Investor Relations

Sirius Reports Fourth Quarter and Full Year 2006 Results

- Achieves First-Ever Quarter of Positive Cash Flow from Operations and Free Cash Flow
- 2006 Revenue Increases 163% to a Record $637 Million
- Highest Satellite Radio Subscriber Share in Company's History
- 2007 Outlook For More Than 8 Million Subscribers and Revenue Approaching $1 Billion
- Executed Definitive Merger Agreement with XM Satellite Radio

NEW YORK, Feb 27, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- SIRIUS Satellite Radio (Nasdaq: SIRI) today announced record full year and fourth quarter 2006 results driven by an 82% increase in subscribers to more than 6 million, positive free cash flow in the fourth quarter and the highest satellite radio subscriber market share in the company's history.

(Logo: http://www.newscom.com/cgi-bin/prnh/19991118/NYTH125 )

"In 2006, SIRIUS added 2.7 million new subscribers, an annual record for satellite radio, and captured 62% share of satellite radio subscriber growth. More importantly, SIRIUS achieved positive free cash flow in the fourth quarter 2006 -- four years after adding our first subscriber," said Mel Karmazin, CEO of SIRIUS. "The fourth quarter marked the fifth consecutive quarter of satellite radio subscriber leadership for SIRIUS and a record 67% of satellite radio growth. We look forward to another year of strong growth in 2007, anticipating that we will approach $1 billion in total revenue. The pending merger with XM will offer unprecedented choice for consumers and create tremendous value for our shareholders."

SIRIUS ended 2006 with 6,024,555 subscribers, up 82% from 3,316,560 subscribers at the end of 2005. Retail subscribers increased 64% in 2006 to 4,041,826 from 2005 retail subscribers of 2,465,363. OEM subscribers increased 138% in 2006 to 1,959,009 from 823,693 at the end of 2005. During the fourth quarter 2006, SIRIUS added 905,247 subscribers, or 67% of satellite radio net additions.

Total revenue for 2006 increased to $637.2 million, up 163% from 2005 total revenue of $242.2 million. Fourth quarter 2006 total revenue of $193.4 million increased 142% from fourth quarter 2005 revenue of $80.0 million. Average monthly revenue per subscriber (or "ARPU") was $11.01 in 2006 up from $10.34 in 2005. 2006 ARPU included a $0.56 contribution from net advertising revenue, up 100% from the $0.28 contribution from net advertising revenue reported in 2005. Average monthly churn for 2006 was 1.9% reflecting total churn from both retail and OEM channels. SAC per gross subscriber addition was $114 for 2006 improving 18% over 2005's SAC per gross subscriber addition of $139.

SIRIUS reported a net loss of ($1.1) billion, or ($0.79) per share, for 2006. The adjusted net loss for 2006 (adjusted to primarily exclude stock-based compensation) improved to ($656.0) million for 2006, and the adjusted loss from operations improved to ($513.1) million versus 2006 guidance of ($565) million. The free cash flow loss for the full year of 2006 was ($500.7) million, in-line with previous guidance.

In the fourth quarter 2006, SIRIUS reported a net loss of ($245.6) million, or ($0.17) per share. The adjusted net loss (adjusted to primarily exclude stock-based compensation) improved to ($203.0) million for the fourth quarter, and the adjusted loss from operations improved to ($166.8) million.

The company posted positive free cash flow in the fourth quarter 2006 of $30.4 million, solidly reaching its goal of positive free cash flow as early as the fourth quarter of 2006. The definition of free cash flow is the sum of net cash provided by (used in) operating activities, capital expenditures and restricted and other investment activity.

    2007 OUTLOOK

    SIRIUS today provided the following guidance for the full year 2007:

    -- Total revenue approaching $1 billion
    -- More than 8 million subscribers at year-end
    -- Average monthly subscriber churn of approximately 2.2 - 2.4%
    -- SAC per gross subscriber addition of approximately $95

In light of the pending merger with XM, and the uncertainty surrounding the timing and financial impact, the company is no longer currently providing cash flow guidance. See section on the pending merger of equals with XM Satellite Radio Holdings Inc.

2006 HIGHLIGHTS - "The Best Radio on Radio"

MUSIC, TALK AND ENTERTAINMENT LEADER

2006 was an unprecedented year for new and exclusive programming from SIRIUS with the launch of the new advertising campaign, "The Best Radio on Radio." SIRIUS offers 69 channels of 100% commercial free music programming covering a broad array of music genres.

SIRIUS has an unmatched lineup of programming, with over 65 channels of sports, news, talk, entertainment, traffic, weather and data from such top names as Howard Stern, Jamie Foxx, CNBC, CNN, Martha Stewart, Tony Hawk, Richard Simmons, Jimmy Buffett, ABC News, BBC World Service, Maxim, NPR, Radio Disney and Barbara Walters.

SIRIUS talk programming encompasses comedy, public affairs, the arts, the trucking life and represents a full political spectrum from liberal "left" to conservative "right." Around-the-clock traffic and weather reports covering the top 20 US traffic markets are also available nationwide. During 2006, SIRIUS announced a broad array of new programming including two full-time Howard Stern channels, Deepak Chopra, Cosmo Radio, Barbara Walters, the Catholic Channel, the Metropolitan Opera, Blue Collar Radio, NASCAR's Tony Stewart show and Playboy Radio.

SPORTS LEADER

SIRIUS is the leading provider of sports radio programming, broadcasting play-by-play action of more than 350 professional and college teams. SIRIUS features sports news and talk and play-by-play action from the NFL, NASCAR, NBA, NHL, Barclays English Premier League soccer, UEFA Champions League, the Wimbledon Championships, NCAA(R) Division 1 Men's Basketball Championship (March 13 - April 2) and more than 150 colleges and universities, plus live coverage of several of the years top thoroughbred horse races. SIRIUS is the only radio outlet to provide listeners with live coverage of every NFL game and starting in 2007 will air every NASCAR Nextel Cup Series, NASCAR Busch Series and NASCAR Craftsman Truck Series race. SIRIUS also broadcasts over 1,000 NBA games per season, plus up to 40 NHL games per week and features programming from ESPN Radio and ESPNews.

On Super Bowl Sunday SIRIUS offered ten different game calls of Super Bowl XLI in seven languages, including both teams' local radio broadcasts.

RESULTS OF OPERATIONS

The discussion of operating expenses below excludes the effects of stock- based compensation. The company believes this presentation improves the transparency of disclosure and is consistent with the way operating results are evaluated.

FOURTH QUARTER 2006 VERSUS FOURTH QUARTER 2005

For the fourth quarter of 2006, SIRIUS recognized total revenue of $193.4 million compared with $80.0 million for the fourth quarter of 2005. This 142%, or $113.4 million, increase in revenue was driven by a $99.4 million increase in subscriber revenue resulting from the net increase in subscribers of 2,707,995, or 82%, from December 31, 2005 to December 31, 2006; a $5.4 million increase in net advertising revenue; and a $7.5 million increase in equipment revenue.

The company's adjusted loss from operations decreased $59.5 million to ($166.8) million for the fourth quarter of 2006 from ($226.3) million for the fourth quarter of 2005 (refer to the reconciliation table of net loss to adjusted loss from operations). This decrease was primarily driven by an increase in total revenue of $113.4 million, which more than offset a $53.9 million increase in operating expenses.

Programming and content expenses increased $29.8 million to $64.8 million for the fourth quarter of 2006 from $35.0 million for the fourth quarter of 2005. The increase was primarily attributable to license fees and talent costs associated with new programming, including the Howard Stern show which launched in January 2006, and higher broadcast and webstreaming royalties as a result of the company's larger subscriber base.

Customer service and billing expenses increased $3.9 million to $23.9 million for the fourth quarter of 2006 from $20.0 million for the fourth quarter of 2005. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in the company's subscriber base and transaction fees due to the addition of new subscribers. Customer service and billing expenses per average subscriber per month declined 44% to $1.49 for the fourth quarter of 2006 from $2.66 for the fourth quarter of 2005.

Cost of equipment increased $14.7 million to $22.1 million for the fourth quarter of 2006 from $7.4 million for the fourth quarter of 2005. The increase was primarily attributable to higher sales volume and per unit costs as the company continued to introduce new products through the direct to consumer distribution channel.

Sales and marketing expenses increased $22.1 million to $85.1 million for the fourth quarter of 2006 from $63.0 million for the fourth quarter of 2005. This 35% increase in sales and marketing expenses compared with a 142% increase in total revenue from $80.0 million for the fourth quarter of 2005 to $193.4 million for the fourth quarter of 2006. The increase in sales and marketing expenses was primarily attributable to increased OEM revenue share as a result of a 138% increase in the company's OEM subscriber base, as well as increased cooperative marketing and advertising costs.

Subscriber acquisition costs decreased $24.2 million to $121.0 million for the fourth quarter of 2006 from $145.2 million for the fourth quarter of 2005. The decrease was primarily attributable to lower commissions and decreased aftermarket hardware subsidies as the company continued to reduce manufacturing and chip set costs, offset by increased OEM hardware subsidies due to higher production volume and costs related to FM transmitter compliance with FCC rules.

SAC per gross subscriber addition decreased 9% from $113 for the fourth quarter of 2005 to $103 for the fourth quarter of 2006 primarily due to lower average commission rates and decreased aftermarket average subsidy rates as the company continued to reduce manufacturing and chip set costs, offset by the per subscriber effect of costs related to FM transmitter compliance with FCC rules.

General and administrative expenses increased $6.3 million to $23.2 million for the fourth quarter of 2006 from $16.9 million for the fourth quarter of 2005. The increase was primarily a result of employment-related costs, legal fees and bad debt expense to support the growth of the business.

For the fourth quarter of 2005, the company recorded ($6.2) million for its share of SIRIUS Canada Inc.'s net loss.

YEAR ENDED DECEMBER 31, 2006 VERSUS YEAR ENDED DECEMBER 31, 2005

For the year ended December 31, 2006, SIRIUS recognized total revenue of $637.2 million compared with $242.2 million for the year ended December 31, 2005. This 163%, or $395.0 million, increase in revenue was driven by a $351.8 million increase in subscriber revenue resulting from the net increase in subscribers of 2,707,995, or 82%, from December 31, 2005 to December 31, 2006; a $24.9 million increase in net advertising revenue; and a $14.5 million increase in equipment revenue.

The company's adjusted loss from operations decreased $54.4 million to ($513.1) million for the year ended December 31, 2006 from ($567.5) million for the year ended December 31, 2005 (refer to the reconciliation table of net loss to adjusted loss from operations). This decrease was primarily driven by an increase in total revenue of $395.0 million, which more than offset a $340.6 million increase in operating expenses.

Satellite and transmission expenses increased $11.3 million to $39.2 million for the year ended December 31, 2006 from $27.9 million for the year ended December 31, 2005. The increase was primarily attributable to an impairment charge in the second quarter of 2006 associated with certain satellite long-lead time parts purchased in 1999 that will no longer be needed as a result of the company's new satellite contract announced in 2006.

Programming and content expenses increased $131.6 million to $230.2 million for the year ended December 31, 2006 from $98.6 million for the year ended December 31, 2005. The increase was primarily attributable to license fees and talent costs associated with new programming, including the Howard Stern show which launched in January 2006, and higher broadcast and webstreaming royalties as a result of the company's larger subscriber base.

Customer service and billing expenses increased $21.5 million to $68.1 million for the year ended December 31, 2006 from $46.6 million for the year ended December 31, 2005. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in the company's subscriber base and transaction fees due to the addition of new subscribers. Customer service and billing expenses per average subscriber per month declined 41% to $1.24 for the year ended December 31, 2006 from $2.10 for the year ended December 31, 2005.

Cost of equipment increased $23.4 million to $35.2 million for the year ended December 31, 2006 from $11.8 million for the year ended December 31, 2005. The increase was primarily attributable to higher sales volume and per unit costs as the company continued to introduce new products through the direct to consumer distribution channel.

Sales and marketing expenses increased $51.9 million to $222.5 million for the year ended December 31, 2006 from $170.6 million for the year ended December 31, 2005. This 30% increase in sales and marketing expenses compared with a 163% increase in total revenue from $242.2 million for the year ended December 31, 2005 to $637.2 million for the year ended December 31, 2006. The increase in sales and marketing expenses was primarily attributable to increased retail residuals; OEM revenue share as a result of a 138% increase in the company's OEM subscriber base; cooperative marketing and advertising costs; and compensation related costs.

Subscriber acquisition costs increased $70.1 million to $419.7 million for the year ended December 31, 2006 from $349.6 million for the year ended December 31, 2005. The increase was primarily attributable to decreased aftermarket hardware subsidies as the company continued to reduce manufacturing and chip set costs, offset by increased OEM hardware subsidies due to higher production volume and costs related to FM transmitter compliance with FCC rules.

SAC per gross subscriber addition decreased 18% from $139 for the year ended December 31, 2005 to $114 for the year ended December 31, 2006 primarily due to lower average commission rates and decreased aftermarket and OEM average subsidy rates as the company continued to reduce manufacturing and chip set costs, offset by the per subscriber effect of costs related to FM transmitter compliance with FCC rules.

General and administrative expenses increased $27.7 million to $87.5 million for the year ended December 31, 2006 from $59.8 million for the year ended December 31, 2005. The increase was primarily a result of employment- related costs, legal fees and bad debt expense to support the growth of the business.

Engineering, design and development expenses increased $14.0 million to $58.7 million for the year ended December 31, 2006 from $44.7 million for the year ended December 31, 2005 primarily as a result of costs associated with OEM tooling and manufacturing upgrades and receiver integration for factory installations of SIRIUS radios; development costs associated with the manufacturing of SIRIUS radios; and additional personnel-related costs to support research and development efforts.

In September 2005, the company also recorded a ($6.2) million loss from the redemption of its 15% Senior Secured Discount Notes due 2007 and 141/2% Senior Secured Notes due 2009.

For the year ended December 31, 2006 and 2005, the company recorded ($4.4) million and ($6.9) million, respectively, for its share of SIRIUS Canada, Inc.'s net loss.

SIRIUS reported a net loss of ($1.1) billion, or ($0.79) per share, for the year ended December 31, 2006, including a ($0.01) per share impact from the impairment loss and ($0.31) per share impact from stock-based charges, compared with a net loss of ($863.0) million, or ($0.65) per share, for the year ended December 31, 2005, including a ($0.12) per share impact from stock- based charges. The adjusted net loss per share, or net loss per share excluding the impairment loss and stock-based charges, was ($0.47) for the year ended December 31, 2006 compared with an adjusted net loss per share of ($0.53) for the year ended December 31, 2005 (refer to the reconciliation table of net loss per share to adjusted net loss per share).

PENDING MERGER OF EQUALS WITH XM

On February 19, 2007, XM Satellite Radio and SIRIUS announced a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals. XM shareholders will receive 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. The companies expect the transaction to be completed by the end of 2007.

The companies filed their Merger Agreement with the Securities and Exchange Commission on a Form 8-K on February 21, 2007.

This communication is being made in respect of the proposed business combination involving SIRIUS and XM. In connection with the proposed transaction, SIRIUS plans to file with the SEC a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus and each of SIRIUS and XM plan to file with the SEC other documents regarding the proposed transaction. The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of SIRIUS and XM. INVESTORS AND SECURITY HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC by SIRIUS and XM through the web site maintained by the SEC at www.sec.gov. Free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC can also be obtained by directing a request to Sirius Satellite Radio Inc., 1221 Avenue of the Americas, New York, NY 10020, Attention: Investor Relations or by directing a request to XM Satellite Radio Holdings Inc., 1500 Eckington Place, NE. Washington, DC 20002, Attention: Investor Relations.

SIRIUS, XM and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding SIRIUS' directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2005, which was filed with the SEC on March 13, 2006, and its proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on April 21, 2006, and information regarding XM's directors and executive officers is available in XM's Annual Report on Form 10-K, for the year ended December 31, 2005, which was filed with the SEC on March 3, 2006 and its proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on April 25, 2006. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available.


                 Sirius Satellite Radio Inc. and Subsidiaries
        Subscriber Data, Metrics and Other Non-GAAP Financial Measures
               (Dollars in thousands, unless otherwise stated)
                                 (Unaudited)

    Subscribers:
                              For the Three Months         For the Years
                               Ended December 31,        Ended December 31,
                               2006        2005          2006        2005

    Beginning subscribers    5,119,308   2,173,920     3,316,560   1,143,258
    Net additions              905,247   1,142,640     2,707,995   2,173,302
      Ending subscribers     6,024,555   3,316,560     6,024,555   3,316,560

    Retail                   4,041,826   2,465,363     4,041,826   2,465,363
    OEM                      1,959,009     823,693     1,959,009     823,693
    Hertz                       23,720      27,504        23,720      27,504
      Ending subscribers     6,024,555   3,316,560     6,024,555   3,316,560

    Retail                     559,312     900,645     1,576,463   1,554,108
    OEM                        348,935     241,705     1,135,316     620,224
    Hertz                       (3,000)        290        (3,784)     (1,030)
      Net additions            905,247   1,142,640     2,707,995   2,173,302


    Metrics:
                              For the Three Months         For the Years
                               Ended December 31,        Ended December 31,
                               2006        2005          2006        2005

    Gross subscriber
     additions              1,234,576    1,266,674     3,758,163   2,519,301
    Deactivated
     subscribers              329,329      124,034     1,050,168     345,999
    Free cash flow
     (1)(6)                   $30,409    $ (62,551)    $(500,715)  $(333,922)
    Average monthly
     churn (2)(6)                 2.0%         1.5%          1.9%        1.5%
    SAC per gross subscriber
     addition (3)(6)             $103         $113          $114        $139
    Customer service and
     billing expenses
     per average
     subscriber (4)(6)          $1.49        $2.66         $1.24       $2.10
    Total revenue            $193,380      $80,004      $637,235    $242,245
    Monthly ARPU:
     Average monthly subscriber
      revenue per subscriber
      before effects of Hertz
      subscribers and
      mail-in rebates          $10.48       $10.76        $10.63      $10.78
     Effects of Hertz
      subscribers                0.05         0.03          0.05        0.04
     Effects of mail-in
      rebates                   (0.14)       (1.77)        (0.23)      (0.76)
     Average monthly
      subscriber revenue
      per subscriber            10.39         9.02         10.45       10.06
     Average monthly net
      advertising
      revenue per
      subscriber                 0.53         0.40         0.56         0.28
     ARPU (5)(6)               $10.92        $9.42       $11.01       $10.34



                 Sirius Satellite Radio Inc. and Subsidiaries
  Subscriber Data, Metrics and Other Non-GAAP Financial Measures - Continued
               (Dollars in thousands, unless otherwise stated)
                                 (Unaudited)

    Adjusted Loss from Operations:
                              For the Three Months         For the Years
                               Ended December 31,         Ended December 31,
                               2006        2005           2006        2005

    Net loss                $(245,597)   $(311,389) $(1,104,867)   $(862,997)
     Impairment loss                -            -       10,917            -
     Depreciation              27,495       24,915      105,749       98,555
     Stock-based compensation  42,625       46,196      437,918      163,078
     Other income (expense)     8,512       13,378       35,078       31,546
     Income tax expense           156          631        2,065        2,311
    Adjusted loss from
     operations (7)         $(166,809)   $(226,269)   $(513,140)   $(567,507)


    Adjusted Net Loss and Adjusted Net Loss per Share:

                              For the Three Months         For the Years
                               Ended December 31,         Ended December 31,
                               2006        2005           2006        2005

    Net loss                $(245,597)   $(311,389) $(1,104,867)   $(862,997)
      Impairment loss               -            -       10,917            -
      Stock-based
       compensation            42,625       46,196      437,918      163,078
    Adjusted net loss (8)   $(202,972)   $(265,193)   $(656,032)   $(699,919)
    Net loss per share (basic
     and diluted)              $(0.17)      $(0.23)      $(0.79)      $(0.65)
      Impairment loss               -            -         0.01            -
      Stock-based compensation   0.03         0.03         0.31         0.12
    Adjusted net loss per share
     (basic and diluted) (8)   $(0.14)      $(0.20)      $(0.47)      $(0.53)
    Weighted average common
     shares outstanding
     (basic and diluted)    1,413,866    1,335,650    1,402,619    1,325,739


                 Sirius Satellite Radio Inc. and Subsidiaries
  Subscriber Data, Metrics and Other Non-GAAP Financial Measures - Continued
               (Dollars in thousands, unless otherwise stated)
                                 (Unaudited)

    Condensed Consolidated Statements of Operations:

                              For the Three Months         For the Years
                               Ended December 31,         Ended December 31,
                               2006        2005           2006        2005

    Total revenue            $193,380      $80,004     $637,235     $242,245

    Operating expenses:
     Satellite and
      transmission              7,152        7,147       39,229       27,856
     Programming and content   64,843       35,018      230,215       98,607
     Customer service
      and billing              23,919       20,007       68,137       46,653
     Cost of equipment         22,105        7,446       35,233       11,827
     Sales and marketing       85,113       63,049      222,492      170,592
     Subscriber acquisition
      costs                   121,046      145,180      419,716      349,641
     General and
      administrative           23,224       16,913       87,538       59,831

     Engineering, design and
      development              12,787       11,513       58,732       44,745
     Depreciation              27,495       24,915      105,749       98,555
     Stock-based compensation  42,625       46,196      437,918      163,078
      Total operating
       expenses               430,309      377,384    1,704,959    1,071,385
    Loss from operations     (236,929)    (297,380)  (1,067,724)    (829,140)
      Other income (expense)   (8,512)     (13,378)     (35,078)     (31,546)
    Loss before income taxes (245,441)    (310,758)  (1,102,802)    (860,686)
      Income tax expense         (156)        (631)      (2,065)      (2,311)
    Net loss                $(245,597)   $(311,389) $(1,104,867)   $(862,997)


                 Sirius Satellite Radio Inc. and Subsidiaries
                    Consolidated Statements of Operations
                    (In thousands, except per share data)
                                 (Unaudited)

                              For the Three Months         For the Years
                               Ended December 31,         Ended December 31,
                               2006          2005         2006        2005
    Revenue:
     Subscriber revenue,
      including effects of
      mail-in rebates        $167,210      $67,816     $575,404     $223,615
     Advertising revenue,
      net of agency fees        8,451        3,037       31,044        6,131
     Equipment revenue         16,431        8,971       26,798       12,271
     Other revenue              1,288          180        3,989          228
    Total revenue             193,380       80,004      637,235      242,245
    Operating expenses
    (excludes depreciation
     shown separately below) (1):
     Cost of services:
      Satellite and
       transmission             7,518        7,634       41,797       29,798
      Programming and content  89,478       39,694      551,989      118,076
      Customer service and
       billing                 24,086       20,151       68,949       47,202
      Cost of equipment        22,105        7,446       35,233       11,827
     Sales and marketing       89,778       74,850      242,035      212,741
     Subscriber acquisition
      costs                   122,196      163,774      451,614      399,350
     General and
      administrative           34,205       22,891      137,466       87,555
     Engineering, design
      and development          13,448       16,029       70,127       66,281
     Depreciation              27,495       24,915      105,749       98,555
    Total operating expenses  430,309      377,384    1,704,959    1,071,385
     Loss from operations    (236,929)    (297,380)  (1,067,724)    (829,140)
    Other income (expense):
     Interest and investment
      income                    6,760        9,956       33,320       26,878
     Interest expense, net of
      amounts capitalized     (15,327)     (17,142)     (64,032)     (45,361)
     Loss from redemption
      of debt                       -            -            -       (6,214)
     Equity in net loss
      of affiliate                  -       (6,199)      (4,445)      (6,938)
     Other income                  55            7           79           89
    Total other income
     (expense)                 (8,512)     (13,378)     (35,078)     (31,546)
     Loss before income
      taxes                  (245,441)    (310,758)  (1,102,802)    (860,686)
     Income tax expense          (156)        (631)      (2,065)      (2,311)
      Net loss              $(245,597)   $(311,389) $(1,104,867)   $(862,997)
    Net loss per share
     (basic and diluted)       $(0.17)      $(0.23)      $(0.79)      $(0.65)
    Weighted average common
     shares outstanding
     (basic and diluted)    1,413,866    1,335,650    1,402,619    1,325,739


                 Sirius Satellite Radio Inc. and Subsidiaries
              Consolidated Statements of Operations - continued
                                (In thousands)
                                 (Unaudited)

                               For the Three Months          For the Years
                                 Ended December 31,         Ended December 31,
                                 2006        2005         2006         2005

    (1) Amounts related to
        stock-based compensation
        included in other operating
        expenses were as follows:

    Satellite and
     transmission                $366         $487       $2,568       $1,942
    Programming and content    24,635        4,676      321,774       19,469
    Customer service and
     billing                      167          144          812          549
    Sales and marketing         4,665       11,801       19,543       42,149
    Subscriber acquisition
     costs                      1,150       18,594       31,898       49,709
    General and administrative 10,981        5,978       49,928       27,724
    Engineering, design
     and development              661        4,516       11,395       21,536
    Total stock-based
     compensation             $42,625      $46,196     $437,918     $163,078


                 Sirius Satellite Radio Inc. and Subsidiaries
                              Balance Sheet Data
                                (In thousands)
                                 (Unaudited)

                                                      As of December 31,
                                                     2006            2005
    Cash, cash equivalents and marketable
     securities                                    $408,921        $879,257
    Restricted investments                           77,850         107,615
    Working capital                                (257,799)        404,481
    Total assets                                  1,658,528       2,085,362
    Long-term debt                                1,068,249       1,084,437
    Total liabilities                             2,047,599       1,760,394
    Accumulated deficit                          (3,833,720)     (2,728,853)
    Stockholders' (deficit) equity                 (389,071)        324,968


                 Sirius Satellite Radio Inc. and Subsidiaries
                           Statements of Cash Flows
                                (In thousands)
                                 (Unaudited)

                              For the Three Months        For the Years
                               Ended December 31,        Ended December 31,
                               2006         2005         2006         2005

    Cash flows from
     operating activities:

     Net loss                $(245,597)   $(311,389) $(1,104,867)   $(862,997)
     Adjustments to reconcile
      net loss to net cash
      provided by (used in)
      operating activities:
     Depreciation               27,495       24,915      105,749       98,555
     Non-cash interest expense     775          804        3,107        3,169
     Provision for doubtful
      accounts                   1,826        1,017        7,513        4,311
     Non-cash equity in net
      loss of affiliate              -        6,199        4,445        6,938
     Non-cash loss from
      redemption of debt             -            -            -          712
     Loss on disposal of
      assets                       772          742        1,661        1,028
     Impairment loss                 -            -       10,917            -
     Stock-based
      compensation              42,625       46,196      437,918      163,078
     Deferred income taxes         156          631        2,065        2,311
     Changes in operating
      assets and liabilities:
     Marketable securities           -            -            -           16
     Accounts receivable        (8,724)     (18,985)          (14)    (28,440)
     Inventory                  10,477         (916)      (20,246)     (6,329)
     Prepaid expenses and
      other current assets     (28,115)     (14,516)      (62,679)    (29,129)
     Other long-term assets      2,343        3,760       (19,331)      6,476
     Accounts payable and
      accrued expenses         102,299      108,721        33,519     145,052
     Accrued interest           11,699       11,472         1,239      17,813
     Deferred revenue          105,334      129,142       181,003     210,947
     Other long-term
      liabilities               11,503           17         3,452      (3,505)
     Net cash provided by
      (used in) operating
       activities               34,868      (12,190)     (414,549)   (269,994)
    Cash flows from
     investing activities:
     Additions to property
      and equipment             (5,459)     (31,939)      (99,827)    (49,888)
     Sales of property and
      equipment                      4            7           127          72
     Purchases of restricted
      and other
      investments                    -      (18,422)      (12,339)    (25,037)
     Release of restricted
      investments                1,000            -        26,000      10,997
     Purchases of
      available-for-sale
      securities                (5,000)     (20,200)     (123,500)   (148,900)
     Sales of
      available-for-sale
      securities                28,375       27,000       229,715      36,935
     Net cash provided by
      (used in)
      investing activities      18,920      (43,554)       20,176    (175,821)
    Cash flows from
     financing activities:
     Proceeds from issuance
      of long-term debt, net         -            -             -     493,005
     Redemption of debt              -            -             -     (57,609)
     Proceeds from exercise
      of stock options          21,757        7,418        25,787      18,543
     Other                           -            -             -          (8)
      Net cash provided by
       financing activities     21,757        7,418        25,787     453,931
    Net increase (decrease)
     in cash and cash
    equivalents                 75,545      (48,326)     (368,586)      8,116
    Cash and cash equivalents
     at the beginning of
     period                    317,876      810,333       762,007     753,891
    Cash and cash equivalents
     at the end of period     $393,421     $762,007      $393,421    $762,007



    FOOTNOTES TO PRESS RELEASE AND TABLES FOR NON-GAAP FINANCIAL MEASURES

This press release, including the selected financial information above, includes the following non-GAAP financial measures: free cash flow; average monthly churn; SAC per gross subscriber addition; customer service and billing expenses per average subscriber; average monthly revenue per subscriber, or ARPU; adjusted loss from operations; adjusted net loss; and adjusted net loss per share. The definitions and usefulness of such non-GAAP financial measures are as follows (dollars in thousands, unless otherwise stated):

    (1) SIRIUS defines free cash flow as cash flow from operating activities,
        capital expenditures and restricted and other investment activity.
        Free cash flow is calculated as follows:


                                For the Three Months      For the Years
                                 Ended December 31,      Ended December 31,
                                  2006       2005        2006         2005

    Net cash provided by (used
     in) operating activities   $34,868   $(12,190)   $(414,549)   $(269,994)
    Additions to property and
     equipment                   (5,459)   (31,939)     (99,827)     (49,888)
    Restricted and other
     investment activity          1,000    (18,422)      13,661      (14,040)

    Free cash flow              $30,409   $(62,551)   $(500,715)   $(333,922)


    (2) SIRIUS defines average monthly churn as the number of deactivated
        subscribers divided by average quarterly subscribers.
    (3) SIRIUS defines SAC per gross subscriber addition as subscriber
        acquisition costs, excluding stock-based compensation, and margins
        from the direct sale of SIRIUS radios and accessories divided by the
        number of gross subscriber additions for the period. SAC per gross
        subscriber addition is calculated as follows:


                                For the Three Months      For the Years
                                 Ended December 31,      Ended December 31,
                                  2006       2005        2006         2005
    Subscriber acquisition
     costs                     $122,196    $163,774    $451,614    $399,350
    Less: stock-based
     compensation                (1,150)    (18,594)    (31,898)    (49,709)
    Add: margins from direct
     sale of SIRIUS radios and
    accessories                   5,674      (1,525)      8,435        (444)
    SAC                        $126,720    $143,655    $428,151    $349,197
                              1,234,576   1,266,674   3,758,163   2,519,301
    Gross subscriber additions
    SAC per gross subscriber
     addition                      $103        $113        $114        $139

    (4) SIRIUS defines customer service and billing expenses per average
        subscriber as total customer service and billing expenses, excluding
        stock-based compensation, divided by the daily weighted average number
        of subscribers for the period.
    (5) SIRIUS defines ARPU as the total earned subscriber revenue and net
        advertising revenue divided by the daily weighted average number of
        subscribers for the period. ARPU is calculated as follows:


                                For the Three Months      For the Years
                                 Ended December 31,      Ended December 31,
                                  2006       2005        2006         2005

    Subscriber revenue         $167,210    $67,816     $575,404     $223,615
    Net advertising revenue       8,451      3,037       31,044        6,131
    Total subscriber and net
     advertising revenue       $175,661    $70,853     $606,448     $229,746
    Daily weighted
     average number
     of subscribers           5,361,322  2,505,580    4,591,693    1,851,149
    ARPU                         $10.92      $9.42       $11.01       $10.34


    (6) SIRIUS believes free cash flow; average monthly churn; SAC per gross
        subscriber addition; customer service and billing expenses per average
        subscriber; and ARPU provide meaningful supplemental information
        regarding operating performance and liquidity and are used for
        internal management purposes; when publicly providing the business
        outlook; as a means to evaluate period-to-period comparisons; and to
        compare the company's performance to that of its competitors.  SIRIUS
        also believes that investors use current and projected metrics to
        monitor performance of the business and make investment decisions.

        SIRIUS believes the exclusion of stock-based compensation expense in
        the calculations of SAC per gross subscriber addition and customer
        service and billing expenses per average subscriber is useful given
        the significant variation in expense that can result from changes in
        the fair market value of SIRIUS common stock, the effect of which is
        unrelated to the operational conditions that give rise to variations
        in the components of subscriber acquisition costs and customer service
        and billing expenses. Specifically, the exclusion of stock-based
        compensation expense in the calculation of SAC per gross subscriber
        addition is critical in being able to understand the economic impact
        of the direct costs incurred to acquire a subscriber and the effect
        over time as economies of scale are reached.

        These non-GAAP financial measures are used in addition to and in
        conjunction with results presented in accordance with GAAP. These non-
        GAAP financial measures may be susceptible to varying calculations;
        may not be comparable to other similarly titled measures of other
        companies; and should not be considered in isolation, as a substitute
        for, or superior to measures of financial performance prepared in
        accordance with GAAP.

    (7) SIRIUS refers to net loss before taxes; other income (expense) -
        including interest and investment income, interest expense, loss from
        redemption of debt and equity in net loss of affiliate; depreciation;
        impairment charges; and stock-based compensation expense as adjusted
        loss from operations.  Adjusted loss from operations is not a measure
        of financial performance under GAAP.  The company believes adjusted
        loss from operations is a useful measure of its operating performance.
        The company uses adjusted loss from operations for budgetary and
        planning purposes; to assess the relative profitability and on-going
        performance of consolidated operations; to compare performance from
        period to period; and to compare performance to that of its
        competitors.  The company also believes adjusted loss from operations
        is useful to investors to compare operating performance to the
        performance of other communications, entertainment and media
        companies. The company believes that investors use current and
        projected adjusted loss from operations to estimate the current or
        prospective enterprise value and make investment decisions.

        Because the company funds and builds-out its satellite radio system
        through the periodic raising and expenditure of large amounts of
        capital, results of operations reflect significant charges for
        interest and depreciation expense.  The company believes adjusted loss
        from operations provides useful information about the operating
        performance of the business apart from the costs associated with the
        capital structure and physical plant.  The exclusion of interest
        expense and depreciation is useful given fluctuations in interest
        rates and significant variation in depreciation expense that can
        result from the amount and timing of capital expenditures and
        potential variations in estimated useful lives, all of which can vary
        widely across different industries or among companies within the same
        industry. The company believes the exclusion of taxes is appropriate
        for comparability purposes as the tax positions of companies can vary
        because of their differing abilities to take advantage of tax benefits
        and because of the tax policies of the various jurisdictions in which
        they operate.  The company also believes the exclusion of stock-based
        compensation expense is useful given the significant variation in
        expense that can result from changes in the fair market value of the
        company's common stock.  Finally, the company believes that the
        exclusion of equity in net loss of affiliate (SIRIUS Canada Inc.) is
        useful to assess the performance of its core consolidated operations
        in the continental United States. To compensate for the exclusion of
        taxes, other income (expense), depreciation, impairment charges and
        stock-based compensation expense, the company separately measures and
        budgets for these items.

        There are material limitations associated with the use of adjusted
        loss from operations in evaluating the company compared with net loss,
        which reflects overall financial performance, including the effects of
        taxes, other income (expense), depreciation, impairment charges and
        stock-based compensation expense. The company uses adjusted loss from
        operations to supplement GAAP results to provide a more complete
        understanding of the factors and trends affecting the business than
        GAAP results alone. Investors that wish to compare and evaluate the
        operating results after giving effect for these costs, should refer to
        net loss as disclosed in the unaudited consolidated statements of
        operations. Since adjusted loss from operations is a non-GAAP
        financial measure, the calculation of adjusted loss from operations
        may be susceptible to varying calculations; may not be comparable to
        other similarly titled measures of other companies; and should not be
        considered in isolation, as a substitute for, or superior to measures
        of financial performance prepared in accordance with GAAP.

    (8) SIRIUS refers to adjusted net loss and adjusted net loss per share as
        net loss and net loss per share excluding impairment charges and
        stock-based compensation expense.  Adjusted net loss and adjusted net
        loss per share are not measures of financial performance under GAAP.
        The company believes adjusted net loss and adjusted net loss per share
        are useful to investors to compare its operating performance to the
        performance of other communications, entertainment and media
        companies.  The company believes the exclusion of impairment charges
        is appropriate for comparability purposes as the existence, amount and
        timing of impairment charges can vary period to period and can vary
        widely across different industries or among companies within the same
        industry. The company also believes the exclusion of stock-based
        compensation expense is useful given the significant variation in
        expense that can result from changes in the fair market value of the
        company's common stock.

        There are material limitations associated with the use of adjusted net
        loss and adjusted net loss per share in evaluating the company
        compared with net loss and net loss per share, which reflects overall
        financial performance, including the effects of impairment charges and
        stock-based compensation expense. The company uses adjusted net loss
        and adjusted net loss per share to supplement GAAP results to provide
        a more complete understanding of the factors and trends affecting the
        business than GAAP results alone. Investors that wish to compare and
        evaluate the operating results after giving effect for these costs,
        should refer to net loss and net loss per share as disclosed in the
        unaudited consolidated statements of operations. Since adjusted net
        loss and adjusted net loss per share are non-GAAP financial measures,
        the calculation of adjusted net loss and adjusted net loss per share
        may be susceptible to varying calculations; may not be comparable to
        other similarly titled measures of other companies; and should not be
        considered in isolation, as a substitute for, or superior to measures
        of financial performance prepared in accordance with GAAP.

    About SIRIUS

SIRIUS, "The Best Radio on Radio," delivers more than 130 channels of the best programming in all of radio. SIRIUS is the original and only home of 100% commercial free music channels in satellite radio, offering 69 music channels. SIRIUS also delivers 65 channels of sports, news, talk, entertainment, traffic, weather and data. SIRIUS is the Official Satellite Radio Partner of the NFL, NASCAR, NBA and NHL, and broadcasts live play-by- play games of the NFL, NBA and NHL, as well as live NASCAR races. All SIRIUS programming is available for a monthly subscription fee of only $12.95.

SIRIUS Internet Radio (SIR) is a CD-quality, Internet-only version of the SIRIUS radio service, without the use of a radio, for the monthly subscription fee of $12.95. SIR delivers more than 75 channels of talk, entertainment, sports, and 100% commercial free music.

SIRIUS products for the car, truck, home, RV and boat are available in more than 25,000 retail locations, including Best Buy, Circuit City, Crutchfield, Costco, Target, Wal-Mart, Sam's Club, RadioShack and at shop.sirius.com.

SIRIUS radios are offered in vehicles from Audi, Bentley, BMW, Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep(R), Land Rover, Lexus, Lincoln, Mercury, Maybach, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan, Rolls Royce, Scion, Toyota, Volkswagen, and Volvo. Hertz also offers SIRIUS in its rental cars at major locations around the country.

Click on www.sirius.comto listen to SIRIUS live, or to purchase a SIRIUS radio and subscription.

Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, future events or performance with respect to SIRIUS Satellite Radio Inc. are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2005 and Quarterly Reports on Form 10-Q for the quarters ended June 30, 2006 and September 30, 2006 filed with the Securities and Exchange Commission. Among the key factors that have a direct bearing on our operational results are: our dependence upon third parties, including manufacturers of SIRIUS radios, retailers, automakers and programming partners, our competitive position and any events which affect the useful life of our satellites.

    E-SIRI

    Contact Information for Investors and Financial Media:

     Paul Blalock
     SIRIUS
     212.584.5174
     pblalock@siriusradio.com

     Hooper Stevens
     SIRIUS
     212.901.6718
     hstevens@siriusradio.com

SOURCE SIRIUS Satellite Radio

Paul Blalock, +1-212-584-5174, pblalock@siriusradio.com, or Hooper Stevens,
+1-212-901-6718, hstevens@siriusradio.com, both of SIRIUS
http://www.sirius.com

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