Investor Relations

SIRIUS XM Radio Reports Second Quarter 2009 Results

- Adjusted Income from Operations of $132 Million - An Improvement of $193 Million Year Over Year
- Pro Forma Total Revenue of $608 Million, Up 1%
- EPS Excluding Charges ($0.01) vs. ($0.06) Year Over Year, In-line with Wall Street Estimates
- Company Increases Full-year Guidance for Adjusted Income from Operations to Over $400 Million From Over $350 Million

NEW YORK, Aug 06, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- SIRIUS XM Radio (Nasdaq: SIRI) today announced second quarter 2009 financial and operating results, including $132 million in adjusted income from operations, marking the company's third consecutive quarter of positive adjusted income. The company also announced a 28% decrease in total cash operating expenses since the merger of SIRIUS and XM one year ago. SIRIUS XM also increased its full-year 2009 guidance for adjusted income from operations to over $400 million from over $350 million.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080819/NYTU044LOGO )

"Just one year ago, combined operations produced negative adjusted income from operations of $61 million," said Mel Karmazin, SIRIUS XM's CEO. "This year our revenue increase in the second quarter, paired with a $187 million expense reduction, drove an improvement of approximately $193 million in adjusted income from operations to $132 million in second quarter 2009. Based on these results we are increasing guidance again and expect to exceed over $400 million in adjusted income from operations during 2009. Growing our revenue in the face of broad declines in the advertising and automotive markets is a remarkable accomplishment, and we are well positioned for a rebound in auto sales."

Second quarter 2009 pro forma total revenue was $608 million, up 1% from second quarter 2008 pro forma total revenue of $601 million. Second quarter 2009 subscription revenue was $577 million, up 3% from the second quarter 2008 subscription revenue of $558 million. Subscriber acquisition cost (SAC) per gross subscriber addition was $57 in the second quarter 2009, an improvement of 20% over the $71 in pro forma SAC per gross subscriber addition in the second quarter 2008.

SIRIUS XM ended the second quarter 2009 with 18,413,435 total subscribers, a decrease of 1% from the second quarter 2008 pro forma total subscribers of 18,576,830 and a decrease of 185,999 from the first quarter 2009 subscribers of 18,599,434. Self-pay subscribers were 15,421,414 in second quarter 2009, virtually unchanged from first quarter 2009 self-pay subscribers of 15,436,410 and up 592,264, or 4%, from the 14,829,150 self-pay subscribers in the second quarter 2008. Promotional subscribers were 2,992,021 in second quarter 2009.

Monthly average revenue per subscriber (ARPU) was $10.66 in the second quarter 2009, up from $10.55 in the second quarter 2008. The pro forma self-pay monthly customer churn rate was 2.0% in the second quarter 2009 down from 2.2% in the first quarter 2009, and up from 1.7% in second quarter 2008 pro forma self-pay churn.

In the second quarter 2009, SIRIUS XM achieved positive pro forma adjusted income from operations of $132 million as compared to a pro forma loss from operations of ($61) million in the second quarter 2008. The second quarter 2009 US GAAP net loss was ($157) million, or ($0.04) per share, and includes $108 million, or ($0.03) per share, in net charges for the loss on the extinguishment of debt and credit facilities and a $24 million write-off, or ($.007) per share, of prepayments for future launch services attributable to the counterparty's bankruptcy filing. Absent these charges, the US GAAP net loss per share of ($0.01) was in line with Wall Street estimates. In the second quarter 2008 the US GAAP net loss was ($84) million, or ($0.06) per share. Second quarter 2009 free cash flow was $13 million compared to ($169) million of free cash flow in the second quarter 2008.

2009 OUTLOOK

SIRIUS XM now expects to achieve over $400 million in 2009 adjusted income from operations. This is an increase from the company's previous guidance of over $350 million in 2009 adjusted income from operations provided on May 7, 2009.

BALANCE SHEET IMPROVEMENTS

During the second quarter the company made improvements to its balance sheet including refinancing some of its debt at lower rates, extending maturities, and improving amortization schedules and covenants.

"These transactions have significantly improved the credit profile of the company, and we intend to be opportunistic in pursuing additional balance sheet improvements," said David Frear, SIRIUS XM's EVP and CFO.

Based upon the company's current plans, it has sufficient cash, cash equivalents, available borrowings under credit facilities and marketable securities to cover the company's estimated funding needs through cash flow breakeven, the point at which revenues are sufficient to fund expected operating expenses, capital expenditures, working capital requirements, interest payments and taxes. The company's projections are based on assumptions, which it believes are reasonable but contain uncertainties.

PRO FORMA RESULTS OF OPERATIONS

The discussion of operating results below is based upon pro forma comparisons as if the merger of SIRIUS and XM occurred on January 1, 2008 and excludes the effects of stock-based compensation and purchase accounting adjustments.

SECOND QUARTER 2009 VERSUS SECOND QUARTER 2008

For the second quarter of 2009, SIRIUS XM recognized total pro forma revenue of $608 million compared to $601 million for the second quarter 2008. This 1%, or $7 million, increase in revenue was driven by a 1% growth in weighted average subscribers from the second quarter 2008 as well as an increase in ARPU.

Total ARPU for the three months ended June 30, 2009 was $10.66, compared to $10.55 for the three months ended June 30, 2008. The increase was driven mainly by the sale of "Best of" programming, increased rates on the company's multi-subscription packages and revenues earned on the company's internet packages, partially offset by a decline in net advertising revenue per average subscriber.

In the second quarter 2009, the company achieved positive pro forma adjusted income from operations of $132 million, compared to an adjusted loss from operations of ($61) million for the second quarter of 2008 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). The improvement was driven by the increase in total revenue of $7 million and a $187 million decrease, or 28%, in expenses included in adjusted income (loss) from operations.

Satellite and transmission costs decreased 27%, or $7 million, in the three months ended June 30, 2009 compared to the same period in 2008 due to reductions in maintenance costs, repeater lease expense, and personnel costs.

Programming and content costs decreased 14%, or $14 million, in the three months ended June 30, 2009 compared to the same period in 2008, mainly due to reductions in personnel and on-air talent costs as well as savings on certain content agreements.

Revenue share and royalties decreased by 5%, or $6 million, compared to the same period in 2008.

Customer service and billing costs remained relatively flat for the three months ended June 30, 2009 compared to the same period in 2008.

Cost of equipment decreased by 49%, or $8 million, in the three months ended June 30, 2009 compared to the same period in 2008 as a result of a decrease in the company's direct to customer sales and lower inventory write-downs.

Sales and marketing costs decreased 53%, or $55 million, and have decreased as a percentage of revenue to 8% from 17% in the three months ended June 30, 2009 compared to the same period in 2008. The decrease in Sales and marketing costs was due to reduced advertising and cooperative marketing spend, as well as, reductions to personnel costs and third party distribution support expenses.

Subscriber acquisition costs decreased 46%, or $70 million, and decreased as a percentage of revenue to 13% from 25% in the three months ended June 30, 2009 compared to the same period in 2008. SAC per gross addition declined by 20% to $57 from $71 in the year ago period. This improvement was driven by fewer OEM installations relative to gross subscriber additions, decreased production of certain radios, lower OEM subsidies and lower aftermarket inventory reserves as compared to the three months ended June 30, 2008. Subscriber acquisition costs also decreased as a result of the 35% decline in gross additions during the three months ended June 30, 2009 compared to the three months ended June 30, 2008.

General and administrative costs decreased 33%, or $22 million, mainly due to the absence of certain legal and regulatory charges incurred in 2008 and lower personnel costs.

Engineering, design and development costs decreased 35%, or $6 million, in the three months ended June 30, 2009 compared to the same period in 2008, due to lower costs associated with the manufacturing of radios, OEM tooling and manufacturing, and personnel.

Restructuring, impairments and related costs increased $27 million mainly due to a loss of $24 million on capitalized installment payments for the launch of a satellite, which are expected to provide no future benefits due to the counterparty's bankruptcy filing.

Other expenses increased 285%, or $147 million, in the three months ended June 30, 2009 compared to the same period in 2008 driven mainly by the loss on extinguishment of debt and credit facilities of $108 million, and an increase in interest expense of $53 million, offset by an increase of $13 million in gain on investments. The loss on the extinguishment of debt and credit facilities was incurred on the full repayment of XM's Amended and Restated Credit Agreement and its Second-Lien Credit Agreement. Interest expense increased due primarily to the issuance of XM's 13% Senior Notes due 2013 and the 7% Exchangeable Senior Subordinated Notes due 2014 in the third quarter of 2008.

SIX MONTHS ENDED JUNE 30, 2009 VERSUS SIX MONTHS ENDED JUNE 30, 2008

For the six months ended June 30, 2009, SIRIUS XM recognized total pro forma revenue of $1,213 million compared with $1,180 million for the six months ended June 30, 2008. This 3%, or $33 million, increase in revenue was primarily driven by an increase in subscriber revenue resulting primarily from a 4% growth in weighted average subscribers over the period as well as revenues from the sale of "Best of" programming, increased rates on the company's multi-subscription packages and revenues earned on the company's internet packages.

Total ARPU for the six months ended June 30, 2009 was $10.57, compared to $10.54 for the six months ended June 30, 2008. The increase was driven mainly by the sale of "Best of" programming, increased rates on the company's multi-subscription packages and revenues earned on its internet packages, partially offset by a decline in net advertising revenue per average subscriber.

The company's pro forma adjusted income from operations increased $372 million to $241 million for the six months ended June 30, 2009 from a loss of ($131) million for the six months ended June 30, 2008 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). This increase was driven by a 3%, or $33 million, increase in revenue and a 26%, or $339 million, decrease in expenses included in adjusted income (loss) from operations.

Satellite and transmission costs decreased 25%, or $13 million, in the six months ended June 30, 2009 compared to the same period in 2008 due to reductions in maintenance costs, repeater lease expense, and personnel costs.

Programming and content costs decreased 12%, or $25 million, in the six months ended June 30, 2009 compared to the same period in 2008, due mainly to reductions in personnel and on-air talent costs as well as savings on certain content agreements.

Revenue share and royalties increased by 2%, or $4 million, while declining slightly as a percentage of revenue in the six months ended June 30, 2009 compared to the same period in 2008.

Customer service and billing costs remained relatively flat for the six months ended June 30, 2009 compared to the same period in 2008 due to scale efficiencies over a larger daily weighted average subscriber base.

Cost of equipment decreased by 50%, or $16 million, in the six months ended June 30, 2009 compared to the same period in 2008 as a result of a decrease in the company's direct to customer sales and lower inventory write-downs.

Sales and marketing costs decreased 46%, or $83 million, and decreased as a percentage of revenue to 8% from 15% in the six months ended June 30, 2009 compared to the same period in 2008 due to reduced advertising and cooperative marketing spend as well as reductions to personnel costs and third party distribution support expenses.

Subscriber acquisition costs decreased 47%, or $147 million, and decreased as a percentage of revenue to 14% from 26% in the six months ended June 30, 2009 compared to the same period in 2008. This decrease was driven by a 23% improvement in SAC, as adjusted, per gross addition due to fewer OEM installations relative to gross subscriber additions, decreased production of certain radios, lower OEM subsidies and lower aftermarket inventory reserves in the six months ended June 30, 2009 as compared to the six months ended June 30, 2008. Subscriber acquisition costs also decreased as a result of the 35% decline in gross additions during the six months ended June 30, 2009.

General and administrative costs decreased 32%, or $45 million, mainly due to the absence of certain legal and regulatory charges incurred in 2008 and lower personnel costs.

Engineering, design and development costs decreased 42%, or $13 million, in the six months ended June 30, 2009 compared to the same period in 2008, due to lower costs associated with the manufacturing of radios, OEM tooling and manufacturing, and personnel.

Restructuring, impairments and related costs increased $28 million mainly due to a loss of $24 million on capitalized installment payments, which are expected to provide no future benefits due to the counterparty's bankruptcy filing, for the launch of a satellite.

Other expenses increased 190%, or $194 million, in the six months ended June 30, 2009 compared to the same period in 2008 driven mainly by the loss on extinguishment of debt and credit facilities of $126 million, and an increase in interest expense of $79 million, offset by an increase of $9 million in gain on investments. The loss on the extinguishment of debt and credit facilities was incurred on the full repayment of XM's Amended and Restated Credit Agreement and its Second-Lien Credit Agreement. Interest expense increased due primarily to the issuance of XM's 13% Senior Notes due 2013 and the 7% Exchangeable Senior Subordinated Notes due 2014 in the third quarter of 2008.



                                                 Unaudited
                                   ---------------------------------------
                                  Three Months Ended       Six Months Ended
                                       June 30,                June 30,
                                ---------------------    --------------------
                                2009             2008     2009          2008
                                ----            -----     ----          ----
                               (Actual)    (Pro Forma)   (Actual)  (Pro Forma)

    Beginning subscribers      18,599,434  17,974,531  19,003,856  17,348,622
    Gross subscriber additions  1,380,125   2,111,655   2,719,086   4,153,311
    Deactivated subscribers    (1,566,124) (1,509,356) (3,309,507) (2,925,103)
                               ----------  ----------  ----------  ----------
    Net additions                (185,999)    602,299    (590,421)  1,228,208
                               ----------  ----------  ----------  ----------
    Ending subscribers         18,413,435  18,576,830  18,413,435  18,576,830
                               ==========  ==========  ==========  ==========

     Retail                     8,235,761   9,185,837   8,235,761   9,185,837
     OEM                       10,081,514   9,285,488  10,081,514   9,285,488
     Rental                        96,160     105,505      96,160     105,505
                               ----------  ----------  ----------  ----------
    Ending subscribers         18,413,435  18,576,830  18,413,435  18,576,830
                               ==========  ==========  ==========  ==========

     Retail                      (301,295)     (4,090)   (669,326)    (52,878)
     OEM                          123,165     593,169      85,561   1,252,220
     Rental                        (7,869)     13,220      (6,656)     28,866
                               ----------  ----------  ----------  ----------
    Net additions                (185,999)    602,299    (590,421)  1,228,208
                               ==========  ==========  ==========  ==========

     Self-pay                  15,421,414  14,829,150  15,421,414  14,829,150
     Paid promotional           2,992,021   3,747,680   2,992,021   3,747,680
                               ----------  ----------  ----------  ----------
    Ending subscribers         18,413,435  18,576,830  18,413,435  18,576,830
                               ==========  ==========  ==========  ==========

     Self-pay                     (14,996)    515,744    (128,243)    955,804
     Paid promotional            (171,003)     86,555    (462,178)    272,404
                               ----------  ----------  ----------  ----------
    Net additions                (185,999)    602,299    (590,421)  1,228,208
                               ==========  ==========  ==========  ==========

    Daily weighted average
     number of subscribers     18,438,473  18,240,018  18,575,219  17,931,515
                               ==========  ==========  ==========  ==========


                                             Unaudited Pro Forma
                                  -------------------------------------------
                                  Three Months Ended       Six Months Ended
                                       June 30,                June 30,
                                  ------------------     --------------------
                                  2009          2008      2009          2008

    Average self-pay
     monthly churn (1)(7)             2.0%        1.7%        2.1%        1.8%
    Conversion rate (2)(7)           44.4%       50.6%       44.7%       50.8%
    ARPU (3)(7)                    $10.66      $10.55      $10.57      $10.54
    SAC, as adjusted,
     per gross subscriber
     addition (4)(7)                  $57         $71         $59         $77
    Customer service and
     Billing expenses, as
      adjusted, per average
        subscriber (5)(7)           $1.05       $1.06       $1.06       $1.10
    Total revenue                $607,836    $601,052  $1,213,317  $1,179,857
    Free cash flow (6)(7)         $12,694   $(168,955)     $9,048   $(480,054)
    Adjusted income (loss)
     From operations (8)         $132,219    $(61,118)   $241,055   $(131,273)
    Net loss                    $(171,280)  $(203,471)  $(234,155)  $(436,858)



                                                Unaudited Pro Forma
                                                -------------------
                                  Three Months Ended        Six Months Ended
                                       June 30,                 June 30,
                                  ------------------       ------------------
    (in thousands)                2009          2008        2009        2008
                                  ----          ----        ----        ----

    Revenue:
     Subscriber revenue,
      including effects of
       rebates                   $576,958    $558,290  $1,153,034  $1,097,345
     Advertising revenue, net of
      agency fees                  12,564      18,764      24,869      36,290
     Equipment revenue             10,928      15,447      20,837      25,831
     Other revenue                  7,386       8,551      14,577      20,391
                                ---------   ---------   ---------   ---------
    Total revenue                 607,836     601,052   1,213,317   1,179,857

    Operating expenses:
     Satellite and transmission    18,659      25,467      38,401      51,202
     Programming and content       87,707     101,871     184,386     209,793
     Revenue share and royalties  117,671     123,309     238,932     234,451
     Customer service and billing  58,054      58,236     117,723     118,302
     Cost of equipment              8,051      15,702      16,044      31,840
     Sales and marketing           48,610     103,326      99,212     182,403
     Subscriber acquisition costs  80,988     150,585     164,698     311,919
     General and administrative    45,754      67,980      94,331     139,460
     Engineering, design and
      development                  10,123      15,694      18,535      31,760
     Depreciation and
      amortization                 46,118      59,551      97,599     131,940
     Share-based payment expense   31,003      30,098      52,501      69,864
     Restructuring, impairments
      and related costs            27,000           -      27,614           -
                                ---------   ---------   ---------   ---------
    Total operating expenses      579,738     751,819   1,149,976   1,512,934
                                ---------   ---------   ---------   ---------
    Income (loss) from
      operations                   28,098    (150,767)     63,341    (333,077)
     Other expense               (198,263)    (51,488)   (295,267)   (101,691)
                                ---------   ---------   ---------   ---------
    Loss before
     income taxes                (170,165)   (202,255)   (231,926)   (434,768)
     Income tax expense            (1,115)     (1,216)     (2,229)     (2,090)

    Net loss                    $(171,280)  $(203,471)  $(234,155)  $(436,858)
                                =========   ==========  ==========  ==========



                                                   Actual
                                                   ------
                                  For the Three Months   For the Six Months
                                     Ended June 30,         Ended June 30,
                                  --------------------   ------------------
    (in thousands, except per
     share data)                  2009          2008        2009        2008
                                  ----          ----        ----        ----

    Revenue:
     Subscriber revenue,
      including effects of
       rebates                   $561,763    $266,518  $1,121,151    $522,158
     Advertising revenue, net of
      agency fees                  12,564       8,332      24,869      16,740
     Equipment revenue             10,928       7,956      20,837      14,019
     Other revenue                  5,574         211      10,951         450
                                ---------   ---------   ---------    ---------
    Total revenue                 590,829     283,017   1,177,808     553,367
    Operating expenses
    (depreciation and
     amortization shown
      separately below) (1):
     Cost of services:
      Satellite and transmission   19,615       7,451      39,894      15,275
      Programming and content      72,102      55,247     152,511     116,939
      Revenue share and royalties  95,831      49,723     196,297      92,043
      Customer service and billing 58,833      22,865     119,041      49,786
      Cost of equipment             8,051       6,647      16,044      14,234
      Sales and  marketing         48,693      49,133     100,116      87,598
      Subscriber acquisition costs 67,651      81,392     140,719     171,216
      General and administrative   66,716      42,467     126,031      91,246
      Engineering, design and
       development                 11,944       9,028      21,723      17,684
      Depreciation and
       amortization                77,158      27,113     159,524      54,019

      Restructuring, impairments
       and related costs           27,000           -      27,614           -
                                 --------   ---------   ---------   ---------
    Total operating expenses      553,594     351,066   1,099,514     710,040
                                 --------   ---------   ---------   ---------
     Income (loss) from
      operations                   37,235     (68,049)     78,294    (156,673)
    Other income (expense):
     Interest and investment income   901       1,425       1,641       4,227
     Interest expense, net of
      amounts capitalized         (95,794)    (16,745)   (161,535)    (34,421)
     Loss on extinguishment
      of debt and credit
       facilities, net           (107,756)          -    (125,713)          -
     Gain on investments            8,422           -         516           -
     Other income (expense)           749          13       1,259         (64)
                                 --------   ---------   ---------   ---------
    Total other expense          (193,478)    (15,307)   (283,832)    (30,258)
                                 --------   ---------   ---------   ---------
    Loss before income taxes     (156,243)    (83,356)   (205,538)   (186,931)
     Income tax expense            (1,115)       (543)     (2,229)     (1,086)

       Net loss                  (157,358)    (83,899)   (207,767)   (188,017)
     Preferred stock beneficial
      conversion feature                -           -    (186,188)          -
                                ---------   ---------   ---------   ---------
     Net loss attributable to
      common stockholders       $(157,358)   $(83,899)  $(393,955)  $(188,017)
                                =========   =========   =========   =========
    Net loss per common share
     (basic and diluted)           $(0.04)     $(0.06)     $(0.11)     $(0.13)
                                =========   =========   =========   =========
    Weighted average common shares
     outstanding
    (basic and diluted)         3,586,742   1,499,723   3,555,489   1,487,610
                                =========   =========   =========   =========



    (1) Amounts related to share-based payment expense included in operating
        expenses were as follows:

    Satellite and transmission          $1,177      $759    $1,934    $1,555
    Programming and content              1,891     1,160     4,381     3,949
    Customer service and billing           779       265     1,318       541
    Sales and marketing                  3,072     2,464     7,358     7,704
    Subscriber acquisition costs             -         -         -        14
    General and administrative          20,961    11,457    31,699    23,455
    Engineering, design and
     development                         1,821     1,046     3,188     2,195

    Total share-based payment expense  $29,701   $17,151   $49,878   $39,413
                                       =======   =======   =======   =======




                                                     June 30,     December 31,
                                                       2009          2008
                                                     ---------    -----------
    (in thousands, except share and per share data)  (Unaudited)

                              ASSETS
    Current assets:
     Cash and cash equivalents                        $541,688      $380,446
     Accounts receivable, net of allowance
      for doubtful accounts of $10,313 and
      $10,860, respectively                             77,263       102,024
     Receivables from distributors                      33,673        45,950
     Inventory, net                                     27,886        24,462
     Prepaid expenses                                  120,273        67,203
     Related party current assets                      108,527       114,177
     Other current assets                               57,613        58,744
                                                        ------        ------
     Total current assets                              966,923       793,006
    Property and equipment, net                      1,690,864     1,703,476
    FCC licenses                                     2,083,654     2,083,654
    Restricted investments                               3,400       141,250
    Deferred financing fees, net                        63,279        40,156
    Intangible assets, net                             647,936       688,671
    Goodwill                                         1,834,856     1,834,856
    Related party long-term assets                     118,628       124,607
    Other long-term assets                              97,792        81,019
                                                        ------        ------
     Total assets                                   $7,507,332    $7,490,695
                                                    ==========    ==========
        LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
     Accounts payable and accrued expenses            $512,581      $642,820
     Accrued interest                                   73,134        76,463
     Current portion of deferred revenue               995,696       985,180
     Current portion of deferred credit on
      executory contracts                              244,116       234,774
     Current maturities of long-term debt              286,045       399,726
     Current maturities of long-term
      related party debt                                   787             -
     Related party current liabilities                  59,101        68,373
                                                        ------        ------
     Total current liabilities                       2,171,460     2,407,336
    Deferred revenue                                   284,798       247,889
    Deferred credit on executory
     contracts                                         918,678     1,037,190
    Long-term debt                                   2,807,271     2,851,740
    Long-term related party debt                       222,096             -
    Deferred tax liability                             900,273       894,453
    Related party long-term liabilities                 21,123             -
    Other long-term liabilities                         37,929        43,550
                                                        ------        ------
     Total liabilities                               7,363,628     7,482,158
                                                     ---------     ---------

    Commitments and contingencies
    Stockholders' equity:
     Preferred stock, par value $0.001; 50,000,000
     authorized at June 30, 2009 and December 31, 2008:
     Series A convertible preferred stock (liquidation
     preference of $51,370 at June 30, 2009 and
     December 31, 2008); 24,808,959 shares issued and
     outstanding at June 30, 2009 and December 31, 2008     25            25
    Convertible perpetual preferred stock, series B
     (liquidation preference of $13 and $0 at June 30,
      2009 and December 31, 2008, respectively);
      12,500,000 and zero shares issued and outstanding
      at June 30, 2009 and December 31, 2008,
       respectively                                         13             -
    Convertible preferred stock, series C junior;
     no shares issued and outstanding at June 30, 2009
     and December 31, 2008                                   -             -
    Common stock, par value $0.001; 9,000,000,000
     and 8,000,000,000 shares authorized at
      June 30, 2009 and December 31, 2008,
       respectively; 3,883,905,655 and 3,651,765,837
       shares issued and outstanding at June 30,
       2009 and December 31, 2008, respectively           3,884        3,652
     Accumulated other comprehensive loss, net of tax    (6,986)      (7,871)
     Additional paid-in capital                      10,252,983    9,724,991
     Accumulated deficit                            (10,106,215)  (9,712,260)
                                                     ----------   ----------
     Total stockholders' equity                         143,704        8,537
                                                     ----------   ----------
     Total liabilities and stockholders' equity      $7,507,332   $7,490,695
                                                     ==========   ==========





                                                      For the Six Months
                                                        Ended June 30,
                                                 --------------------------
    (in thousands)                                   2009             2008
                                                     ----             ----

    Cash flows from operating activities:
     Net loss                                   $(207,767)       $(188,017)
     Adjustments to reconcile net loss to net
      cash provided by (used in) operating
      activities:
     Depreciation and amortization                159,524           54,019
     Non-cash interest expense, net of
      amortization of premium                      26,799            1,971
     Provision for doubtful accounts               16,278            5,048
     Loss on extinguishment of debt and credit
      facilities, net                             125,713                -
     Write-down of long-lived assets               27,614                -
     Amortization of deferred income related to
      equity method investment                     (1,388)               -
     Loss on investments                            6,353                -
     Share-based payment expense                   49,878           39,413
     Deferred income taxes                          2,229            1,086
     Other non-cash purchase price adjustments    (85,223)               -
     Changes in operating assets and liabilities:
     Accounts receivable                            8,483           11,834
     Inventory                                     (3,424)           5,921
     Receivables from distributors                 12,277          (11,102)
     Related party assets                          11,629                -
     Prepaid expenses and other current assets     24,052           14,594
     Other long-term assets                        34,476            5,399
     Accounts payable and accrued expenses       (106,041)         (97,463)
     Accrued interest                                 997               53
     Deferred revenue                              24,713           26,875
     Related party liabilities                     11,851                -
     Other long-term liabilities                   (2,164)            (712)
                                                  -------          -------
     Net cash provided by (used in) operating
      activities                                  136,859         (131,081)
                                                  -------          -------


    Cash flows from investing activities:
     Additions to property and equipment         (127,811)         (73,698)
     Purchases of restricted and other
      investments                                       -           (3,000)
     Merger-related costs                               -          (14,843)
     Sale of restricted and other investments           -            5,004
                                                        -            -----
     Net cash used in investing activities       (127,811)         (86,537)
                                                 --------          -------


    Cash flows from financing activities:
     Proceeds from exercise of warrants and
      stock options                                     -              181
     Preferred stock issuance costs, net           (3,712)               -
     Long-term borrowings, net                    384,876                -
     Related party long-term borrowings, net      316,340                -
     Payment of premiums on redemption of debt    (16,572)               -
     Repayment of long-term borrowings           (427,871)          (1,250)
     Repayment of related party long-term
      borrowings                                 (100,867)               -
                                                 --------                -
     Net cash provided by (used in) financing
      activities                                  152,194           (1,069)
                                                  -------           ------
    Net increase (decrease) in cash and cash
     equivalents                                  161,242         (218,687)
    Cash and cash equivalents at beginning of
     period                                       380,446          438,820
                                                  -------          -------
    Cash and cash equivalents at end of period   $541,688         $220,133
                                                 ========         ========


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

    (1)  Average self-pay monthly churn represents the monthly average of
         self-pay deactivations by the quarter divided by the average self-pay
         subscriber balance for the quarter.
    (2)  We measure the percentage of subscribers that receive our service
         and convert to self-paying after the initial promotion period. We
         refer to this as the "conversion rate." At the time of sale, vehicle
         owners generally receive between three and twelve month prepaid trial
         subscriptions and we receive a subscription fee from the OEM.
         Promotional periods generally include the period of trial service
         plus 30 days to handle the receipt and processing of payments. We
         measure conversion rate three months after the period in which the
         trial service ends. Based on our experience it may take up to 90
         days after the trial service ends for subscribers to respond to our
         marketing communications and become self-paying subscribers.
    (3)  ARPU is derived from total earned subscriber revenue and net
         advertising revenue, divided by the number of months in the period,
         divided by the daily weighted average number of subscribers for the
         period. ARPU is calculated as follows (in thousands, except for per
         subscriber amounts):


                                               Unaudited Pro Forma
                                    ---------------------------------------
                                    Three Months Ended    Six Months Ended
                                         June 30,            June 30,
                                    ------------------    -----------------
                                    2009        2008      2009         2008
                                    ----        ----      ----         ----

    Subscriber revenue            $576,958   $558,290 $1,153,034 $1,097,345
    Net advertising revenue         12,564     18,764     24,869     36,290
                                    ------     ------     ------     ------
     Total subscriber and net
      advertising revenue         $589,522   $577,054 $1,177,903 $1,133,635
                                  ========   ======== ========== ==========

    Daily weighted average
     number of subscribers      18,438,473 18,240,018 18,575,219 17,931,515
    ARPU                            $10.66     $10.55     $10.57     $10.54


    (4)  SAC, as adjusted, per gross subscriber addition is derived from
         subscriber acquisition costs and margins from the direct sale of
         radios and accessories, excluding share-based payment expense divided
         by the number of gross subscriber additions for the period. SAC, as
         adjusted, per gross subscriber addition is calculated as follows (in
         thousands, except for per subscriber amounts):



                                                Unaudited Pro Forma
                                               -------------------
                                    Three Months Ended    Six Months Ended
                                         June 30,             June 30,
                                    ------------------    ----------------
                                    2009        2008      2009        2008
                                    ----        ----      ----        ----

    Subscriber acquisition cost    $80,988   $150,585  $164,698   $311,933
    Less: share-based payment
     expense granted to third
      parties and employees              -          -         -        (14)
    Less/Add: margin from direct
     sales of radios
     and accessories                (2,877)       255    (4,793)     6,009
                                    ------        ---    ------      -----
    SAC, as adjusted               $78,111   $150,840  $159,905   $317,928
                                   =======   ========  ========   ========

    Gross subscriber additions   1,380,125  2,111,655 2,719,086  4,153,311
    SAC, as adjusted, per gross
     subscriber addition               $57        $71       $59        $77


    (5)  Customer service and billing expenses, as adjusted, per average
         subscriber is derived from total customer service and billing
         expenses, excluding share-based payment expense, divided by the
         number of months in the period, divided by the daily weighted average
         number of subscribers for the period. Customer service and billing
         expenses, as adjusted, per average subscriber is calculated as
         follows (in thousands, except for per subscriber amounts):




                                              Unaudited Pro Forma
                                              -------------------
                                    Three Months Ended     Six Months Ended
                                        June 30,               June 30,
                                    ------------------     ----------------
                                    2009        2008      2009        2008
                                    ----        ----      ----        ----

    Customer service
     and billing
     expenses                      $58,959    $59,253   $119,284    $120,484
    Less: share-based
     payment expense                  (905)    (1,017)    (1,561)     (2,182)
                                   -------    -------   --------    --------
    Customer service and billing
     expenses, as adjusted         $58,054    $58,236   $117,723    $118,302
                                   =======    =======   ========    ========

    Daily weighted average number
     of  subscribers            18,438,473 18,240,018 18,575,219  17,931,515
    Customer service and billing
     expenses, as adjusted,
     per average subscriber          $1.05      $1.06      $1.06       $1.10





    (6)  Free cash flow is calculated as follows:


                                              Unaudited Pro Forma
                                     ----------------------------------------
                                      Three Months Ended     Six Months Ended
                                          June 30,                June 30,
                                     ------------------      ----------------
                                      2009        2008       2009        2008
                                      ----        ----       ----        ----

    Net cash provided by (used in)
     operating activities            $69,988  $(119,107) $136,859  $(366,095)
    Additions to property and
     equipment                       (56,671)   (45,052) (127,811)  (101,145)
    Merger related costs                (623)    (4,825)        -    (14,843)
    Restricted and other investment
     activity                              -         29         -      2,029
                                           -         --         -      -----
    Free cash flow                   $12,694  $(168,955)   $9,048  $(480,054)
                                     =======  =========    ======  =========

    (7)  Average self-pay monthly churn; conversion rate; ARPU; SAC, as
         adjusted, per gross subscriber addition; customer service and billing
         expenses, as adjusted, per average subscriber; and free cash flow are
         not measures of financial performance under U.S. generally accepted
         accounting principles ("GAAP"). We believe these non-GAAP financial
         measures provide meaningful supplemental information regarding our
         operating performance and are used by us for budgetary and planning
         purposes; when publicly providing our business outlook; as a means to
         evaluate period-to-period comparisons; and to compare our performance
         to that of our competitors. We also believe that investors also use
         our current and projected metrics to monitor the performance of our
         business and to make investment decisions.

         We believe the exclusion of share-based payment expense in our
         calculations of SAC, as adjusted, per gross subscriber addition and
         customer service and billing expenses, as adjusted, per average
         subscriber is useful given the significant variation in expense that
         can result from changes in the fair market value of our common stock,
         the effect of which is unrelated to the operational conditions that
         give rise to variations in the components of our subscriber
         acquisition costs and customer service and billing expenses.
         Specifically, the exclusion of share-based payment expense in our
         calculation of SAC, as adjusted, 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.

    (8)  We refer to net loss before interest and investment income, interest
         expense net of amounts capitalized, income tax expense, loss from
         redemption of debt, loss on investments, other expense (income),
         restructuring, impairments and related costs, depreciation and
         amortization, and share related payment expense as adjusted income
        (loss) from operations. Adjusted income (loss) from operations is not
         a measure of financial performance under U.S. GAAP. We believe
         adjusted income (loss) from operations is a useful measure of our
         operating performance. We use adjusted income (loss) from operations
         for budgetary and planning purposes; to assess the relative
         profitability and on-going performance of our consolidated
         operations; to compare our performance from period-to-period; and to
         compare our performance to that of our competitors. We also believe
         adjusted income (loss) from operations is useful to investors to
         compare our operating performance to the performance of other
         communications, entertainment and media companies. We believe that
         investors use current and projected adjusted income (loss) from
         operations to estimate our current or prospective enterprise value
         and to make investment decisions.

         Because we fund and build-out our satellite radio system through the
         periodic raising and expenditure of large amounts of capital, our
         results of operations reflect significant charges for interest and
         depreciation expense. We believe adjusted income (loss) from
         operations provides useful information about the operating
         performance of our business apart from the costs associated with our
         capital structure and physical plant. The exclusion of interest and
         depreciation and amortization expense is useful given fluctuations in
         interest rates and significant variation in depreciation and
         amortization 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. We believe 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. We believe the
         exclusion of restructuring and related costs is useful given the non-
         recurring nature of these expenses. We also believe the exclusion of
         share-based payment expense is useful given the significant variation
         in expense that can result from changes in the fair market value of
         our common stock. To compensate for the exclusion of taxes, other
         income (expense), depreciation and amortization and share-based
         payment expense, we separately measure and budget for these items.

         There are material limitations associated with the use of adjusted
         income (loss) from operations in evaluating our company compared with
         net loss, which reflects overall financial performance, including the
         effects of taxes, other income (expense), depreciation and
         amortization, restructuring impairments and related costs, and share-
         based payment expense. We use adjusted income (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 our operating
         results after giving effect for these costs, should refer to net loss
         as disclosed in our unaudited condensed consolidated statements of
         operations. Since adjusted income (loss) from operations is a non-
         GAAP financial measure, our calculation of adjusted income (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.

         The reconciliation of the pro forma unadjusted net loss to the pro
         forma adjusted income (loss) from operations is calculated as follows
         (see footnotes for reconciliation of the pro forma amounts to their
         respective GAAP amounts):


                                          Unaudited Pro Forma
                                    --------------------------------------
                                    Three Months Ended    Six Months Ended
                                         June 30,              June 30,
                                    ------------------    ----------------
    (in thousands)                  2009          2008    2009       2008
                                    ----          ----    ----       ----

    Reconciliation of Net loss
     to Adjusted income (loss)
     from operations:
     Net loss                    $(171,280) $(203,471) $(234,155) $(436,858)
    Add back Net loss items
     excluded from Adjusted
     income (loss) from operations:
     Interest and investment
      income                          (901)    (2,168)    (1,641)    (6,646)
     Interest expense, net of
      amounts capitalized          100,579     47,225    172,970     94,228
     Income tax expense              1,115      1,216      2,229      2,090
     Loss on extinguishment of
      debt and credit
      facilities, net              107,756          -    125,713          -
     (Gain) loss on investments     (8,422)     4,373       (516)     8,550
     Other expense (income)           (749)     2,058     (1,259)     5,559
                                  --------   --------   --------   --------
     Income (loss) from
      operations                    28,098   (150,767)    63,341   (333,077)
     Restructuring, impairments
      and related costs             27,000          -     27,614          -
     Depreciation and
      amortization                  46,118     59,551     97,599    131,940
     Share-based payment expense    31,003     30,098     52,501     69,864

    Adjusted income (loss) from
     operations                   $132,219   $(61,118)  $241,055  $(131,273)
                                  ========   ========   ========  =========


         There are material limitations associated with the use of a pro forma
         unadjusted results of operations in evaluating our company compared
         with our GAAP results of operations, which reflects overall financial
         performance. We use pro forma unadjusted results of 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 our operating
         results after giving effect for these costs, should refer to results
         of operations as disclosed in our unaudited condensed consolidated
         statements of operations. Since pro forma unadjusted results of
         operations is a non-GAAP financial measure, our 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.

    (9)  The following tables reconcile our GAAP results of operations to our
         non-GAAP pro forma unadjusted results of operations.


                                        Unaudited For the Three Months
                                              Ended June 30, 2009
                               ---------------------------------------------
                                                       Allocation
                                            Purchase       of
                                              Price    Share-based
                                           Accounting   Payment
                               As Reported Adjustments  Expense    Pro Forma
                               ----------- ----------- ----------- ---------

    Revenue:
     Subscriber revenue,
      including effects of
      rebates                     $561,763   $15,195       $-     $576,958
     Advertising revenue, net of
      agency fees                   12,564         -        -       12,564
     Equipment revenue              10,928         -        -       10,928
     Other revenue                   5,574     1,812        -        7,386
                                     -----     -----        -        -----
    Total revenue                  590,829    17,007        -      607,836
    Operating expenses
     (excludes depreciation and
     amortization
     shown separately below) (1)
     Cost of services:
     Satellite and transmission     19,615       354   (1,310)      18,659
     Programming and content        72,102    17,701   (2,096)      87,707
     Revenue share and royalties    95,831    21,840        -      117,671
     Customer service and
      billing                       58,833       126     (905)      58,054
     Cost of equipment               8,051         -        -        8,051
     Sales and marketing            48,693     3,173   (3,256)      48,610
     Subscriber acquisition
      costs                         67,651    13,337        -       80,988
     General and administrative     66,716       406  (21,368)      45,754
     Engineering, design and
      development                   11,944       247   (2,068)      10,123
     Depreciation and
      amortization                  77,158   (31,040)       -       46,118
     Share-based payment expense         -         -   31,003       31,003
     Restructuring, impairments
      and related costs             27,000         -        -       27,000
                                    ------         -        -       ------
    Total operating expenses       553,594    26,144        -      579,738
                                   -------    ------        -      -------
     Income (loss) from
      operations                    37,235    (9,137)       -       28,098
    Other income (expense)
     Interest and investment
      income                           901         -        -          901
     Interest expense, net of
      amounts capitalized          (95,794)   (4,785)       -     (100,579)
     Loss on extinguishment of
      debt and credit
      facilities, net             (107,756)        -        -       (107,756)
     Gain on investments             8,422         -        -        8,422
     Other (expense) income            749         -        -          749
                                       ---         -        -          ---
    Total other expense           (193,478)   (4,785)       -     (198,263)
                                  --------    ------        -     --------
     Loss before income taxes     (156,243)  (13,922)       -     (170,165)
     Income tax expense             (1,115)        -        -       (1,115)
                                    ------         -        -       ------
     Net loss                    $(157,358) $(13,922)      $-    $(171,280)
                                 =========  ========       ==    =========


    (1)  Amounts related to share-based payment expense included in operating
         expenses were as follows:

    Satellite and transmission      $1,177      $133       $-       $1,310
    Programming and content          1,891       205        -        2,096
    Customer service and
     billing                           779       126        -          905
    Sales and marketing              3,072       184        -        3,256
    Subscriber acquisition
     costs                               -         -        -            -
    General and administrative     20,961        407        -       21,368
    Engineering, design and
     development                     1,821       247        -        2,068

    Total share-based payment
     expense                       $29,701    $1,302       $-      $31,003
                                   =======    ======   ======      =======


                                       Unaudited For the Three Months
                                             Ended June 30, 2008
                                ---------------------------------------------
                                                        Allocation
                                                            of
                                            Predecessor Share-based
                                             Financial    Payment
                                As Reported Information   Expense   Pro Forma
                                ----------- ----------- ----------- ---------
    Revenue:
     Subscriber revenue,
      including effects of
      rebates                     $266,518    $291,772       $-     $558,290
     Advertising revenue, net of
      agency fees                    8,332      10,432        -       18,764
     Equipment revenue               7,956       7,491        -       15,447
     Other revenue                     211       8,340        -        8,551
                                       ---       -----        -        -----
    Total revenue                  283,017     318,035        -      601,052
    Operating expenses (excludes
     depreciation and
     amortization
     shown separately below) (1)
     Cost of services:
     Satellite and transmission      7,451      19,780   (1,764)      25,467
     Programming and content        55,247      49,604   (2,980)     101,871
     Revenue share and royalties    49,723      73,586        -      123,309
     Customer service and billing   22,865      36,388   (1,017)      58,236
     Cost of equipment               6,647       9,055        -       15,702
     Sales and marketing            49,133      59,280   (5,087)     103,326
     Subscriber acquisition costs   81,392      69,193        -      150,585
     General and administrative     42,467      42,015  (16,502)      67,980
     Engineering, design and
      development                    9,028       9,414   (2,748)      15,694
     Depreciation and
      amortization                  27,113      32,438        -       59,551
     Share-based payment expense         -           -   30,098       30,098
                                         -           -   ------       ------
    Total operating expenses       351,066     400,753        -      751,819
                                   -------     -------        -      -------
     Loss from operations          (68,049)    (82,718)       -     (150,767)
    Other income (expense)
     Interest and investment
      income                         1,425         743        -        2,168
     Interest expense, net of
      amounts capitalized          (16,745)    (30,480)       -      (47,225)
     Loss on extinguishment of
      debt and credit facilities,
      net                                -           -        -            -
     Loss on investments                 -      (4,373)       -       (4,373)
     Other (expense) income             13      (2,071)       -       (2,058)
                                        --      ------        -       ------
    Total other expense            (15,307)    (36,181)       -      (51,488)
                                   -------     -------        -      -------
     Loss before income taxes      (83,356)   (118,899)       -     (202,255)
     Income tax expense               (543)       (673)       -       (1,216)
                                      ----        ----        -       ------
     Net loss                     $(83,899)  $(119,572)      $-    $(203,471)
                                  ========  ==========  ========    =========

    (1)  Amounts related to share-based payment expense included in operating
         expenses were as follows:

    Satellite and transmission        $759      $1,005       $-       $1,764
    Programming and content          1,160       1,820        -        2,980
    Customer service and billing       265         752        -        1,017
    Sales and marketing              2,464       2,623        -        5,087
    Subscriber acquisition costs         -           -        -            -
    General and administrative      11,457       5,045        -       16,502
    Engineering, design and
     development                     1,046       1,702        -        2,748

    Total share-based payment
     expense                       $17,151     $12,947       $-      $30,098
                                   =======     =======  =======      =======


                                              Unaudited For the Six Months
                                                Ended June 30, 2009
                                            -------------------------------
                                                          Allocation
                                              Purchase        of
                                               Price    Share-based
                                             Accounting    Payment
                                 As Reported Adjustments   Expense   Pro Forma
                                 ----------- ----------- ----------- ---------
    Revenue:
     Subscriber revenue,
      including effects of
      rebates                     $1,121,151   $31,883       $-    $1,153,034
     Advertising revenue, net of
      agency fees                     24,869         -        -        24,869
     Equipment revenue                20,837         -        -      20,837
     Other revenue                    10,951     3,626        -        14,577
                                      ------     -----        -        ------
    Total revenue                  1,177,808    35,509        -     1,213,317
    Operating expenses (excludes
     depreciation and
     amortization
     shown separately below) (1)
     Cost of services:
     Satellite and transmission       39,894       681   (2,174)       38,401
     Programming and content         152,511    36,592   (4,717)      184,386
     Revenue share and royalties     196,297    42,635        -       238,932
     Customer service and billing    119,041       243   (1,561)      117,723
     Cost of equipment                16,044         -        -        16,044
     Sales and marketing             100,116     6,831   (7,735)       99,212
     Subscriber acquisition costs    140,719    23,979        -       164,698
     General and administrative      126,031       878  (32,578)       94,331
     Engineering, design and
      development                     21,723       548   (3,736)       18,535
     Depreciation and
      amortization                   159,524   (61,925)       -        97,599
     Share-based payment expense           -         -   52,501        52,501
     Restructuring, impairments
      and related costs               27,614         -        -        27,614
                                      ------         -        -        ------
    Total operating expenses       1,099,514    50,462        -     1,149,976
                                   ---------    ------        -     ---------
     Income (loss) from
      operations                      78,294   (14,953)       -        63,341
    Other income (expense)
     Interest and investment
      income                           1,641         -        -         1,641
     Interest expense, net of
      amounts capitalized           (161,535)  (11,435)       -      (172,970)
     Loss on extinguishment of
      debt and credit facilities,
      net                           (125,713)        -        -      (125,713)
     Gain on investments                 516         -        -           516
     Other (expense) income            1,259         -        -         1,259
                                       -----         -        -         -----
    Total other expense             (283,832)  (11,435)       -      (295,267)
                                    --------   -------        -      --------
     Loss before income taxes       (205,538)  (26,388)       -      (231,926)
     Income tax expense               (2,229)        -        -        (2,229)
                                      ------         -        -        ------
     Net loss                      $(207,767) $(26,388)      $-     $(234,155)
                                   =========  ========  =======     =========


    (1)  Amounts related to share-based payment expense included in operating
    expenses were as follows:

    Satellite and transmission             $1,934      $240     $-     $2,174
    Programming and content                 4,381       336      -     4,717
    Customer service and billing            1,318       243      -     1,561
    Sales and marketing                     7,358       377      -     7,735
    Subscriber acquisition costs                -         -      -         -
    General and administrative             31,699       879      -    32,578
    Engineering, design and development     3,188       548      -     3,736
    Total share-based payment expense     $49,878    $2,623     $-   $52,501
                                          =======    ====== ======   =======



                                          Unaudited For the Six Months
                                               Ended June 30, 2008
                                ----------------------------------------------

                                                         Allocation
                                                             of
                                             Predecessor Share-based
                                              Financial    Payment
                                As Reported  Information   Expense   Pro Forma
                                -----------  ----------- ----------- ---------
    Revenue:
     Subscriber revenue,
      including effects of
      rebates                      $522,158   $575,187       $-    $1,097,345
     Advertising revenue, net of
      agency fees                    16,740     19,550        -        36,290
     Equipment revenue               14,019     11,812        -        25,831
     Other revenue                      450     19,941        -        20,391
                                        ---     ------        -        ------
    Total revenue                   553,367    626,490        -     1,179,857
    Operating expenses (excludes
     depreciation and
     amortization
     shown separately below) (1)
     Cost of services:
     Satellite and transmission      15,275     39,922   (3,995)       51,202
     Programming and content        116,939    101,166   (8,312)      209,793
     Revenue share and royalties     92,043    142,408        -       234,451
     Customer service and billing    49,786     70,698   (2,182)      118,302
     Cost of equipment               14,234     17,606        -        31,840
     Sales and marketing             87,598    108,786  (13,981)      182,403
     Subscriber acquisition costs   171,216    140,717      (14)      311,919
     General and administrative      91,246     83,235  (35,021)      139,460
     Engineering, design and
      development                    17,684     20,435   (6,359)       31,760
     Depreciation and
      amortization                   54,019     77,921        -       131,940
     Share-based payment expense          -          -   69,864        69,864
                                          -          -   ------        ------
    Total operating expenses        710,040    802,894        -     1,512,934
                                    -------    -------        -     ---------
     Loss from operations          (156,673)  (176,404)       -      (333,077)
    Other income (expense)
     Interest and investment
      income                          4,227      2,419        -         6,646
     Interest expense, net of
      amounts capitalized           (34,421)   (59,807)       -       (94,228)
     Loss on extinguishment of
      debt and credit facilities,
      net                                 -          -        -             -
     Loss on investments                  -     (8,550)       -        (8,550)
     Other (expense) income             (64)    (5,495)       -        (5,559)
                                        ---     ------        -        ------
    Total other expense             (30,258)   (71,433)       -      (101,691)
                                   --------   --------        -       --------
     Loss before income taxes      (186,931)  (247,837)       -      (434,768)
     Income tax expense              (1,086)    (1,004)       -        (2,090)
                                     ------     ------        -        ------
     Net loss                     $(188,017) $(248,841)      $-     $(436,858)
                                  =========  =========   ======     =========

    (1)  Amounts related to share-based payment expense included in operating
         expenses were as follows:

    Satellite and transmission        $1,555     $2,440       $-       $3,995
    Programming and content            3,949      4,363        -        8,312
    Customer service and billing         541      1,641        -        2,182
    Sales and marketing                7,704      6,277        -       13,981
    Subscriber acquisition costs          14          -        -           14
    General and administrative        23,455     11,566        -       35,021
    Engineering, design and
     development                       2,195      4,164        -        6,359

    Total share-based payment
     expense                         $39,413    $30,451       $-       $69,864
                                     =======    =======   ======       =======





(10) The following table reconciles our GAAP Net loss attributable to common stockholders to our non-GAAP Net loss before preferred stock beneficial conversion feature and Net loss before preferred stock beneficial conversion feature per common share (basic and diluted).

                                                For the Six Months
                                                   Ended June 30,
    (in thousands, except per share data)       2009           2008
    Net loss attributable to common
     stockholders                          $(393,955)     $(188,017)
    Less: Preferred stock beneficial
      conversion feature                    (186,188)             -
    Net loss before preferred stock
      beneficial conversion feature        $(207,767)     $(188,017)
    Net loss before preferred stock
      beneficial conversion feature
       per common share (basic and diluted)   $(0.06)        $(0.13)
    Weighted average common shares
      outstanding (basic and diluted)      3,555,489      1,487,610


About SIRIUS XM Radio

SIRIUS XM Radio is America's satellite radio company delivering to subscribers commercial-free music channels, premier sports, news, talk, entertainment, and traffic and weather.

SIRIUS XM Radio has content relationships with an array of personalities and artists, including Howard Stern, Martha Stewart, Oprah Winfrey, Jimmy Buffett, Jamie Foxx, Barbara Walters, Opie & Anthony, Bubba the Love Sponge(R), The Grateful Dead, Willie Nelson, Bob Dylan, Tom Petty, and Bob Edwards. SIRIUS XM Radio is the leader in sports programming as the Official Satellite Radio Partner of the NFL, Major League Baseball(R), NASCAR(R), NBA, NHL(R), and PGA TOUR(R), and broadcasts major college sports.

SIRIUS XM Radio has arrangements with every major automaker. SIRIUS XM Radio products are available at shop.sirius.com and shop.xmradio.com, and at retail locations nationwide, including Best Buy, RadioShack, Target, Sam's Club, and Wal-Mart.

SIRIUS XM Radio also offers SIRIUS Backseat TV, the first ever live in-vehicle rear seat entertainment featuring Nickelodeon, Disney Channel and Cartoon Network; XM NavTraffic(R) service for GPS navigation systems delivers real-time traffic information, including accidents and road construction, for more than 80 North American markets.

This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving SIRIUS and XM, including potential synergies and cost savings and the timing thereof, future financial and operating results, the combined company's plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," " are expected to," "anticipate," "believe," "plan," "estimate," "intend," "will," "should," "may," or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of SIRIUS' and XM's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of SIRIUS and XM. Actual results may differ materially from the results anticipated in these forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statement: our substantial indebtedness; the businesses of SIRIUS and XM may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; the useful life of our satellites; our dependence upon automakers and other third parties; our competitive position versus other forms of audio and video entertainment; and general economic conditions. Additional factors that could cause SIRIUS' and XM's results to differ materially from those described in the forward-looking statements can be found in SIRIUS' Annual Report on Form 10-K for the year ended December 31, 2008 and XM's Annual Report on Form 10-K for the year ended December 31, 2008, which are filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and SIRIUS and XM disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this communication.

E-SIRI

    Contact Information for Investors and Financial Media:
    Paul Blalock
    SIRIUS XM Radio
    212 584 5174
    paul.blalock@siriusxm.com

    Patrick Reilly
    SIRIUS XM Radio
     212 901 6646
    patrick.reilly@siriusxm.com

    Hooper Stevens
    SIRIUS XM Radio
    212 901 6718
    hooper.stevens@siriusxm.com

SOURCE SIRIUS XM Radio

http://www.sirius.com

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