XM Radio 2013 Annual Report Download - page 119

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollar amounts in thousands, unless otherwise stated)
Sirius XM’s consolidated statements of comprehensive income. We recognized $466,815 in Loss on fair value of debt
and equity instruments during the year ended December 31, 2013. The additional fair value in excess of the carrying
amount of this instrument is eliminated in Holdings’ consolidated balance sheets and statements of comprehensive
income.
Covenants and Restrictions
The Exchangeable Notes require compliance with certain covenants that restrict Holdings’ and Sirius XM’s
ability to, among other things, (i) enter into certain transactions with affiliates and (ii) merge or consolidate with
another person.
Under the Credit Facility, Sirius XM must comply with a maintenance covenant that it not exceed a total
leverage ratio, calculated as total consolidated debt to consolidated operating cash flow, of 5.0 to 1.0. The Credit
Facility and the 5.25% Notes generally require 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 4.25% Notes, 4.625% Notes, 5.75% Notes and 5.875% Notes are subject to 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. In addition, each of these indentures restricts 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.
Under our 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 December 31, 2013 and 2012, we were in compliance with our debt covenants.
(14) Stockholders’ Equity
Common Stock, Holdings, par value $0.001 per share
As a result of our corporate reorganization in November 2013, all of the outstanding shares of Sirius XM’s
common stock were converted, on a share for share basis, into identical shares of common stock of Holdings.
The certificate of incorporation, the bylaws, the executive officers and the board of directors of Holdings are the
same as those of Sirius XM in effect immediately prior to the reorganization.
We were authorized to issue up to 9,000,000,000 shares of common stock as of December 31, 2013 and
2012. There were 6,096,220,526 and 5,262,440,085 shares of common stock issued and outstanding as of
December 31, 2013 and 2012, respectively.
As of December 31, 2013, approximately 562,534,000 shares of common stock were reserved for issuance
in connection with outstanding convertible debt, warrants, incentive stock awards and common stock to be
granted to third parties upon satisfaction of performance targets.
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