Annual Report of Employee Stock Purchase


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 11-K
 
þ
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURTIES EXCHANGE ACT OF 1934

 
For the fiscal year ended: December 31, 2013

o
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUM BER 001-34295
 

A.
 
Full title of the plan and the address of the plan, if different from that of the issuer named below:
Sirius XM Radio 401(k) Savings Plan
B.
 
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Sirius XM Holdings Inc.
1221 Avenue of the Americas, 36 th Floor
New York, New York 10020


Table of Contents

TABLE OF CONTENTS
 
 
 
 
 
 
 
 
Part I -
 
Financial Statements
 
 
 
  1
 
 
  2
 
 
  3
 
 
  4
 
 
 
 
Part II -
 
Supplemental Schedules*
 
 
 

 
 
 
 
 
 
 
 
EX 23.1
 
 
 
 
 
 
 
*
 
All other schedules are omitted since they are not applicable or are not required based on the disclosure requirements of the Employee Retirement Income Security Act of 1974 and applicable regulations issued by the Department of Labor.



 




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Employee Benefits Committee of the
Sirius XM Radio 401(k) Savings Plan:

We have audited the accompanying statements of net assets available for benefits of the Sirius XM Radio 401(k) Savings Plan (the Plan) as of December 31, 2013 and 2012 , and the related statement of changes in net assets available for benefits for the year ended December 31, 2013 . These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2013 and 2012 , and the changes in net assets available for benefits for the year ended December 31, 2013 , in conformity with U.S. generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule H, line 4i - schedule of assets (held at end of year) as of December 31, 2013 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.


/s/ KPMG LLP
New York, New York
June 16, 2014


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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(in thousands)



As of December 31,


2013
 
2012
Investments, at fair value:




Pooled separate accounts

$
106,942


$
75,948

Guaranteed Income Fund

16,200


15,249

Mutual funds

25,197


17,940

Common stock

67,037


56,514

Total investments

215,376


165,651

Loans receivable from participants

2,282


1,959

Contributions receivable:




Employer



71

Participants



360

Total contributions receivable



431

Net assets available for benefits

$
217,658


$
168,041


See accompanying notes to Financial Statements.

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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(in thousands)



For the Year Ended December 31, 2013
Additions to net assets attributed to:


Investment Income:


Net appreciation in fair value of investments

$
36,728

Interest on guaranteed income fund

348

Dividends

804

Net investment income

37,880

Interest on loans receivable from participants

93

Contributions:

 
Participants

13,675

Employer

4,174

Rollovers

4,685

Total contributions

22,534

Total additions

60,507

Deductions from net assets attributed to:

 
Benefits paid to participants

(10,862
)
Administrative expenses

(28
)
Total deductions

(10,890
)
Net increase

49,617

Net assets available for benefits:

 
Beginning of year

168,041

End of year

$
217,658


See accompanying notes to Financial Statements.



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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements

1. Background and Plan Description
    
Sirius XM Radio Inc. (the “Company” or the “Plan Sponsor”) sponsors the Sirius XM Radio 401(k) Savings Plan (the “Plan”) to provide eligible employees with a method of saving for their retirement and other needs. The Company is a wholly-owned subsidiary of Sirius XM Holdings Inc. ("Holdings"). The Plan is a defined contribution plan subject to applicable provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan's inception date was September 1, 1998.

Effective November 15, 2013, a corporate reorganization was completed, whereby Holdings replaced the Company as the publicly held corporation and the Company became a wholly-owned subsidiary of Holdings. Holdings has no operations independent of the Company. In connection with this reorganization, all of the outstanding shares of the Company's common stock, including those held in the Plan, were converted, on a share for share basis, into identical shares of common stock of Holdings, effective November 15, 2013.
    
The following description of the Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions and information regarding eligibility, contributions, distributions, vesting, withdrawals, loans and definitions of all terms.

Eligibility
Participation in the Plan begins on the first day of the calendar month coinciding with or immediately following the date on which a covered employee (as defined in the Plan) first satisfies the following requirements: the individual has (a) been classified as a Class A Employee (as defined in the Plan); (b) attained the age of 21 ; and (c) completed one month of eligibility service (as defined in the Plan). Effective February 1, 2014, the Plan implemented an auto-enrollment feature for new and rehired employees who meet the Plan's eligibility requirements. New and rehired eligible employees who do not elect out of this auto-enrollment feature or do not change the preselected contribution election, have a contribution election of 3% of compensation (as defined in the Plan). Unless the employee designates otherwise, contributions under the auto-enrollment feature are deposited into the Qualified Default Investment Alternative ("QDIA") fund, which is the SA/Oakmark Equity and Income Strategy Fund.

Contributions
Participants may elect to contribute from 1% to 50% of compensation (as defined in the Plan) provided contributions do not exceed maximum allowable amounts under the Internal Revenue Code of 1986, as amended (the “Code”). Under the Code, individual contributions for which taxes may be deferred were limited to $17,500 in 2013 . The Code also allows participants age 50 and over to make supplemental “catch-up” contribution on a pre-tax basis, which were limited to $5,500 in 2013 . Participants' contributions vest immediately and can only be withdrawn pursuant to the appropriate provisions of the Code. Participants may roll over amounts from other qualified defined benefit or defined contribution plans and certain other plans. Rollovers for the year ended December 31, 2013 were approximately $4,685,000 , which includes $3,977,000 in rollovers attributable to the employees acquired as part of the acquisition of the connected vehicle business of Agero, Inc. by the Plan Sponsor in November 2013.

Participants also have the ability to make Roth contributions. All Roth contributions are made on an after-tax basis and if certain requirements are met, the withdrawals from the Roth account made at retirement can be free of federal income tax. The individual contributions to the Roth plan, inclusive of any additional pre-tax Plan contributions, cannot exceed the annual limit of $17,500 under the Code for 2013.  Roth contributions are matched using the same formula as the employee contributions; however, the Company match is not treated as Roth contributions. Beginning January 1, 2014, the employer match for Roth contributions are made to the QDIA fund, in the absence of any investment allocation election for pre-tax contributions. Plan participants may also elect a Roth In-Plan Rollover on amounts eligible for distribution, such as upon termination or on vested account balances after a participant reaches retirement age. This election will convert pre-tax amounts to after-tax amounts which will be subject to immediate taxation and will be separately accounted for under the Plan.

The Plan provides for discretionary employer matching contributions based on participant elective deferral contributions (other than "catch-up" contributions). For the year ended December 31, 2013 , the Company's discretionary employer matching contribution was equal to 50% of participants' elective deferral contributions per pay period on the first 6% of an employee's pre-tax salary up to a maximum of 3% of compensation. The Plan Sponsor, through the Plan's trustee, purchases shares of Holdings' common stock (or the Company's common stock, prior to November 15, 2013) in the open market which are then contributed to the Plan as employer matching contributions. The total employer matching contributions

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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements - Continued

for the year ended December 31, 2013 were approximately $4,174,000 . Beginning January 1, 2014, employer matching contributions are no longer made through the purchase of Holdings' common stock but rather in cash and such employer matching contributions are credited proportionally to the funds into which participants otherwise invest their pre-tax employee contributions unless the participant elects a separate allocation for the Company's matching contributions.

The Company may also make nonelective contributions to the Plan based upon the total compensation of all employees eligible to receive an allocation. For the year ended December 31, 2013 , the Company did not make nonelective contributions.
    
Participant Accounts
Each participant's account is credited with participant contributions, discretionary employer matching contributions, nonelective contributions and allocations of Plan earnings, if any. Allocations of Plan earnings are based on participant account balances. A participant is entitled to the benefit that can be provided from the participant's vested account balance. Participants are allowed to allocate the employer contributions to other investment alternatives immediately following the contribution.
Fund investments are generally redeemable daily and have no restrictions.

Vesting
Participants are immediately vested in their contributions, plus any earnings thereon. Discretionary employer matching contributions and nonelective contributions begin immediately upon enrollment in the Plan. These employer contributions vest at the following rates: 33% upon the completion of the first year of service, 67% upon the completion of the second year of service and 100% upon the completion of the third year of service. In addition, a participant becomes fully vested in his or her discretionary employer matching and nonelective contributions upon his or her normal retirement date (age 65 ), disability or death, or if there is a partial or full termination of the Plan.

Distributions of Benefits
Upon termination of employment, including termination due to death or disability, reaching the normal retirement date (age 65) or upon attaining age 59 1/2, a participant may receive a lump sum amount equal to the value of the participant's vested interest in his or her account. In addition, participants may elect to withdraw funds from their respective accounts in the event of hardship (as defined in the Plan).

Loans Receivables from Participants
The Plan provides for loans to active participants. Participants may borrow up to the lesser of $50,000 or 50% of the vested portions of the participant's account balance. The amount available for future borrowings by participants is reduced by the amount of their highest outstanding loan balance during the previous one-year period. A participant with an outstanding loan may not apply for another loan until the existing loan is paid in full and may not refinance an existing loan or obtain a second loan for the purpose of paying off the existing loan. There is a 14 day waiting period between when one loan is paid off and another one can be requested. Loans are secured by the balance in the participant's account and bear interest at the prime interest rate plus 1% . The term of any loan is no greater than five years, except in the case of a loan used to acquire a principal residence, in which case, the term may not exceed 10 years. Repayments must be in substantially equal installments, are generally made by payroll deductions and made not less frequently than quarterly. Some exceptions are made for unpaid leaves.

Forfeitures
Non-vested employer matching and nonelective contributions are forfeited upon termination of employment or a participant's withdrawal from the Plan. Forfeitures are used to pay Plan expenses and to reduce employer contributions. Forfeitures, inclusive of investment earnings, for the year ended December 31, 2013 , were approximately $198,900 . Unallocated non-vested assets were approximately $10,300 and $39,900 as of December 31, 2013 and 2012 , respectively. During the year ended December 31, 2013 , forfeitures were used to pay administrative expenses and reduce employer contributions by approximately $228,500 .

Administrative Expenses
Certain administrative expenses are paid by the Plan to the extent allowed by the Plan and applicable law and are not paid by the Company. Participants are also charged for certain transactions, such as the processing of a loan or a distribution. Certain other administrative expenses are paid by the Company. Investment fees and transaction-based fees charged to the Plan

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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements - Continued

for investments are deducted from income earned on a daily basis and are not separately reflected. Consequently, these fees are reflected as a reduction of investment return for such investments. There is a stock trading fee of $0.005 per share of common stock that is charged to participant accounts when participants request to be transferred in or out of Holdings' common stock (or the Company's common stock, prior to November 15, 2013).

Assets Held in Trust
Since April 1, 2005, all assets of the Plan are held by Prudential Retirement Services, an operating division of Prudential Financial. The operations of Prudential Retirement Services are conducted principally through Prudential Retirement Insurance & Annuity Company (“PRIAC”), a wholly owned subsidiary of Prudential Financial. PRIAC is responsible for, among other things, the custody and investing of the Plan's assets and the payment of benefits to eligible participants. Prudential Bank & Trust Company, FSB ("PBT"), a wholly owned subsidiary of Prudential Financial, serves as the trustee for which PRIAC is the record keeper.
    
The investment options available to participants as of December 31, 2013 and the related investment objectives were as follows:
 
Accounts Sponsored by PRIAC:
Lifetime Funds. This family of funds is comprised of five distinct, multi-asset class, multi-manager investment portfolios, which offer a range of risk and return characteristics. The investment objective of each of the five funds varies in keeping with the desired risk tolerance and associated asset allocation of the underlying portfolios. As of December 31, 2013, the Lifetime Funds were removed from the Plan and all assets were transferred to the QDIA fund. The Lifetime Funds were replaced with certain index funds, which were made available for investment on January 2, 2014.

Core Plus Bond/PIMCO Fund. This fund seeks to exceed the return of the Barclays Capital U.S Aggregate Bond Index, consistent with preservation of capital by investing in a diversified portfolio of fixed income securities.

International Growth/Artisan Partners Fund. This fund seeks maximum long-term capital growth by following a non U.S. growth investment strategy. This fund invests primarily in developed markets but also may invest in emerging and less developed markets.
                        
SA/Janus Balanced Strategy Fund. This fund seeks long-term capital growth consistent with preservation of capital and balanced by current income.

SA / T. Rowe Price Growth Stock Strategy . This fund seeks to provide long-term growth of capital and increasing dividend income by investing primarily in common stock of well-established growth companies.

Small Cap Value/Kennedy Capital Fund. This fund invests primarily in the common stock of U.S. small capitalization companies with low institutional ownership and low analyst coverage.

Small Cap Growth/Times Square Fund. This fund seeks to achieve long-term capital appreciation. The fund invests in companies with market capitalizations below $2 billion at the time of purchase.

SA/Oakmark Equity and Income Strategy Fund. This fund seeks high current income, preservation and growth of capital by investing primarily in U.S. equity and fixed income securities. This fund has been designated as the QDIA fund for the Plan.

Mid Cap Growth/Times Square Fund. This fund seeks to outperform the Russell Midcap Growth Index in a risk controlled manner.

Dryden S&P 500 Index Fund. This fund is constructed to reflect the composition of the S&P 500 Index. It seeks to provide long-term growth of capital and income.

Guaranteed Income Fund. This fund is a stable value fund designed to provide safety of principal, liquidity, and a competitive rate of return.


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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements - Continued

Audited financial statements and prospectuses or other disclosure documents for the above funds, except for the Guaranteed Income Fund, are available annually to participants via www.prudential.com. Past performance of the funds is not an indicator of future results.

Additional Accounts:
American Funds Capital World Growth and Income R4 Fund. This fund seeks long term growth of capital while providing current income and invests primarily in well-established companies located throughout the world whose common stock is denominated in U.S dollars or other currencies. The fund may also invest in issuers in developing countries.

AllianzGI NFJ International Value Institutional Fund. This fund seeks long-term growth of capital and income and invests significantly in the common stock and other equity securities of non-U.S. companies with market capitalizations greater than $1 billion which are expected to generate income. The fund may also invest up to half of its assets in emerging market securities.

Columbia Dividend Income Z Fund. This investment seeks total return consisting of current income and capital appreciation through investing in a diversified portfolio of income producing equity securities. The fund may invest a portion of its net assets in preferred stocks and convertible securities.

JPMorgan Mid Cap Value Institutional Fund. This investment seeks growth from capital appreciation through investing in equity securities of companies with market capitalizations between $1 billion and $20 billion at the time of purchase. The fund's investments are primarily in common stocks and real estate investment trusts (REITs).

Common Stock. This option allows participants to invest in the common stock of Sirius XM Radio Inc. through November 14, 2013 and, effective November 15, 2013, the common stock of Sirius XM Holdings Inc., which is the parent of Sirius XM Radio Inc.

2. Summary of Significant Accounting Policies

Basis of Accounting
The financial statements of the Plan have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

Payment of Benefits
For financial statement purposes, participant withdrawals and distributions (benefits payments) are recorded when paid.

Use of Estimates
In presenting the Plan's financial statements, management makes estimates and assumptions that affect the amounts reported and accompanying notes. Estimates, by their nature, are based on judgment and available information. Actual results could differ materially from those estimates.
Significant estimates inherent in the preparation of the accompanying financial statements include the fair value of Plan assets and net appreciation (depreciation) in the fair value of investments.

Investment Valuation and Income Recognition
Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Refer to Note 3 for valuation methodology by investment type.

Net appreciation (depreciation) in fair value of investments consists of realized gains and losses and the change in unrealized gains and losses in the Plan's investments. Realized gains and losses from the sale of investments are computed using the participant's cost basis in the investment aggregated at the Plan level. Net changes in unrealized appreciation (depreciation) in investments represents the difference between the fair value of investments held at year-end and the cost of investments purchased in the current fiscal year or the fair value of investments held at the end of the preceding year.


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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements - Continued

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income.

Investment in Insurance Contracts
As described in Accounting Standards Codification ("ASC") 962, Plan Accounting-Defined Contribution Pension Plans, investment contracts held by a defined contribution plan are required to be reported at fair value. The Guaranteed Income Fund is a group annuity contract issued by PRIAC and is backed by the full faith and creditworthiness of the issuer. Guarantees are based on the claims-paying ability of PRIAC and not on the value of the securities within the insurer's general account. The credit rating of the issuer at December 31, 2013 was considered investment grade and there are no reserves against contract value for credit risk of the contract issuer or otherwise. Only an event causing liquidity constraints at PRIAC could limit the ability of the Plan to transact at the contract value to be paid within 90 days, or in rare circumstances, the contract value to be paid over time. There are not any events that allow the issuer to terminate the contract and which require the Plan sponsor to settle at an amount different than contract value to be paid either within 90 days or over time. The Plan considers this contract to be benefit responsive.

The Guaranteed Income Fund does not operate like a mutual fund, variable annuity product, or conventional fixed rate individual annuity product. Under the group annuity contract that supports this product, participants may ordinarily direct a permitted withdrawal or transfer of all or a portion of their account balance at contract value, within reasonable timeframes. Contract value represents deposits made to the contract, plus earnings at guaranteed crediting rates, less withdrawals and fees. Interest is credited on contract balances using the “portfolio rate” approach. Under this methodology, a single interest crediting rate is applied to all contributions made to the product regardless of the timing of these contributions. Interest crediting rates are reviewed on a semi-annual basis for resetting by the trustee. When establishing interest crediting rates for this product, the trustee considers many factors, including current economic and market conditions, the general interest rate environment and both the expected and actual experience of a reference portfolio within the general account. These rates are established without the use of a specific formula. The minimum crediting rate under the contract issued by PRIAC is 1.50% . The Average Earnings Yield by the Plan and the Average Yield Credited to participants was 2.15% for the year ended December 31, 2013 . The Average Earnings Yield is calculated by dividing the earnings credited to the participants on the last day of the plan year by the end of plan year fair value and then annualizing the results. As a result of the current stable value product construction, no adjustments are required to mediate between the average earnings credited to the Plan and the average earnings credited to the participants.

The Guaranteed Income Fund is included at its carrying value in the statements of net assets available for benefits, which approximated its fair value at each of December 31, 2013 and 2012 . The contract value of the investment approximates the fair value, due to the nature of the investment contracts not having a fair value adjustment upon discontinuance.
    
Loans Receivable from Participants
Loans receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are reclassified as distributions based upon the provisions of the Plan document.

3. Fair Value Measurements

ASC 820, Fair Value Measurement , provides a framework for measuring fair value. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Plan considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The Plan maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the following fair value measurement.

Level 1: quoted prices in active markets for identical assets or liabilities;
Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not

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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements - Continued

active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or
Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There was no change in the Plan's investment valuation methodologies as of December 31, 2013 compared to December 31, 2012 .

All transfers are assumed to occur at the beginning of the reporting period. There were no transfers or reclassifications into or out of fair value levels for the year ended December 31, 2013 .

Investments Measured at Fair Value on a Recurring Basis

Investments measured at fair value consisted of the following types of instruments as of December 31, 2013 and December 31, 2012 (Level 1, 2 and 3 inputs are defined above):

 
 
As of December 31, 2013
 
As of December 31, 2012
(in thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Pooled Separate Accounts:
 

 

 

 

 

  

  

 

Large Cap Equity Funds
 
$

 
$
25,226

 
$

 
$
25,226

 
$

 
$
17,110

 
$

 
$
17,110

Mid Cap Equity Funds
 

 
44,505

 

 
44,505

 

 
11,687

 

 
11,687

Small Cap Equity Funds
 

 
15,243

 

 
15,243

 

 
9,447

 

 
9,447

International Funds
 

 
8,847

 

 
8,847

 

 
6,596

 

 
6,596

Bond Funds
 

 
8,327

 

 
8,327

 

 
8,529

 

 
8,529

Balanced Funds
 

 
4,794

 

 
4,794

 

 
3,532

 

 
3,532

Target Dated Funds
 

 

 

 

 

 
19,047

 

 
19,047

Total
 

 
106,942

 

 
106,942

 

 
75,948

 

 
75,948

Mutual funds:
 

 

 

 

 

 

 

 

Growth & Income Fund
 
4,724

 

 

 
4,724

 
3,442

 

 

 
3,442

International Value Fund
 
1,978

 

 

 
1,978

 
1,235

 

 

 
1,235

Dividend Income Fund
 
13,455

 

 

 
13,455

 
9,916

 

 

 
9,916

Mid Cap Value Fund
 
5,040

 

 

 
5,040

 
3,347

 

 

 
3,347

Total
 
25,197

 

 

 
25,197

 
17,940

 

 

 
17,940

Guaranteed Income Fund:
 

 

 

 

 

 

 

 

Stable Value Fund
 

 
16,200

 

 
16,200

 

 
15,249

 

 
15,249

Common stock:
 

 

 

 

 

 

 

 

Domestic Large Cap
 
67,037

 

 

 
67,037

 
56,514

 

 

 
56,514

Total investments measured at fair value
 
$
92,234

 
$
123,142

 
$

 
$
215,376

 
$
74,454

 
$
91,197

 
$

 
$
165,651


The Plan's valuation methodology for mutual funds and Holdings' common stock (or the Company's common stock, prior to November 15, 2013) was derived from quoted market prices as these instruments have an active market which results in a Level 1 asset categorization.

Pooled separate accounts are classified as Level 2 investments. The fair value of pooled separate accounts is measured by the net unit value as reported by PRIAC, which is based on the fair value of the underlying assets of the account.

The Plan's valuation methodology for the Guaranteed Income Fund was derived from corroboration of observable market inputs, specifically interest rates offered and the credit worthiness of the issuer which supports their ability to meet its obligation under the investment contract and credit rating. This product is not a traditional Guaranteed Investment Contract

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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements - Continued

("GIC"), and therefore there are no known cash flows that could be discounted. The investment contract does not have a fair value adjustment upon discontinuance. Based on this assessment, fair value is presumed to approximate contract value and is classified within Level 2 of the valuation hierarchy.

4. Investments
    
The fair values of investments that individually represent 5% or more of the Plan's net assets are as follows:
 
 
As of December 31,
 
 
2013
 
2012
 
 
(in thousands)
Investments:
 
 
 
 
Common stock
 
$
67,037

 
$
56,514

SA/Oakmark Equity and Income Strategy Fund
 
39,594

 
8,657

Guaranteed Income Fund
 
16,200

 
15,249

SA/T. Rowe Price Growth Stock Strategy Fund
 
13,834

 
10,273

Columbia Dividend Income Z Fund
 
13,455

 
9,916

Dryden S&P 500 Index Fund
 
11,392

 
*

Core Plus Bond/PIMCO Fund
 
*

 
8,529

——
 
 
 
 
* Balance is only presented for the period where the investment represented 5% or more of the Plan's net assets.

During 2013, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in fair value as follows:
 
 
For the Year Ended December 31, 2013
 
 
(in thousands)
Pooled separate accounts
 
$
20,605

Common stock
 
11,802

Mutual funds
 
4,321

Net appreciation in fair value of investments
 
$
36,728



5. Risks and Uncertainties
    
The Plan may invest in various types of investment securities. Investment securities are exposed to various risks, such as interest rate, market, and/or credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the amounts reported in the statements of net assets available for benefits.

The Plan may invest indirectly in securities with contractual cash flows, such as asset-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities, including securities backed by subprime mortgage loans. The value, liquidity and related income of these securities are sensitive to changes in economic conditions, including real estate value, delinquencies or defaults, or both, and may be adversely affected by shifts in the market's perception of the issuers and changes in interest rates.

The Plan provides for investment in Holdings' common stock (or the Company's common stock, prior to November 15, 2013). At December 31, 2013 and 2012 , approximately 31% and 34% of the Plan's total net assets were invested in the common stock of Holdings' and the Company, respectively. The underlying value of Holdings' common stock is dependent upon the performance of Holdings and the market's evaluation of such performance.


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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Notes to Financial Statements - Continued

6. Tax Status
    
The Plan received a favorable determination letter from the Internal Revenue Service (“IRS”) dated June 6, 2012. The Plan is required to operate in conformity with Section 401(a) of the Code to maintain its qualification. Although the Plan has been amended since receiving the determination letter, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code and, therefore, the Plan is qualified and the related trust is tax exempt. Therefore, there is no provision for income taxes recorded in the Plan's financial statements.

In 2013 , certain operational errors were identified relating to participant deferral and discretionary employer matching contributions and certain rollover contributions that were not properly made during 2013 . The Plan Sponsor has corrected the errors and does not believe that these operational errors affect the Plan's tax qualified status.
    
GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013 , there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the Plan's financial statements. The Plan is subject to routine audits by taxing jurisdictions, however, there are currently no audits for any tax periods in progress. The IRS generally has the ability to examine the Plan for the years 2010 through 2012.

7. Plan Termination
     
The Company reserves the right to terminate the Plan, in whole or in part, at any time, subject to the provisions of ERISA. In the event that such termination occurs, all amounts credited to participants' accounts will become 100% vested and the trustee, in accordance with the terms of the Plan, will distribute the net assets of the Plan in a uniform and non-discretionary manner.

8. Related Party Transactions

Plan investments in pooled separate accounts and the Guaranteed Income Fund are managed by PRIAC, and mutual funds and common stock by PBT, both of whom are trustees (as defined in the Plan). The Plan also invests in the common stock of Holdings, which is the parent of the Company. Transactions with PRIAC, PBT, the Company and Holdings qualify as party-in-interest transactions.





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SIRIUS XM RADIO 401 (k) SAVINGS PLAN
Schedule H, line 4i-Schedule of Assets (Held at End of Year)
As of December 31, 2013
(in thousands, except units and shares)

 
 
(b)
 
(c)
 
(e)
(a)
 
Identity of Issuer, Borrower, Lessor or Similar Party
 
Description of Investment, Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value
 
Current Value
*
 
Prudential Retirement
 
SA/T. Rowe Price Growth Stock Strategy Fund:
 
$
13,834


 
Insurance & Annuity Company
 
256,433 units in participation
 

*
 
Prudential Retirement
 
Dryden S&P 500 Index Fund:
 
11,392


 
Insurance & Annuity Company
 
87,226 units in participation
 

*
 
Prudential Retirement
 
SA/Janus Balanced Strategy Fund:
 
4,794


 
Insurance & Annuity Company
 
77,440 units in participation
 

*
 
Prudential Retirement
 
Mid Cap Growth/Times Square Fund:
 
4,911


 
Insurance & Annuity Company
 
169,016 units in participation
 

*
 
Prudential Retirement
 
SA/Oakmark Equity and Income Strategy Fund:
 
39,594


 
Insurance & Annuity Company
 
783,711 units in participation
 

*
 
Prudential Retirement
 
Small Cap Value/Kennedy Capital Fund:
 
5,371


 
Insurance & Annuity Company
 
170,269 units in participation
 

*
 
Prudential Retirement
 
Small Cap Growth/Times Square Fund:
 
9,872


 
Insurance & Annuity Company
 
175,338 units in participation
 

*
 
Prudential Retirement
 
International Growth/Artisan Partners Fund:
 
8,847


 
Insurance & Annuity Company
 
416,969 units in participation
 

*
 
Prudential Retirement
 
Core Plus Bond/PIMCO Fund:
 
8,327


 
Insurance & Annuity Company
 
443,174 units in participation
 


 
American Funds Capital World
 
American Funds Capital World Growth and Income R4 Fund:
 
4,724


 
Growth and Income Fund
 
104,445 shares in participation
 


 
Allianz Global
 
AllianzGI NFJ International Value Institutional Fund:
 
1,978


 
International Value Institutional Fund
 
85,189 shares in participation
 


 
Columbia
 
Columbia Dividend Income Z Fund:
 
13,455


 
Dividend Income Fund
 
733,995 shares in participation
 


 
JP Morgan
 
JPMorgan Mid Cap Value Institutional Fund:
 
5,040


 
Mid Cap Value Institutional
 
143,519 shares in participation
 

*
 
Prudential Retirement
 
Guaranteed Income Fund:
 
16,200


 
Insurance & Annuity Company
 
429,037 units in participation
 

*
 
Sirius XM Holdings Inc.
 
Sirius XM Holdings Inc. common stock:
 
67,037


 

 
19,208,354 shares in participation
 

*
 
Loans receivable from participants
 
161 outstanding loans with rates of 4.25% - 9.5% and maturities from 2014 - 2023
 
2,282


 
Total Investments
 

 
$
217,658


 

 

 
 
* Represents a party-in-interest as defined in ERISA.
 
 
See accompanying report of independent registered public accounting firm.

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SIGNATURES

The Plan. Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

SIRIUS XM RADIO 401(k) SAVINGS PLAN
 
 
By:
/s/     D AVID  J. F REAR
 
David J. Frear
 
Executive Vice President and
 
Chief Financial Officer
 
(Principal Financial Officer)

June 16, 2014


13
Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Employee Benefits Committee of the
Sirius XM Radio 401(k) Savings Plan:

We consent to the incorporation by reference in the Registration Statement (No. 333-179600) on Form S-8 of Sirius XM Holdings Inc., successor registrant to its direct wholly-owned subsidiary Sirius XM Radio Inc. (registrant prior to November 15, 2013), of our report dated June 16, 2014 , with respect to the statements of net assets available for benefits of the Sirius XM Radio 401(k) Savings Plan as of December 31, 2013 and 2012, the related statement of changes in net assets available for benefits for the year ended December 31, 2013, and the supplemental Schedule H, line 4i - schedule of assets (held at end of year) as of December 31, 2013, which report appears in the December 31, 2013 annual report on Form 11-K of the Sirius XM Radio 401(k) Savings Plan.


/s/ KPMG LLP
New York, New York
June 16, 2014