XM Radio 2015 Annual Report Download - page 66

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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 our 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 on
an annual, semi-annual, quarterly or monthly plan. 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 certain cases, a subscription to our radio services is included in the sale or lease price of
new vehicles 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.
Liberty Media beneficially owns, directly and indirectly, over 50% 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. Liberty Media owns interests in a range of media,
communications and entertainment businesses.
We also have an approximate 37% equity interest in Sirius XM Canada which offers satellite
radio services in Canada. Subscribers to the Sirius XM Canada service are not included in our
subscriber count.
Results of Operations
Set forth below are our results of operations for the year ended December 31, 2015 compared
with the year ended December 31, 2014 and the year ended December 31, 2014 compared with
the year ended December 31, 2013.
2015 2014 2013 Amount % Amount %
For the Years Ended December 31,
2015 vs 2014
Change
2014 vs 2013
Change
Revenue:
Subscriber revenue . . . . . . . . . . . $3,824,793 $3,554,302 $3,284,660 $270,491 8% $269,642 8%
Advertising revenue. . . . . . . . . . . 122,292 100,982 89,288 21,310 21% 11,694 13%
Equipment revenue . . . . . . . . . . . 110,923 104,661 80,573 6,262 6% 24,088 30%
Other revenue. . . . . . . . . . . . . . . . 512,050 421,150 344,574 90,900 22% 76,576 22%
Total revenue. . . . . . . . . . . . . . . . . . . . . 4,570,058 4,181,095 3,799,095 388,963 9% 382,000 10%
Operating expenses:
Cost of services:
Revenue share and
royalties . . . . . . . . . . . . . . . 1,034,832 810,028 677,642 224,804 28% 132,386 20%
Programming and content 293,091 297,313 290,323 (4,222) (1)% 6,990 2%
Customer service and
billing. . . . . . . . . . . . . . . . . . 377,908 370,585 320,755 7,323 2% 49,830 16%
Satellite and transmission. 94,609 86,013 79,292 8,596 10% 6,721 8%
Cost of equipment. . . . . . . . 42,724 44,397 26,478 (1,673) (4)% 17,919 68%
Subscriber acquisition costs . . . . . . . 532,599 493,464 495,610 39,135 8% (2,146) 0%
Sales and marketing . . . . . . . . . . . . . . 354,189 336,480 291,024 17,709 5% 45,456 16%
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