XM Radio 2014 Annual Report Download - page 102

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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, 2012 was $53,000.
ARPU—is derived from total earned subscriber revenue, advertising revenue and other subscription-
related revenue, excluding revenue associated with our connected vehicle business, 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. ARPU is calculated as follows (in thousands, except for subscriber and
per subscriber amounts):
2014 2013 2012
For the Years Ended December 31,
Unaudited
Subscriber revenue, excluding connected vehicle
(GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,466,050 $ 3,272,718 $ 2,962,665
Add: advertising revenue (GAAP) . . . . . . . . . . . . . . . . . . . . . . 100,982 89,288 82,320
Add: other subscription-related revenue (GAAP) . . . . . . . . 336,408 290,895 237,868
Add: purchase price accounting adjustments . . . . . . . . . . . — — 228
$ 3,903,440 $ 3,652,901 $ 3,283,081
Daily weighted average number of subscribers . . . . . . . . . 26,283,785 24,886,300 22,794,170
ARPU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12.38 $ 12.23 $ 12.00
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
(in thousands, except for subscriber and per subscriber amounts):
2014 2013 2012
For the Years Ended December 31,
Unaudited
Customer service and billing expenses, excluding
connected vehicle (GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 340,094 $ 317,832 $ 294,980
Less: share-based payment expense (GAAP) . . . . . . . . . . (2,780) (2,219) (1,847)
$ 337,314 $ 315,613 $ 293,133
Daily weighted average number of subscribers . . . . . . . . . 26,283,785 24,886,300 22,794,170
Customer service and billing expenses, per average
subscriber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.07 $ 1.06 $ 1.07
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