Sirius XM (SIRI) Kicks off New Phase as an Independent Public Company

Sirius XM Holdings Inc. (NASDAQ: SIRI) today kicked off a new chapter as an independent public company with a simplified capital structure and strategy for continued success following the closing of its transaction with Liberty Media.

"Today SiriusXM embarks on a new phase in our journey as an independent public company, building on our leading position in audio entertainment," said Jennifer Witz, Chief Executive Officer of SiriusXM. "We've created a strong and profitable business, anchored by a subscription service that fosters deep and loyal connections with our listeners and a growing digital audio advertising platform which extends our reach to fans around the world, and we are excited about the future as we look to expand and strengthen both platforms."

"As we look ahead, we remain committed to three key objectives: enhancing subscriber value with a focus on content, technology and pricing; growing our advertising offerings to both engage new listeners and deliver effective results for advertisers; and driving efficiency across the organization to continue our strong track record of financial performance. We look forward to building upon SiriusXM's twenty-year history as the audio platform of choice for millions of North Americans in their vehicles, at home, and on the go, with the goal of creating long-term value for our stockholders."

Financial Update
SiriusXM reiterated its full-year 2024 revenue and adjusted EBITDA guidance. As the company has stated in past earnings releases, the company planned to update its free cash flow guidance for transaction impacts. The company estimates these costs to be approximately $200 million and include transaction costs, incremental interest expense related to the debt assumed and incurred in connection with the Liberty Media transaction, and cash outflows at Liberty Sirius XM Holdings Inc. prior to the closing.

"As we enter our next phase as an independent company, we expect SiriusXM to continue delivering solid, profitable results," said Thomas Barry, Chief Financial Officer of SiriusXM. "After completing the transaction, which had the effect of reducing our outstanding common stock by approximately 12% before giving effect to the 1 for 10 adjustment, our capital allocation priorities are consistent: investing in our business, focusing in the near- to mid-term on reducing debt to return to our long-term target leverage, and continuing our capital return posture. In connection with our first day as an independent company, we have reiterated our revenue and adjusted EBITDA guidance and incorporated the impact of the transaction in our updated free cash flow guidance."

The company's 2024 financial guidance is as follows:

• Total revenue of approximately $8.75 billion,
• Adjusted EBITDA of approximately $2.7 billion, and
• Free cash flow of approximately $1.0 billion.

The company's $200 million change to its free cash flow guidance reflects approximately $70 million associated with closing costs and go-forward incremental interest and approximately $130 million associated with historical, year-to-date cash outflows at Liberty Sirius XM Holdings Inc. prior to the closing of the transaction.

Adjusted EBITDA and free cash flow are non-GAAP financial measures. The company has not provided a reconciliation of adjusted EBITDA to projected net income (loss) or free cash flow to net cash provided by operating activities because full-year net income (loss) and net cash provided by operating activities will include special items that have not occurred and are difficult to predict with reasonable certainty prior to year-end. Due to this uncertainty, the company cannot reconcile adjusted EBITDA and free cash flow to their comparable GAAP measures without unreasonable effort.

Capital Return Program
SiriusXM plans to continue its recurring dividend, which adjusted for the 1 for 10 change in the Liberty Media transaction exchange ratio would be approximately 27 cents per quarter.

Upon completion of the Liberty Media transaction, the Board of SiriusXM authorized a $1.166 billion common stock repurchase program. The $1.166 billion common stock repurchase program is a continuation of the stock repurchase program of the former SiriusXM.

This newly authorized amount represents the amount that remained available under former SiriusXM's $18 billion stock repurchase program that began in December 2012. Shares of common stock may be purchased from time to time on the open market and in privately negotiated transactions, including in accelerated stock repurchase transactions. SiriusXM expects to fund any repurchases through cash on hand, future cash flow from operations and borrowings under its revolving credit facility.

The timing and amount of any shares repurchased will be determined based on SiriusXM's evaluation of market conditions and other factors and the program may be discontinued or suspended at any time. Repurchases will be made in compliance with all SEC rules and other legal requirements and may be made in part under a Rule 10b5-1 plan, which permits stock repurchases when SiriusXM might otherwise be precluded from doing so.

Target Leverage Ratio
The company also reiterated its long-term target leverage ratio of mid-to-low three times adjusted EBITDA. After appropriate investments in the business and its continuing regular dividend, SiriusXM expects to focus excess cash flows on debt reduction until it reaches this long-term leverage target while continuing to be mindful of strategic investment and capital return opportunities.

SiriusXM Evaluating Non-Cash Goodwill and other Intangible Assets
SiriusXM also announced that, with the completion of the Liberty Media transaction, the company will perform an evaluation of its goodwill and other intangible assets, particularly the goodwill and other intangible assets attributed from the Liberty Media transaction. The company has regularly assessed any asset impairments or impairment indicators of its legacy assets, and, as a result, any such post-transaction charges would primarily relate to goodwill and intangible assets associated with the Liberty Media transaction. The company expects to complete its analysis of this goodwill and the other intangible assets in the third quarter of 2024.

Such impairment charge, if any, would represent a non-cash charge to earnings, and it would not affect the company's liquidity, cash flows from operating activities or debt covenants, or have any impact on future operations.

Transaction Closing Details
On September 9, 2024, at 4:05 p.m., New York City time, Liberty Media completed its previously announced split-off (the "Split-Off") of its former wholly owned subsidiary, Liberty Sirius XM Holdings Inc. ("New Sirius"). The Split-Off was accomplished by Liberty Media redeeming each outstanding share of Liberty Media's Series A, Series B and Series C Liberty SiriusXM common stock, par value $0.01 per share, in exchange for 0.8375 of a share of New Sirius common stock, par value $0.001 per share (the "Redemption"), with cash being paid to entitled record holders of Liberty SiriusXM common stock in lieu of any fractional shares of common stock of New Sirius.

Following the Split-Off, on September 9, 2024 at 6:00 p.m., New York City time, a wholly owned subsidiary of New Sirius merged with and into Sirius XM Holdings Inc. ("Old Sirius XM"), with Old Sirius XM surviving the merger as a wholly owned subsidiary of New Sirius (the "Merger" and together with the Split-Off, the "Transactions"). Upon consummation of the Merger, each share of common stock of Old Sirius XM, par value $0.001 per share, issued and outstanding immediately prior to the merger effective time (other than shares owned by New Sirius and its subsidiaries) was converted into one-tenth (0.1) of a share of New Sirius common stock, with cash being paid to entitled record holders of Old Sirius XM common stock in lieu of any fractional shares of common stock of New Sirius. Concurrently with the merger effective time, Old Sirius XM was renamed "Sirius XM Inc." and New Sirius was renamed "Sirius XM Holdings Inc."

As a result of the Transactions, Sirius XM Holdings Inc. is an independent, publicly traded company. Sirius XM Holdings Inc. common stock begins trading on Nasdaq under the ticker symbol "SIRI" on September 10, 2024.

Additional information regarding the Transactions is available in a Current Report on Form 8-K that the company filed yesterday with the U.S. Securities and Exchange Commission.

1 for 10 Adjustment
Upon consummation of the Liberty Media transaction, each share of common stock of Sirius XM issued and outstanding immediately prior to closing and held by the former minority stockholders of the company was converted into one-tenth (0.1) of a share of SiriusXM common stock. As a result, a holder of 100 shares of SiriusXM common stock, which closed on the Nasdaq Global Select Market at $2.67 prior to the transaction closing, received in exchange for such 100 shares 10 shares of SiriusXM common stock.

Share Reduction
Following the closing of the Liberty Media transaction, Sirius XM had approximately 339.1 million shares of common stock outstanding. The former holders of Liberty SiriusXM common stock own approximately 81% of Sirius XM and former Sirius XM minority stockholders own the remaining 19% of the new company.

The Liberty Media transaction resulted in the net reduction of approximately 12% of the company's outstanding shares before giving effect to the 1 for 10 adjustment. The former holders of Liberty SiriusXM common stock surrendered a portion of their shares in the calculation of the exchange ratio in the new company in exchange for the assumption of certain net liabilities by the new company in the transaction.

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