	107,165	83,166	102,366	78,518
Weighted average shares for diluted net income per common share (in shares)	4,589,095	4,735,592	4,588,986	4,759,741
Net income per common share:
Basic (in dollars per share)	$ 0.07	$ 0.04	$ 0.13	$ 0.09
Diluted (in dollars per share)	$ 0.06	$ 0.04	$ 0.13	$ 0.09

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Receivables, net (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accounts receivable, net
Gross customer accounts receivable	$ 105,764	$ 100,342
Allowance for doubtful accounts	(8,302)	(9,500)
Customer accounts receivable, net	97,462	90,842
Receivables from distributors	121,407	121,410
Other receivables	28,279	29,475
Total receivables, net	$ 247,148	$ 241,727

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Inventory, net (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 5,615	$ 6,489
Finished goods	18,915	21,225
Allowance for obsolescence	(5,563)	(7,515)
Total inventory, net	$ 18,967	$ 20,199

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Goodwill (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) reporting_unit	Jun. 30, 2018 USD ($)	Jun. 30, 2018 USD ($) segment	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Number of reporting units			1		1
Stockholders’ (deficit) equity	$ (1,370,568,000)		$ (1,370,568,000)	$ (1,370,568,000)	$ (1,370,568,000)		$ (1,523,874,000)
Goodwill	2,286,582,000		2,286,582,000	2,286,582,000	2,286,582,000		$ 2,286,582,000
Impairment losses for goodwill	0	$ 0		0		$ 0
Accumulated impairment of goodwill since the merger	$ 4,766,190,000		$ 4,766,190,000	$ 4,766,190,000	$ 4,766,190,000

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Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Definite life intangible assets:
Accumulated Amortization	$ (122,494)	$ (500,812)
Net Carrying Value	176,667
Gross Carrying Value
Total intangible assets	2,633,615	3,023,658
Net Carrying Value
Total intangible assets	2,511,121	2,522,846
FCC licenses
Indefinite life intangible assets:
Gross Carrying Value	2,083,654	2,083,654
Net Carrying Value	2,083,654	2,083,654
Trademarks
Indefinite life intangible assets:
Gross Carrying Value	250,800	250,800
Net Carrying Value	$ 250,800	250,800
Subscriber relationships
Definite life intangible assets:
Weighted Average Useful Lives	9 years
Gross Carrying Value	$ 0	380,000
Accumulated Amortization	0	(380,000)
Net Carrying Value	$ 0	0
OEM relationships
Definite life intangible assets:
Weighted Average Useful Lives	15 years
Gross Carrying Value	$ 220,000	220,000
Accumulated Amortization	(68,444)	(61,111)
Net Carrying Value	$ 151,556	158,889
Licensing agreements
Definite life intangible assets:
Weighted Average Useful Lives	12 years
Gross Carrying Value	$ 45,289	45,289
Accumulated Amortization	(36,193)	(34,350)
Net Carrying Value	$ 9,096	10,939
Software and technology
Definite life intangible assets:
Weighted Average Useful Lives	7 years
Gross Carrying Value	$ 33,872	43,915
Accumulated Amortization	(17,857)	(25,351)
Net Carrying Value	$ 16,015	$ 18,564

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Intangible Assets - Indefinite Life Intangible Assets (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment of intangible assets, indefinite-lived (excluding goodwill)	$ 0	$ 0	$ 0

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Intangible Assets - Definite Life Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 5,863,000	$ 12,098,000	$ 11,725,000	$ 23,626,000
Retired
Definite life intangible assets:
Intangible assets	$ 390,043,000	$ 0	$ 390,043,000	$ 0

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Intangible Assets - Expected Amortization Expense for Each of the Fiscal Years (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Expected amortization expense for each of the fiscal years
2018 (remaining)	$ 11,413
2019	22,701
2020	22,121
2021	16,678
2022	15,542
Thereafter	88,212
Net Carrying Value	$ 176,667

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 3,212,447	$ 3,071,281
Accumulated depreciation and amortization	(1,743,517)	(1,608,515)
Property and equipment, net	1,468,930	1,462,766
Satellite system
Property, Plant and Equipment [Line Items]
Total property and equipment	1,586,794	1,586,794
Terrestrial repeater network
Property, Plant and Equipment [Line Items]
Total property and equipment	124,904	123,254
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	59,477	57,635
Broadcast studio equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	101,338	96,582
Capitalized software and hardware
Property, Plant and Equipment [Line Items]
Total property and equipment	719,433	639,516
Satellite telemetry, tracking and control facilities
Property, Plant and Equipment [Line Items]
Total property and equipment	74,201	69,147
Furniture, fixtures, equipment and other
Property, Plant and Equipment [Line Items]
Total property and equipment	98,849	96,965
Land
Property, Plant and Equipment [Line Items]
Total property and equipment	38,411	38,411
Building
Property, Plant and Equipment [Line Items]
Total property and equipment	61,844	61,824
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 347,196	$ 301,153

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Property and Equipment - Schedule of Construction in Progress (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Construction in progress	$ 347,196	$ 301,153
Satellite system
Property, Plant and Equipment [Line Items]
Construction in progress	231,047	183,243
Terrestrial repeater network
Property, Plant and Equipment [Line Items]
Construction in progress	2,972	2,515
Capitalized software and hardware
Property, Plant and Equipment [Line Items]
Construction in progress	95,555	94,456
Other
Property, Plant and Equipment [Line Items]
Construction in progress	$ 17,622	$ 20,939

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Property and Equipment - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($) satellite	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) satellite	Jun. 30, 2017 USD ($)
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense on property and equipment	$ 68,760,000	$ 61,421,000	$ 135,110,000	$ 126,597,000
Disposal of property and equipment			0	14,760,000
Capitalized interest costs	$ 2,901,000	$ 1,005,000	$ 5,155,000	$ 1,723,000
Number of owned satellites | satellite	5		5

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Related Party Transactions - Liberty Media, Sirius XM Canada - Additional Information (Details) $ / shares in Units, $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		5 Months Ended	6 Months Ended		12 Months Ended
	May 25, 2017 CAD ($)	Jun. 30, 2018 USD ($) director executive $ / shares shares	Jun. 30, 2017 USD ($)	May 24, 2017 shareholder	Jun. 30, 2018 USD ($) director executive $ / shares shares	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) shares	Jun. 30, 2018 $ / shares	Jan. 01, 2018 USD ($)	May 25, 2017 USD ($)
Related Party Transaction [Line Items]
Preferred stock liquidation preference per share (in Canadian dollars per share) | $ / shares		$ 0.001			$ 0.001
Current portion of deferred revenue		$ 1,935,326			$ 1,935,326		$ 1,881,825		$ 1,839,923
Deferred revenue, noncurrent		$ 160,286			$ 160,286		174,579		$ 170,589
Management | Liberty Media | Executives
Related Party Transaction [Line Items]
Number of related party members on the board of directors | executive		2			2
Management | Liberty Media | Director
Related Party Transaction [Line Items]
Number of related party members on the board of directors | director		1			1
Management | Liberty Media | Common Stock
Related Party Transaction [Line Items]
Related party ownership percentage		70.00%			70.00%
Equity Method Investee
Related Party Transaction [Line Items]
Notes receivable, related parties										$ 130,794
Notes receivable, maturity period	15 years
Interest rate	7.62%
Annual principal repayment period	60 days
Annual prepayment cash threshold	$ 10,000,000
Notes receivable, repayment from related party					$ 3,242
Current portion of deferred revenue		$ 2,776			2,776		2,776
Deferred revenue, noncurrent		$ 3,700			$ 3,700		$ 5,088
Equity Method Investee | Services Agreement
Related Party Transaction [Line Items]
Period of agreement	30 years
Equity Method Investee | Services Agreement, Years 1 Through 5
Related Party Transaction [Line Items]
Percent of gross revenue receivable	25.00%
Equity Method Investee | Services Agreement, Years 6 Through 30
Related Party Transaction [Line Items]
Percent of gross revenue receivable	30.00%
Equity Method Investee | Advisory Services Agreement
Related Party Transaction [Line Items]
Percent of gross revenue receivable	5.00%
Equity Method Investee | Common Stock
Related Party Transaction [Line Items]
Issuance of common stock as part of recapitalization of Sirius XM Canada (in shares) | shares							35,000
Equity Method Investee | Sirius XM Canada
Related Party Transaction [Line Items]
Equity method investment, equity interest	70.00%									70.00%
Equity method investment, voting interest	33.00%									33.00%
Number of shareholders | shareholder				2
Consideration transferred							$ 308,526
Payments to acquire equity method investments							129,676
Consideration transferred, equity interests issued and issuable							178,850
Number of preferred shares owned (in shares) | shares		590,950			590,950
Preferred stock liquidation preference per share (in Canadian dollars per share) | $ / shares								$ 1
Notes receivable, related parties		$ 130,190			$ 130,190		140,073
Equity method investments		323,226			323,226		$ 341,214
Equity method investment, dividends, including reduction of investment		$ 408	$ 0		$ 1,439	$ 3,796

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Related Party Transactions - Summary of Related Party Balances (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Related Party Transaction [Line Items]
Related party current assets	$ 13,692	$ 10,284
Related party long-term assets	1,051,337	962,080
Related party current liabilities	4,103	2,839
Related party long-term liabilities	6,269	7,364
Equity Method Investee | Sirius XM Canada
Related Party Transaction [Line Items]
Related party current assets	13,692	10,284
Related party long-term assets	453,416	481,608
Related party current liabilities	4,103	2,839
Related party long-term liabilities	$ 6,269	$ 7,364

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Related Party Transactions - Schedule of Related Party Revenue and Other Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Other income
Share of net earnings			$ (64)	$ (2,183)
Sirius XM Canada | Equity Method Investee
Related Party Transaction [Line Items]
Revenue	$ 23,273	$ 28,129	47,370	40,345
Other income
Share of net earnings	(896)	(5,197)	85	(2,183)
Interest income	$ 2,557	$ 803	$ 5,204	$ 803

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Related Party Transactions - Schedule of Related Party Revenue and Other Income, Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		5 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	May 24, 2017	Jun. 30, 2018	Jun. 30, 2017
Related Party Transaction [Line Items]
Amortization of intangible assets	$ 5,863	$ 12,098		$ 11,725	$ 23,626
Sirius XM Canada | Equity Method Investee
Related Party Transaction [Line Items]
Earning recognition lag period			1 month
Amortization of intangible assets	$ 611			$ 1,234
Sirius XM Canada | Equity Method Investee | Sirius Platform
Related Party Transaction [Line Items]
Percentage-based fee			10.00%
Sirius XM Canada | Equity Method Investee | X M Platform
Related Party Transaction [Line Items]
Percentage-based fee			15.00%

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Related Party Transactions - Pandora (Details) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
	Sep. 22, 2017 USD ($) $ / shares shares	Dec. 31, 2020 trading_day $ / shares	Jun. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) director $ / shares shares	Jun. 30, 2017 USD ($)	Jun. 09, 2022	Sep. 22, 2020	Dec. 31, 2017 USD ($)
Related Party Transaction [Line Items]
Investment in convertible preferred stock				$ 6,138	$ 302,526
Preferred stock, par value (in dollars per share) | $ / shares			$ 0.001	$ 0.001
Pandora
Related Party Transaction [Line Items]
Fair value of investment			$ 597,921	$ 597,921				$ 480,472
Pandora | Level 2
Related Party Transaction [Line Items]
Fair value of investment			$ 597,921	$ 597,921				$ 480,472
Pandora | Series A Preferred Stock
Related Party Transaction [Line Items]
Number of shares issued (in shares) | shares	480,000
Investee | Pandora
Related Party Transaction [Line Items]
Investment in convertible preferred stock	$ 480,000
Investment ownership percentage			18.00%	18.00%
Ownership percentage on an as-converted basis			15.00%	15.00%
Accrued dividends			$ 25,684	$ 25,684
Unrealized gain on investment			$ 86,074	$ 117,449
Minimum ownership percentage for director designation, converted basis			50.00%	50.00%
Minimum ownership percentage for designation of two directors, converted basis			75.00%	75.00%
Number of directors designated | director				2
Investee | Pandora | Series A Preferred Stock
Related Party Transaction [Line Items]
Preferred stock, par value (in dollars per share) | $ / shares	$ 0.0001
Price per share (in dollars per share) | $ / shares			$ 10.50	$ 10.50
Common shares issued upon conversion (in shares) | shares			95.2381	95.2381
Preferred stock dividend rate, percentage				6.00%
Liquidation preference			$ 505,684	$ 505,684
Percentage of liquidation preference	100.00%
Investee | Pandora | Series A Preferred Stock | Forecast
Related Party Transaction [Line Items]
Percentage of liquidation preference						100.00%	100.00%
Convertible preferred stock, stock trigger price (in dollars per share) | $ / shares		$ 18.375
Convertible preferred stock, threshold trading days | trading_day		20
Convertible preferred stock, threshold consecutive trading days | trading_day		30

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Debt - Schedule of Long-term Debt Instruments (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Debt
Capital leases	$ 8,324,000	$ 10,597,000
Total debt	6,455,918,000	6,754,841,000
Less: total current maturities	4,660,000	5,105,000
Less: total deferred financing costs for Notes	7,969,000	8,493,000
Total long-term debt	6,443,289,000	6,741,243,000
Senior Secured Revolving Credit Facility
Debt
Principal Amount	1,750,000,000
Carrying value	$ 0	300,000,000
Senior Notes | 3.875% Senior Notes Due 2022
Debt
Stated interest rate	3.875%
Principal Amount	$ 1,000,000,000
Carrying value	$ 992,811,000	992,011,000
Senior Notes | 4.625% Senior Notes Due 2023
Debt
Stated interest rate	4.625%
Principal Amount	$ 500,000,000
Carrying value	$ 496,923,000	496,646,000
Senior Notes | 6.00% Senior Note Due 2024
Debt
Stated interest rate	6.00%
Principal Amount	$ 1,500,000,000
Carrying value	$ 1,488,758,000	1,488,002,000
Senior Notes | 5.375% Senior Notes Due 2025
Debt
Stated interest rate	5.375%
Principal Amount	$ 1,000,000,000
Carrying value	$ 991,777,000	991,285,000
Senior Notes | 5.375% Senior Notes Due 2026
Debt
Stated interest rate	5.375%
Principal Amount	$ 1,000,000,000
Carrying value	$ 990,597,000	990,138,000
Senior Notes | 5.00% Senior Notes Due 2027
Debt
Stated interest rate	5.00%
Principal Amount	$ 1,500,000,000
Carrying value	$ 1,486,728,000	$ 1,486,162,000

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Debt - Schedule of Long-term Debt Instruments Additional Information (Details)	Jun. 30, 2018
Senior Secured Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, unused capacity, commitment fee percentage	0.25%

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Debt - Additional Information (Details)	6 Months Ended
	Jun. 30, 2018
Senior Secured Revolving Credit Facility
Debt Instrument [Line Items]
Maximum consolidated leverage ratio	5.0

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Stockholders' Equity - Common Stock (Details) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Equity [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	9,000,000,000	9,000,000,000
Common stock, shares issued (in shares)	4,485,774,000	4,530,928,000
Common stock, shares outstanding (in shares)	4,485,774,000	4,527,742,000
Common stock reserved for issuance (in shares)	281,863,000

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Stockholders' Equity - Quarterly Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		6 Months Ended
	Apr. 26, 2018	Jan. 23, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Equity [Abstract]
Dividends Per Share (in dollars per share)	$ 0.011	$ 0.011	$ 0.011	$ 0.010	$ 0.022	$ 0.02
Total Amount	$ 49,287	$ 49,397

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Stockholders' Equity - Stock Repurchase Program (Details) shares in Thousands	Jun. 30, 2018 USD ($) shares
Class of Stock [Line Items]
Number of shares repurchased (in shares) | shares	2,529,978
Aggregate cost for shares repurchased	$ 9,694,181,000
Remaining amount authorized under the stock repurchase program	2,305,819,000
Common Stock
Class of Stock [Line Items]
Stock repurchase program, aggregate authorized amount	$ 12,000,000,000

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Stockholders' Equity - Schedule of Repurchase Agreements (Details) - USD ($) shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Shares Repurchase Activity [Line Items]
Amount	$ 317,061
Treasury stock value	$ 0		$ 17,154
Open Market
Shares Repurchase Activity [Line Items]
Shares (in shares)	55,843	155,711
Amount	$ 317,061	$ 775,701

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Stockholders' Equity - Preferred Stock (Details) - $ / shares	Jun. 30, 2018	Jun. 30, 2017
Equity [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001
Undesignated preferred stock authorized (in shares)	50,000,000
Preferred stock liquidation preference per share (in dollars per share)	$ 0.001
Preferred stock issued (in shares)	0	0
Preferred stock outstanding (in shares)	0	0

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Benefit Plans - Additional Information (Details) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($) shares	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) plan $ / shares shares	Jun. 30, 2017 USD ($) shares	Dec. 31, 2017 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment expense	$ 36,215	$ 30,251	$ 70,448	$ 59,697
Number of other share-based benefit plans | plan			3
Options granted (in shares) | shares			0	0
Deferred compensation contributions	307	334	$ 7,138	$ 7,355
Fair value of investment assets related to deferred compensation plan	22,375		22,375		$ 14,641
Unrealized gain (loss) on investments			$ 0	0
Sirius XM Savings Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum of employee contributions of pre-tax eligible earnings to Company 401(k) Savings Plan			1.00%
Maximum of employee contributions of pre-tax eligible earnings to Company 401(k) Savings Plan			50.00%
Percent of Company match of employee's voluntary contributions			50.00%
Percent of employee's pre-tax salary			6.00%
Maximum annual contributions per employee, percent			3.00%
Vesting percentage of employer contributions for each year of employment			33.33%
Savings plan, fully vested period			3 years
Recognized cost	2,159	1,835	$ 4,028	3,517
Employees and Non Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment expense	20,776	20,125	$ 40,435	39,637
Weighted average grant date fair value of options granted (in dollars per share) | $ / shares			$ 1.19
Total intrinsic value of stock options exercised			$ 139,812	47,572
Number of net settled shares issued as a result of exercise of stock options and vesting of restricted stock units (in shares) | shares			12,054,000
Restricted Stock Units (RSUs) and Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment expense	15,439	$ 10,126	$ 30,013	20,060
Total intrinsic value of restricted stock units and stock awards vested			$ 22,656	$ 4,802
Shares granted (in shares) | shares			7,123,000
Incremental shares granted (in shares) | shares			126,000
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of net settled shares issued as a result of exercise of stock options and vesting of restricted stock units (in shares) | shares			1,821,000
Performance-based Share Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			3 years
Shares granted (in shares) | shares			3,768,000
Restricted Stock Units RSU and Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation costs related to unvested share based payment awards for restricted stock units, net of estimated forfeitures	$ 251,588		$ 251,588		$ 241,521
Weighted average expected period for recognition of compensation expenses			1 year 8 months 19 days
2015 Long Term Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock conversion to common stock			1
Common stock available for future grants (in shares) | shares	171,619,000		171,619,000
2015 Long Term Stock Incentive Plan | Employees and Non Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option expiration period			10 years
2015 Long Term Stock Incentive Plan | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			3 years
2015 Long Term Stock Incentive Plan | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			4 years

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Benefit Plans - Fair Value of Options Granted (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Retirement Benefits [Abstract]
Risk-free interest rate	2.60%	1.60%	2.50%	1.60%
Expected life of options — years	3 years 5 months 23 days	4 years 4 months 6 days	3 years 6 months 15 days	4 years 26 days
Expected stock price volatility	22.00%	26.00%	22.00%	26.00%
Expected dividend yield	0.60%	0.80%	0.70%	0.80%

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Benefit Plans - Stock Options Activity Under Share-Based Payment Plans (Details) - Employees and Non Employee Stock Option $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Options
Outstanding as of beginning of period (in shares) | shares	280,457
Granted (in shares) | shares	10,617
Exercised (in shares) | shares	(41,644)
Forfeited, cancelled or expired (in shares) | shares	(1,926)
Outstanding as of end of period (in shares) | shares	247,504
Exercisable (in shares) | shares	115,544
Weighted- Average Exercise Price Per Share
Outstanding as of beginning of period (in dollars per share) | $ / shares	$ 3.76
Granted (in dollars per share) | $ / shares	6.44
Exercised (in dollars per share) | $ / shares	3.18
Forfeited, cancelled or expired (in dollars per share) | $ / shares	4.48
Outstanding as of end of period (in dollars per share) | $ / shares	3.96
Exercisable (in dollars per share) | $ / shares	$ 3.40
Weighted- Average Remaining Contractual Term (Years)
Outstanding	6 years 4 months 24 days
Exercisable	5 years 3 months 18 days
Aggregate Intrinsic Value
Outstanding | $	$ 695,499
Exercisable | $	$ 389,015

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Benefit Plans - Summary of Restricted Stock Unit and Stock Award Activity (Details) - Restricted Stock Units (RSUs) and Performance Shares shares in Thousands	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Shares
Nonvested as of beginning of period (in shares) | shares	31,323
Granted (in shares) | shares	7,123
Vested (in shares) | shares	(3,518)
Forfeited (in shares) | shares	(569)
Nonvested as of end of period (in shares) | shares	34,359
Grant Date Fair Value Per Share
Nonvested as of beginning of period (in dollars per share) | $ / shares	$ 4.54
Granted (in dollars per share) | $ / shares	6.27
Vested (in dollars per share) | $ / shares	3.92
Forfeited (in dollars per share) | $ / shares	4.80
Nonvested as of end of period (in dollars per share) | $ / shares	$ 4.93

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Commitments and Contingencies - Expected Contractual Cash Commitments (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Expected contractual cash commitments
2018	$ 634,163
2019	897,434
2020	762,926
2021	602,286
2022	1,461,211
Thereafter	6,792,100
Total	11,150,120
Uncertain tax positions are recognized in other long-term liabilities	15,344
Debt obligations
Expected contractual cash commitments
2018	2,455
2019	3,935
2020	1,207
2021	727
2022	1,000,000
Thereafter	5,500,000
Total	6,508,324
Cash interest payments
Expected contractual cash commitments
2018	168,407
2019	338,887
2020	338,844
2021	338,817
2022	338,811
Thereafter	919,243
Total	2,443,009
Satellite and transmission
Expected contractual cash commitments
2018	59,557
2019	94,922
2020	51,056
2021	4,347
2022	2,428
Thereafter	4,288
Total	216,598
Programming and content
Expected contractual cash commitments
2018	136,122
2019	251,953
2020	207,728
2021	118,706
2022	52,475
Thereafter	162,938
Total	929,922
Sales and marketing
Expected contractual cash commitments
2018	9,990
2019	12,817
2020	7,701
2021	7,446
2022	1,644
Thereafter	203
Total	39,801
Satellite incentive payments
Expected contractual cash commitments
2018	8,001
2019	10,652
2020	10,197
2021	8,574
2022	8,558
Thereafter	61,767
Total	107,749
Operating lease obligations
Expected contractual cash commitments
2018	19,499
2019	44,983
2020	42,779
2021	37,416
2022	34,096
Thereafter	143,628
Total	322,401
Royalties and other
Expected contractual cash commitments
2018	230,132
2019	139,285
2020	103,414
2021	86,253
2022	23,199
Thereafter	33
Total	$ 582,316

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Commitments and Contingencies - Additional Information (Details)			6 Months Ended
	Jul. 06, 2018 USD ($)	Mar. 03, 2017 USD ($)	Jun. 30, 2018 USD ($) satellite
Loss Contingencies [Line Items]
Number of replacement satellites | satellite			2
Sound Exchange, Inc | Settled Litigation | Subsequent Event
Loss Contingencies [Line Items]
Payments for legal settlements	$ 150,000,000
Telephone Consumer Protection Act Suits | Pending Litigation
Loss Contingencies [Line Items]
Damages sought per violation		$ 500
Surety Bond
Loss Contingencies [Line Items]
Estimate of possible loss			$ 45,000,000
Maximum
Loss Contingencies [Line Items]
Operating lease obligations, term			15 years
Maximum | Telephone Consumer Protection Act Suits | Pending Litigation
Loss Contingencies [Line Items]
Damages sought per willful violation		$ 1,500
Minimum
Loss Contingencies [Line Items]
Operating lease obligations, term			1 year
XM-5, FM-5, FM-6, XM-3, and XM-4
Loss Contingencies [Line Items]
Operating performance over design life			15 years
XM-4
Loss Contingencies [Line Items]
Period beyond expected operating performance of design life for XM-4			5 years
XM-4 | Maximum
Loss Contingencies [Line Items]
Additional payments required if XM-4 continues to operate above baseline specifications			$ 10,000,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax expense	$ 70,570	$ 119,513	$ 150,819	$ 233,486
Income Taxes [Line Items]
Effective income tax rate percent	19.40%	37.20%	20.60%	36.30%
Valuation allowance	$ 52,405		$ 52,405			$ 52,883
Forecast
Income Taxes [Line Items]
Effective income tax rate percent					22.00%

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Subsequent Events (Details) - $ / shares				3 Months Ended		6 Months Ended
	Jul. 18, 2018	Apr. 26, 2018	Jan. 23, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Subsequent Event [Line Items]
Dividends declared per common share (in dollars per share)		$ 0.011	$ 0.011	$ 0.011	$ 0.010	$ 0.022	$ 0.02
Subsequent Event
Subsequent Event [Line Items]
Dividends declared per common share (in dollars per share)	$ 0.011