SiriusXM begins new era as independent public company

On September 10, 2024, SiriusXM officially began trading as an independent company on the Nasdaq Global Select Market under the ticker symbol SIRI. This milestone follows the completion of a complex transaction with Liberty Media Corporation that closed on September 9, 2024.

According to Jennifer Witz, Chief Executive Officer of SiriusXM, the company is poised to build on its strong position in audio entertainment. "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," Witz stated.

The transaction with Liberty Media involved multiple steps. First, Liberty Media completed a split-off of its wholly owned subsidiary, Liberty Sirius XM Holdings Inc. This was accomplished through a redemption of Liberty Media's Series A, Series B, and Series C Liberty SiriusXM common stock in exchange for shares of the new entity.

Following this split-off, a merger took place between a wholly owned subsidiary of the new entity and Sirius XM Holdings Inc. (now renamed Sirius XM Inc.). As a result of this merger, each share of common stock of the old Sirius XM was converted into one-tenth (0.1) of a share of the new company's common stock.

The transaction has resulted in a significant change in SiriusXM's ownership structure. Former holders of Liberty SiriusXM common stock now own approximately 81% of the new company, while former Sirius XM minority stockholders own the remaining 19%. The total number of outstanding shares following the transaction is approximately 339.1 million.

SiriusXM also provided an update on its financial outlook for 2024. The company reiterated its full-year revenue guidance of approximately $8.75 billion and adjusted EBITDA guidance of approximately $2.7 billion. However, it revised its free cash flow guidance to approximately $1.0 billion, a $200 million reduction from previous estimates. This change reflects transaction-related costs and historical cash outflows at Liberty Sirius XM Holdings Inc. prior to the closing.

Thomas Barry, Chief Financial Officer of SiriusXM, emphasized the company's focus on financial performance. "As we enter our next phase as an independent company, we expect SiriusXM to continue delivering solid, profitable results," Barry stated. He outlined the company's capital allocation priorities, which include investing in the business, reducing debt to return to long-term target leverage, and continuing capital returns to shareholders.

In line with these priorities, SiriusXM announced plans to continue its recurring dividend, which adjusted for the transaction would be approximately 27 cents per quarter. Additionally, the Board of Directors authorized a $1.166 billion common stock repurchase program, representing the remaining amount from the former SiriusXM's $18 billion stock repurchase program initiated in December 2012.

The company also reaffirmed its long-term target leverage ratio of mid-to-low three times adjusted EBITDA. SiriusXM plans to focus excess cash flows on debt reduction until it reaches this target, while remaining open to strategic investment opportunities.

As part of the transition, SiriusXM will perform an evaluation of its goodwill and other intangible assets, particularly those attributed from the Liberty Media transaction. The company expects to complete this analysis in the third quarter of 2024 and notes that any potential impairment charge would be non-cash and would not affect liquidity, cash flows from operating activities, or debt covenants.

Key facts

• Transaction closed on September 9, 2024
• SiriusXM began trading as an independent company on September 10, 2024
• New ticker symbol: SIRI (Nasdaq Global Select Market)
• Approximately 339.1 million shares outstanding post-transaction
• Former Liberty SiriusXM stockholders own 81% of new company
• Former Sirius XM minority stockholders own 19% of new company
• 2024 financial guidance: $8.75 billion revenue, $2.7 billion adjusted EBITDA, $1.0 billion free cash flow
• $1.166 billion stock repurchase program authorized
• Quarterly dividend of approximately 27 cents planned