XM Radio 2015 Annual Report Download - page 85

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(a) Purchase price accounting adjustments included above exclude the incremental depreciation and
amortization associated with the $785,000 stepped up basis in property, equipment and
intangible assets as a result of the Merger. The increased depreciation and amortization for the
year ended December 31, 2014 was $39,000.
As Reported
Purchase Price
Accounting
Adjustments
Allocation of
Share-based
Payment Expense Adjusted
Unaudited For the Year Ended December 31, 2013
Revenue:
Subscriber revenue. . . . . . . . . . . . . . . . . . $3,284,660 $ — $ — $3,284,660
Advertising revenue . . . . . . . . . . . . . . . . . 89,288 — — 89,288
Equipment revenue. . . . . . . . . . . . . . . . . . 80,573 — — 80,573
Other revenue . . . . . . . . . . . . . . . . . . . . . . 344,574 7,251 — 351,825
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . $3,799,095 $ 7,251 $ — $3,806,346
Operating expenses
Cost of services:
Revenue share and royalties . . . . . . $ 677,642 $122,534 $ — $ 800,176
Programming and content . . . . . . . . . 290,323 8,033 (7,584) 290,772
Customer service and billing . . . . . . . 320,755 — (2,219) 318,536
Satellite and transmission . . . . . . . . . 79,292 — (3,714) 75,578
Cost of equipment . . . . . . . . . . . . . . . . 26,478 — — 26,478
Subscriber acquisition costs . . . . . . . . . 495,610 64,365 — 559,975
Sales and marketing . . . . . . . . . . . . . . . . 291,024 12,922 (14,792) 289,154
Engineering, design and development 57,969 — (7,405) 50,564
General and administrative . . . . . . . . . . 262,135 — (33,162) 228,973
Depreciation and amortization(a) . . . . . . 253,314 — — 253,314
Share-based payment expense . . . . . . — — 68,876 68,876
Total operating expenses . . . . . . . . . . . . . . $2,754,542 $207,854 $ — $2,962,396
(a) Purchase price accounting adjustments included above exclude the incremental depreciation and
amortization associated with the $785,000 stepped up basis in property, equipment and
intangible assets as a result of the Merger. The increased depreciation and amortization for the
year ended December 31, 2013 was $47,000.
ARPU—is derived from total earned subscriber revenue, advertising revenue and other subscription-
related revenue, excluding revenue associated with our connected vehicle business, divided by the
number of months in the period, divided by the daily weighted average number of subscribers for
the period. Other subscription-related revenue includes the U.S. Music Royalty Fee. ARPU is
calculated as follows:
2015 2014 2013
For the Years Ended December 31,
Unaudited
Subscriber revenue, excluding connected vehicle (GAAP) . . $3,726,340 $3,466,050 $3,272,718
Add: advertising revenue (GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . 122,292 100,982 89,288
Add: other subscription-related revenue (GAAP). . . . . . . . . . . . 410,644 336,408 290,895
$4,259,276 $3,903,440 $3,652,901
Daily weighted average number of subscribers . . . . . . . . . . . . . 28,337 26,284 24,886
ARPU. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12.53 $ 12.38 $ 12.23
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.
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