XM Radio 2013 Annual Report Download - page 76
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ARPU — is derived from total earned subscriber revenue, advertising revenue and other subscription-related
revenue, net of purchase price accounting adjustments, divided by the number of months in the period, divided
by the daily weighted average number of subscribers for the period. Other subscription-related revenue includes
the U.S. Music Royalty Fee. Purchase price accounting adjustments include the recognition of deferred
subscriber revenues not recognized in purchase price accounting associated with the Merger. ARPU is calculated
as follows (in thousands, except for subscriber and per subscriber amounts):
Unaudited
For the Years Ended December 31,
2013 2012 2011
Subscriber revenue (GAAP) ..................... $ 3,284,660 $ 2,962,665 $ 2,595,414
Add: advertising revenue (GAAP) ................ 89,288 82,320 73,672
Add: other subscription-related revenue (GAAP) ..... 290,895 237,868 231,902
Add: purchase price accounting adjustments ........ — 228 3,659
$ 3,664,843 $ 3,283,081 $ 2,904,647
Daily weighted average number of subscribers ...... 24,886,300 22,794,170 20,903,908
ARPU ...................................... $ 12.27 $ 12.00 $ 11.58
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 share-based payment expense and purchase price accounting adjustments associated
with the Merger, divided by the number of months in the period, divided by the daily weighted average number
of subscribers for the period. We believe the exclusion of share-based payment expense in our calculation of
customer service and billing expenses, per average subscriber, is useful given the significant variation in expense
that can result from changes in the fair market value of our common stock, the effect of which is unrelated to the
operational conditions that give rise to variations in the components of our customer service and billing expenses.
Customer service and billing expenses, per average subscriber, is calculated as follows (in thousands, except for
subscriber and per subscriber amounts):
Unaudited
For the Years Ended December 31,
2013 2012 2011
Customer service and billing expenses (GAAP) ...... $ 320,755 $ 294,980 $ 259,719
Less: share-based payment expense, net of purchase
price accounting adjustments .................. (2,219) (1,847) (1,502)
Add: purchase price accounting adjustments ........——18
$ 318,536 $ 293,133 $ 258,235
Daily weighted average number of subscribers ...... 24,886,300 22,794,170 20,903,908
Customer service and billing expenses, per average
subscriber ................................. $ 1.07 $ 1.07 $ 1.03
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