XM Radio 2014 Annual Report Download - page 120

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Level 1 Level 2 Level 3
Total Fair
Value Level 1 Level 2 Level 3
Total Fair
Value
December 31, 2014 December 31, 2013
Sirius XM
Canada—fair value
of embedded
derivative
of debenture(b) ...... $ — — — $ — $ — — 57 $ 57
Liabilities:
Debt(c) . . . . . . . . . . . . . $ — 4,613,044 — $4,613,044 $ — 4,066,755 — $4,066,755
Share Repurchase
Agreement(d). . . . . . . . $ — — — $ — $ — 15,702 — $ 15,702
(a) This amount approximates fair value. The carrying value of our investment in Sirius XM Canada
was $2,654 and $26,972 as of December 31, 2014 and 2013, respectively.
(b) As of December 31, 2013, we held an investment in CAD $4,000 face value of 8% convertible
unsecured subordinated debentures issued by Sirius XM Canada for which the embedded
conversion feature was bifurcated from the host contract. Sirius XM Canada redeemed and
converted the debentures during the year ended December 31, 2014.
(c) The fair value for non-publicly traded instruments is based upon estimates from a market maker
and brokerage firm. Refer to Note 14 for information related to the carrying value of our debt as
of December 31, 2014 and December 31, 2013.
(d) The final installment under the share repurchase agreement with Liberty Media was settled on
April 25, 2014. The fair value of the derivative associated with the share repurchase agreement
was determined using observable inputs, including the U.S. spot LIBOR curve and other
available market data and was recorded in our consolidated balance sheets in Related party
current liabilities, with changes in fair value recorded to our statements of comprehensive
income.
(5) Earnings per Share
Basic net income per common share is calculated by dividing the income available to common
stockholders by the weighted average common shares outstanding during each reporting period.
Diluted net income per common share adjusts the weighted average number of common shares
outstanding for the potential dilution that could occur if common stock equivalents (convertible debt,
preferred stock, warrants, stock options and restricted stock units) were exercised or converted into
common stock, calculated using the treasury stock method. In 2013 and 2012, we utilized the two-
class method in calculating basic net income per common share, as our Series B Preferred Stock
was considered to be participating securities through January 18, 2013. On January 18, 2013,
Liberty Media converted its remaining 6,250,100 outstanding shares of our Series B Preferred Stock
into 1,293,509,076 shares of common stock. We had no participating securities during the year
ended December 31, 2014.
Common stock equivalents of approximately 132,162,000, 365,177,000 and 147,125,000 for the
years ended December 31, 2014, 2013 and 2012, respectively, were excluded from the calculation
of diluted net income per common share as the effect would have been anti-dilutive.
F-14
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)