Investor Relations

SIRIUS XM Radio Reports Third Quarter 2009 Results

- Net Subscriber Additions of Over 100,000
- Pro Forma Total Revenue of $630 Million, Up 3%
- Pro Forma Adjusted Income from Operations of $106 Million - An Improvement of $143 Million Year-Over-Year
- EPS, Excluding Charges, ($0.00) vs. ($0.05) Year-Over-Year
- Company Affirms Full-Year 2009 Guidance and Issues New 2010 Guidance

NEW YORK, Nov 05, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- SIRIUS XM Radio (Nasdaq: SIRI) today announced third quarter 2009 financial and operating results, including $106 million in pro forma adjusted income from operations, marking the company's fourth consecutive quarter of positive pro forma adjusted income from operations. The company also announced a 19% decrease in pro forma total cash operating expenses compared to the same quarter last year.

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

"We are very pleased with what we accomplished during the third quarter, especially when considering the macroeconomic issues affecting consumers and the auto industry," said Mel Karmazin, SIRIUS XM's CEO. "We managed to grow revenue, grow ARPU, reduce operating costs, increase adjusted income from operations significantly, and refinance higher cost debt. We look forward to continuing this performance. We grew subscribers and improved churn in the quarter, and we are well positioned to take advantage of an economic rebound. We expect to grow subscribers, revenue, and cash flow next year regardless of the magnitude of any recovery."

Third quarter 2009 pro forma total revenue was $630 million, up 3% from third quarter 2008 pro forma total revenue of $613 million. Third quarter 2009 pro forma subscription revenue was $587 million, up 3% from the third quarter 2008 pro forma subscription revenue of $572 million. Pro forma amounts exclude the effects of stock-based compensation, purchase accounting adjustments, and assume the merger of SIRIUS and XM occurred on January 1, 2008. Monthly average revenue per subscriber (ARPU) was $10.87 in the third quarter 2009, up 3% from $10.51 in the third quarter 2008.

SIRIUS XM ended the third quarter 2009 with 18,515,730 total subscribers, a decrease of 2% from the third quarter 2008 pro forma total subscribers of 18,920,911 and an increase of 102,295 from the second quarter 2009 subscribers of 18,413,435. Self-pay subscribers were 15,456,748, up 266,160 from the 15,190,588 self-pay subscribers in the third quarter 2008 and up 35,405 from the second quarter 2009. The self-pay monthly customer churn rate was 2.0% in the third quarter 2009, in-line with the second quarter 2009, and up from a pro forma 1.7% churn rate in the third quarter 2008. Ending promotional subscribers were 3,058,982 in the third quarter 2009.

In the third quarter 2009, SIRIUS XM achieved positive pro forma adjusted income from operations of $106 million as compared to a pro forma adjusted loss from operations of ($37) million in the third quarter 2008. The third quarter 2009 US GAAP net loss was ($149) million, or ($0.04) per share, and included $138 million, or ($0.04) per share, in net charges for the loss on the extinguishment of debt and credit facilities resulting from refinancing of debt at lower cost. Absent these charges, the US GAAP net loss per share was ($0.00). Third quarter 2009 free cash flow was $27 million compared to ($98) million of pro forma free cash flow in the third quarter 2008.

2009 AND 2010 OUTLOOK

SIRIUS XM affirmed its year 2009 guidance of over $400 million in pro forma full-year adjusted income from operations.

The company also provided guidance for 2010. "We expect the company's cash flow growth momentum to continue into 2010, and we project full-year adjusted income from operations to increase approximately 20% next year," said Mr. Karmazin. Based upon assumed 2010 automobile sales of 11.3 million units, SIRIUS XM expects to achieve positive full-year subscriber growth in 2010. The company also expects 2010 revenue growth of mid- to high-single digits, and growth in free cash flow compared to 2009.

"While the near future's macroeconomic performance is extremely difficult to predict, our business has reached sufficient scale to allow us to continue to grow cash flow," Mr. Karmazin added.

BALANCE SHEET IMPROVEMENTS

As previously reported, the company took advantage of strong credit markets during the third quarter by selling $257 million of new 9.75% Senior Secured Notes due 2015 in order to repay $250 million of 15% term loans that would have matured in 2011 and 2012.

"By refinancing at more favorable rates and extending maturities," noted David Frear, Executive Vice President and Chief Financial Officer, "the company has dramatically improved its near-term liquidity and doesn't face any material debt maturities until 2011. The two financing transactions completed in the second and third quarters have reset the company's capital structure, allowing us to execute our business plan without balance sheet constraints."

The company also reported that, in addition to the previously announced repurchase of $179 million of XM Holdings' 10% notes due in December 2009, it repurchased nearly $59 million of XM Holdings' 10% Senior PIK Secured Notes due 2011. "These debt repurchases demonstrate management's commitment to optimize the company's capital structure on an opportunistic basis," added Mr. Frear.

Based upon the company's current plans, it has sufficient cash, cash equivalents, and marketable securities to cover its 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 excludes the effects of stock-based compensation, purchase accounting adjustments, and assumes the merger of SIRIUS and XM occurred on January 1, 2008. All results discussed below are pro forma unless otherwise noted.

THIRD QUARTER 2009 VERSUS THIRD QUARTER 2008

For the third quarter of 2009, SIRIUS XM recognized total revenue of $630 million compared to $613 million for the third quarter 2008. This 3%, or $17 million, increase in revenue was driven by the sale of "Best of" programming, rate increases to the company's multi-subscription and Internet packages, and the U.S. Music Royalty Fee introduced this quarter.

Total ARPU for the three months ended September 30, 2009 was $10.87, compared to $10.51 for the three months ended September 30, 2008. The increase was driven mainly by the sale of "Best of" programming, increased rates on the company's multi-subscription and Internet packages, partially offset by a decline in net advertising revenue per average subscriber.

In the third quarter 2009, the company achieved positive adjusted income from operations of $106 million, compared to an adjusted loss from operations of ($37) million for the third 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 $17 million and a $126 million, or 19%, decrease in expenses included in adjusted income (loss) from operations.

Satellite and transmission costs decreased 26%, or $6 million, in the three months ended September 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 29%, or $38 million, in the three months ended September 30, 2009 compared to the same period in 2008, due mainly to a one-time payment recognized in 2008 to a programming provider upon completion of the merger with XM, reductions in personnel and on-air talent costs as well as savings on certain content agreements.

Revenue share and royalties increased 2%, or $3 million, compared to the same period in 2008, due mainly to the increase in the company's revenues and the statutory royalty rate for the performance of sound recordings.

Customer service and billing costs decreased 5%, or $3 million, due primarily to reductions in personnel and customer call center expenses.

Cost of equipment decreased 26%, or $4 million, in the three months ended September 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 32%, or $25 million, and decreased as a percentage of revenue to 8% from 13% in the three months ended September 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 17%, or $23 million, and decreased as a percentage of revenue to 17% from 22% in the three months ended September 30, 2009 compared to the same period in 2008. SAC per gross addition declined by 7% to $69 from $74 in the year ago period. This improvement was driven by lower OEM subsidies and lower aftermarket inventory charges as compared to the three months ended September 30, 2008. Subscriber acquisition costs also decreased as a result of the 13% decline in gross additions during the three months ended September 30, 2009 compared to the three months ended September 30, 2008.

General and administrative costs decreased 36%, or $28 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 8%, or $1 million, in the three months ended September 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 decreased 66%, or $5 million, due to fewer restructuring charges associated with the merger with XM.

Other expenses increased 182%, or $141 million, in the three months ended September 30, 2009 compared to the same period in 2008 driven mainly by the loss on extinguishment of debt and credit facilities of $138 million, and an increase in interest expense of $12 million, partially offset by a decrease of $7 million in loss on investments. The loss on the extinguishment of debt and credit facilities was incurred on the full repayment of SIRIUS' Credit Agreement with Liberty Media. Interest expense increased primarily due 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. The decrease in loss on investments was attributable to payments received from SIRIUS Canada in excess of SIRIUS' carrying value of its investments, partially offset by the company's share of SIRIUS Canada's and XM Canada's net losses for the three months ended September 30, 2009 compared to the same period in 2008.

NINE MONTHS ENDED SEPTEMBER 30, 2009 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2008

For the nine months ended September 30, 2009, SIRIUS XM recognized total revenue of $1,843 million compared with $1,793 million for the nine months ended September 30, 2008. This 3%, or $50 million, increase in revenue was primarily driven by an increase in subscriber revenue resulting primarily from a 2% growth in weighted average subscribers over the period as well as revenues from the sale of "Best of" programming, rate increases to the company's multi-subscription and Internet packages, and the U.S. Music Royalty Fee introduced in the quarter ended September 30, 2009.

Total ARPU for the nine months ended September 30, 2009 was $10.67, compared to $10.53 for the nine months ended September 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 adjusted income from operations increased $515 million to $347 million for the nine months ended September 30, 2009 from a loss of ($168) million for the nine months ended September 30, 2008 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). This increase was driven by a 3%, or $50 million, increase in revenue and a 24%, or $465 million, decrease in expenses included in adjusted income (loss) from operations.

Satellite and transmission costs decreased 25%, or $19 million, in the nine months ended September 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 19%, or $64 million, in the nine months ended September 30, 2009 compared to the same period in 2008, due mainly to a one-time payment recognized in 2008 to a programming provider upon completion of the merger with XM, reductions in personnel and on-air talent costs as well as savings on certain content agreements.

Revenue share and royalties increased 2%, or $7 million, for the nine months ended September 30, 2009 compared to the same period in 2008, mainly due to the increase in the company's revenues and the statutory royalty rate for the performance of sound recordings.

Customer service and billing costs decreased 2%, or $4 million, for the nine months ended September 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 42%, or $20 million, in the nine months ended September 30, 2009 compared to the same period in 2008 as a result of a decrease in the company's direct to customer sales, aftermarket inventory charges and lower inventory write-downs.

Sales and marketing costs decreased 42%, or $109 million, and decreased as a percentage of revenue to 8% from 15% in the nine months ended September 30, 2009 compared to the same period in 2008. The decrease 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 38%, or $170 million, and decreased as a percentage of revenue to 15% from 25% in the nine months ended September 30, 2009 compared to the same period in 2008. This decrease was driven by a 17% 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 nine months ended September 30, 2009 as compared to the nine months ended September 30, 2008. Subscriber acquisition costs also decreased as a result of the 28% decline in gross additions during the nine months ended September 30, 2009.

General and administrative costs decreased 34%, or $73 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 33%, or $14 million, in the nine months ended September 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 $23 million mainly due to a loss of $24 million on capitalized installment payments, offset partially by a decrease in personnel related restructuring costs.

Other expenses increased 187%, or $334 million, in the nine months ended September 30, 2009 compared to the same period in 2008 driven mainly by the loss on extinguishment of debt and credit facilities of $264 million, and an increase in interest expense of $90 million, offset by an increase of $17 million in gain on investments. The loss on the extinguishment of debt and credit facilities was incurred on the full repayment of SIRIUS' Credit Agreement with Liberty Media and 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. The increase in gain on investments was attributable to payments received from SIRIUS Canada in excess of SIRIUS' carrying value of its investment, partially offset by the company's share of SIRIUS Canada's and XM Canada's net losses for the nine months ended September 30, 2009 compared to the same period in 2008.


                                               Unaudited
                              ------------------------------------------
                              Three Months Ended       Nine Months Ended
                                September 30,            September 30,
                              -----------------        -----------------
                              2009         2008        2009         2008
                              ----         ----        ----         ----
                            (Actual)   (Pro Forma)   (Actual)   (Pro Forma)

    Beginning subscribers  18,413,435   18,576,830  19,003,856   17,348,622
    Gross subscriber
     additions              1,606,446    1,843,785   4,325,532    5,997,096
    Deactivated
     subscribers           (1,504,151)  (1,499,704) (4,813,658)  (4,424,807)
                           ----------   ----------  ----------   ----------
    Net additions             102,295      344,081    (488,126)   1,572,289
                              -------      -------    --------    ---------
    Ending subscribers     18,515,730   18,920,911  18,515,730   18,920,911
                           ==========   ==========  ==========   ==========

        Retail              7,925,904    9,036,420   7,925,904    9,036,420
        OEM                10,488,530    9,777,704  10,488,530    9,777,704
        Rental                101,296      106,787     101,296      106,787
                              -------      -------     -------      -------
    Ending subscribers     18,515,730   18,920,911  18,515,730   18,920,911
                           ==========   ==========  ==========   ==========

        Retail               (309,972)    (149,417)   (979,298)    (202,295)
        OEM                   407,131      492,216     492,692    1,744,436
        Rental                  5,136        1,282      (1,520)      30,148
                                -----        -----      ------       ------
    Net additions             102,295      344,081    (488,126)   1,572,289
                              =======      =======    ========    =========

        Self-pay           15,456,748   15,190,588  15,456,748   15,190,588
        Paid promotional    3,058,982    3,730,323   3,058,982    3,730,323
                            ---------    ---------   ---------    ---------
    Ending subscribers     18,515,730   18,920,911  18,515,730   18,920,911
                           ==========   ==========  ==========   ==========

        Self-pay               35,405      361,438     (92,838)   1,317,242
        Paid promotional       66,890      (17,357)   (395,288)     255,047
                               ------      -------    --------      -------
    Net additions             102,295      344,081    (488,126)   1,572,289
                              =======      =======    ========    =========

    Daily weighted average
     number of subscribers 18,393,678   18,710,940  18,514,041   18,187,927
                           ==========   ==========  ==========   ==========



                                         Unaudited Pro Forma
                              -----------------------------------------
                              Three Months Ended      Nine Months Ended
     (in thousands, except       September 30,          September 30,
     for per subscriber         ---------------       ----------------
     amounts)                   2009       2008       2009        2008
                                ----       ----       ----        ----

    Average self-pay monthly
     churn (1)(7)                2.0%       1.7%        2.1%        1.7%
    Conversion rate (2)(7)      46.8%      47.0%       45.3%       49.2%
    ARPU (3)(7)               $10.87     $10.51      $10.67      $10.53
    SAC, as adjusted,
     per gross subscriber
     addition (4)(7)             $69        $74         $63         $76
    Customer service and
     billing expenses, as
     adjusted, per average
     subscriber (5)(7)         $1.01      $1.05       $1.04       $1.08
    Total revenue           $629,607   $612,776  $1,842,924  $1,792,632
    Free cash flow (6)(7)    $26,724   $(97,594)    $35,772   $(577,648)
    Adjusted income (loss)
     from operations (8)    $106,140   $(36,851)   $347,198   $(168,096)
    Net loss               $(181,935) $(217,010)  $(416,090)  $(653,867)



                                         Unaudited Pro Forma
                              ------------------------------------------
                              Three Months Ended       Nine Months Ended
                                September 30,            September 30,
                               ---------------         ----------------
    (in thousands)             2009       2008         2009        2008
                               ----       ----         ----        ----
    Revenue:
        Subscriber revenue,
         including effects
         of rebates          $587,442   $572,355  $1,740,477  $1,669,700
        Advertising revenue,
         net of agency fees    12,418     17,867      37,287      54,156
        Equipment revenue      10,506     12,856      31,343      38,687
        Other revenue          19,241      9,698      33,817      30,089
                               ------      -----      ------      ------
    Total revenue             629,607    612,776   1,842,924   1,792,632

    Operating expenses:
        Satellite and
         transmission          18,676     25,136      57,077      76,336
        Programming
         and content           93,230    131,630     277,614     341,422
        Revenue share
         and royalties        123,531    120,800     362,463     355,251
        Customer service
         and billing           55,795     58,857     173,517     177,159
        Cost of equipment      11,944     16,179      27,988      48,020
        Sales and marketing    52,827     78,178     152,039     260,583
        Subscriber
         acquisition costs    109,384    132,477     274,082     444,396
        General and
         administrative        48,481     75,981     142,812     215,440
        Engineering, design
         and development        9,599     10,389      28,134      42,121
        Depreciation and
         amortization          47,997     64,111     145,596     196,051
        Share-based
         payment expense       18,799     29,809      71,301      99,673
        Restructuring,
         impairments and
         related costs          2,554      7,430      30,167       7,457
                                -----      -----      ------       -----
    Total operating expenses  592,817    750,977   1,742,790   2,263,909
                              -------    -------   ---------   ---------
    Income (loss) from
     operations                36,790   (138,201)    100,134    (471,277)
        Other expense        (217,610)   (77,086)   (512,880)   (178,777)
                             --------    -------    --------    --------
    Loss before income taxes (180,820)  (215,287)   (412,746)   (650,054)
        Income tax expense     (1,115)    (1,723)     (3,344)     (3,813)
                               ------     ------      ------      ------

    Net loss                $(181,935) $(217,010)  $(416,090)  $(653,867)
                            =========  =========   =========   =========



                                              Unaudited Actual
                                 -------------------------------------------
                                   For the Three              For the Nine
                                    Months Ended              Months Ended
                                    September 30,             September 30,
    (in thousands, except        -----------------         -----------------
     per share data)             2009         2008         2009         2008
                                 ----         ----         ----         ----
    Revenue:
        Subscriber revenue,
         including effects of
         rebates               $578,304     $458,237  $1,699,455     $980,396
        Advertising revenue,
         net of agency fees      12,418       14,674      37,287       31,413
        Equipment revenue        10,506       11,271      31,343       25,290
        Other revenue            17,428        4,261      28,379        4,710
                                 ------        -----      ------        -----
    Total revenue               618,656      488,443   1,796,464    1,041,809
    Operating expenses
     (depreciation and
     amortization shown
     separately below) (1):
        Cost of services:
            Satellite and
             transmission        19,542       19,526      59,435       34,800
            Programming
             and content         78,315      106,037     230,825      222,975
            Revenue share
             and royalties      100,558       85,592     296,855      177,635
            Customer service
             and billing         56,529       47,432     175,570       97,218
            Cost of equipment    11,944       13,773      27,988       28,007
        Sales and marketing      52,530       63,637     152,647      151,237
        Subscriber acquisition
         costs                   90,054       86,616     230,773      257,832
        General and
         administrative          56,923       57,310     182,953      148,555
        Engineering, design
         and development         11,252       10,434      32,975       28,091
        Impairment of goodwill        -    4,750,859           -    4,750,859
        Depreciation and
         amortization            72,100       66,774     231,624      120,793
        Restructuring,
         impairments and
         related costs            2,554        7,430      30,167        7,457
                                  -----        -----      ------        -----
    Total operating expenses    552,301    5,315,420   1,651,812    6,025,459
                                -------    ---------   ---------    ---------
        Income (loss) from
         operations              66,355   (4,826,977)    144,652   (4,983,650)
    Other income (expense):
        Interest and
         investment income          962        4,940       2,602        9,167
        Interest expense, net
         of amounts
         capitalized            (78,527)     (49,216)   (240,062)     (83,636)
        Loss on extinguishment
         of debt and credit
         facilities, net       (138,053)           -    (263,767)           -
        (Loss) gain on
         investments                (58)      (3,089)        457       (3,089)
        Other income (expense)    1,246       (3,870)      2,505       (3,935)
                                  -----       ------       -----       ------
    Total other expense        (214,430)     (51,235)   (498,265)     (81,493)
                               --------      -------    --------      -------
        Loss before
         income taxes          (148,075)  (4,878,212)   (353,613)  (5,065,143)
        Income tax expense       (1,115)      (1,215)     (3,344)      (2,301)

                               --------   ----------    --------   ----------
            Net loss           (149,190)  (4,879,427)   (356,957)  (5,067,444)
        Preferred stock
         beneficial conversion
         feature                      -            -    (186,188)           -
                                    ---          ---    --------          ---
            Net loss
             attributable
             to common
             stockholders     $(149,190) $(4,879,427)  $(543,145) $(5,067,444)
                              =========  ===========   =========  ===========
    Net loss per common share
     (basic and diluted)         $(0.04)      $(1.93)     $(0.15)      $(2.76)
                                 ======       ======      ======       ======
    Weighted average common
     shares outstanding
     (basic and diluted)      3,621,062    2,527,692   3,577,587    1,836,834
                              =========    =========   =========    =========
    -------------------------
    (1) Amounts related to share-based payment expense included in operating
        expenses were as follows:

    Satellite and transmission   $1,086       $1,331      $3,020       $2,887
    Programming and content       3,037        3,529       7,418        7,477
    Customer service and
     billing                        734          596       2,052        1,137
    Sales and marketing           2,722        3,672      10,081       11,376
    Subscriber acquisition
     costs                            -            -           -           14
    General and administrative    8,442       12,904      40,141       36,359
    Engineering, design and
     development                  1,653        1,973       4,841        4,167
                                  -----        -----       -----        -----
    Total share-based payment
     expense                    $17,674      $24,005     $67,553      $63,417
                                =======      =======     =======      =======



                                                   September     December
                                                   30, 2009      31, 2008
     (in thousands, except share and               --------      ---------
     per share data)                              (Unaudited)
                           ASSETS
    Current assets:
      Cash and cash equivalents                    $380,372      $380,446
      Accounts receivable, net of allowance for
       doubtful accounts of $9,872 and $10,860,
       respectively                                  87,148       102,024
      Receivables from distributors                  41,755        45,950
      Inventory, net                                 20,996        24,462
      Prepaid expenses                              107,350        67,203
      Related party current assets                  109,172       114,177
      Other current assets                           64,317        58,744
                                                     ------        ------
          Total current assets                      811,110       793,006
    Property and equipment, net                   1,694,235     1,703,476
    FCC licenses                                  2,083,654     2,083,654
    Restricted investments                            3,400       141,250
    Deferred financing fees, net                     35,889        40,156
    Intangible assets, net                          629,288       688,671
    Goodwill                                      1,834,856     1,834,856
    Related party long-term assets                  114,073       124,607
    Other long-term assets                           62,438        81,019
                                                     ------        ------
            Total assets                         $7,268,943    $7,490,695
                                                 ==========    ==========
           LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable and accrued expenses        $521,621      $642,820
      Accrued interest                               65,537        76,463
      Current portion of deferred revenue           987,177       985,180
      Current portion of deferred credit
       on executory contracts                       247,566       234,774
      Current maturities of long-term debt          103,674       399,726
      Related party current liabilities              90,869        68,373
                                                     ------        ------
            Total current liabilities             2,016,444     2,407,336
    Deferred revenue                                285,488       247,889
    Deferred credit on executory contracts          851,955     1,037,190
    Long-term debt                                2,874,391     2,851,740
    Long-term related party debt                    265,659             -
    Deferred tax liability                          906,428       894,453
    Related party long-term liabilities              21,928             -
    Other long-term liabilities                      39,005        43,550
                                                     ------        ------
            Total liabilities                     7,261,298     7,482,158
                                                  ---------     ---------

    Commitments and contingencies
    Stockholders' equity:
      Preferred stock, par value $0.001;
       50,000,000 authorized at September 30,
       2009 and December 31, 2008:
         Series A convertible preferred stock
          (liquidation preference of $51,370
          at September 30, 2009 and December
          31, 2008); 24,808,959 shares issued
          and outstanding at September 30, 2009
          and December 31, 2008                          25            25
         Convertible perpetual preferred stock,
          series B (liquidation preference of
          $13 and $0 at September 30, 2009 and
          December 31, 2008, respectively);
          12,500,000 and zero shares issued
          and outstanding at September 30, 2009
          and December 31, 2008, respectively            13             -
         Convertible preferred stock, series C
          junior; no shares issued and outstanding
          at September 30, 2009 and
          December 31, 2008                               -             -
      Common stock, par value $0.001; 9,000,000,000
       and 8,000,000,000 shares authorized at
       September 30, 2009 and December 31, 2008,
       respectively; 3,858,186,839 and
       3,651,765,837 shares issued and
       outstanding at September 30, 2009 and
       December 31, 2008, respectively                3,858         3,652
      Accumulated other comprehensive
       loss, net of tax                              (6,598)       (7,871)
      Additional paid-in capital                 10,265,752     9,724,991
      Accumulated deficit                       (10,255,405)   (9,712,260)
                                                -----------    ----------
            Total stockholders' equity                7,645         8,537
                                                      -----         -----
            Total liabilities and
             stockholders' equity                $7,268,943    $7,490,695
                                                 ==========    ==========



                                                 Unaudited For the Nine Months
                                                        Ended September 30,
                                                        -------------------
    (in thousands)                                       2009          2008
                                                         ----          ----
    Cash flows from operating activities:
        Net loss                                       $(356,957) $(5,067,444)
        Adjustments to reconcile net loss to
         net cash provided by (used in)
         operating activities:
            Depreciation and amortization                231,624      114,923
            Impairment of goodwill                             -    4,750,859
            Non-cash interest expense,
             net of amortization of premium               32,909       (1,933)
            Provision for doubtful accounts               23,879       11,125
            Amortization of deferred income
             related to equity method investment          (2,082)        (471)
            Loss on extinguishment of
             debt and credit facilities, net             263,767            -
            Restructuring, impairments and
             related costs                                26,954            -
            Loss on disposal of assets                         -        4,879
            Loss on investments                           10,967        3,089
            Share-based payment expense                   67,553       63,417
            Deferred income taxes                          3,344        2,301
            Other non-cash purchase
             price adjustments                          (142,487)     (23,770)
            Other                                              -        1,643
            Changes in operating assets
             and liabilities:
                Accounts receivable                       (9,002)       1,575
                Inventory                                  3,466        2,952
                Receivables from distributors              4,195        9,595
                Related party assets                      15,539       (1,357)
                Prepaid expenses and other
                 current assets                           30,188        3,528
                Other long-term assets                    64,034       37,110
                Accounts payable and accrued expenses    (68,135)    (122,969)
                Accrued interest                          (6,600)      (2,810)
                Deferred revenue                          11,569       (4,577)
                Related party liabilities                 44,424        3,315
                Other long-term liabilities                3,958       (1,972)
                                                           -----       ------
                        Net cash provided by (used in)
                         operating activities            253,107     (216,992)
                                                         -------     --------

    Cash flows from investing activities:
        Additions to property and equipment             (217,335)    (102,705)
        Sales of property and equipment                        -          105
        Purchases of restricted and
         other investments                                     -       (3,000)
        Acquisition of acquired entity cash                    -      819,521
        Merger related costs                                   -      (13,047)
        Sale of restricted and other investments               -       65,642
                                                             ---       ------
                        Net cash (used in) provided by
                         investing activities           (217,335)     766,516
                                                        --------      -------


    Cash flows from financing activities:
        Proceeds from exercise of warrants
         and stock options                                     -          471
        Preferred stock issuance costs, net               (3,712)           -
        Long-term borrowings, net                        579,936      533,941
        Related party long-term borrowings, net          364,964            -
        Short-term financings                              2,220            -
        Payment of premiums on redemption of debt        (17,075)     (18,693)
        Payments to minority interest holder                   -      (61,880)
        Repayment of long-term borrowings               (610,932)  (1,082,428)
        Repayment of related party long-term
         borrowings                                     (351,247)           -
        Other                                                  -          (98)
                                                             ---          ---
                        Net cash used in
                         financing activities            (35,846)    (628,687)
                                                         -------     --------
    Net decrease in cash and cash equivalents                (74)     (79,163)
    Cash and cash equivalents at beginning of period     380,446      438,820
                                                         -------      -------
    Cash and cash equivalents at end of period          $380,372     $359,657
                                                        ========     ========



    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     Nine Months Ended
                                  September 30,           September 30,
                                 ---------------        ----------------
                                 2009       2008        2009        2008
                                 ----       ----        ----        ----

    Subscriber revenue        $587,442    $572,355  $1,740,477  $1,669,700
    Net advertising revenue     12,418      17,867      37,287      54,156
                                ------      ------      ------      ------
      Total subscriber and net
       advertising revenue    $599,860    $590,222  $1,777,764  $1,723,856
                              ========    ========  ==========  ==========

    Daily weighted average
     number of subscribers  18,393,678  18,710,940  18,514,041  18,187,927
    ARPU                        $10.87      $10.51      $10.67      $10.53


    (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   Nine Months Ended
                                     September 30,        September 30,
                                    ---------------      ---------------
                                    2009       2008      2009       2008
                                    ----       ----      ----       ----

    Subscriber acquisition cost   $109,384  $132,477  $274,082   $444,410
    Less: share-based payment
     expense granted to third
     parties and employees               -         -         -        (14)
    Less/Add: margin from direct
     sales of radios and
     accessories                     1,438     3,323    (3,355)     9,333
                                     -----     -----    ------      -----
    SAC, as adjusted              $110,822  $135,800  $270,727   $453,729
                                  ========  ========  ========   ========

    Gross subscriber additions   1,606,446 1,843,785 4,325,532  5,997,096
    SAC, as adjusted, per gross
     subscriber addition               $69       $74       $63        $76


    (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       Nine Months Ended
                                 September 30,           September 30,
                               ----------------        ----------------
                               2009        2008        2009        2008
                               ----        ----        ----        ----
    Customer service and
     billing expenses        $56,644     $59,786    $175,928    $180,270
    Less: share-based
     payment expense            (849)       (929)     (2,411)     (3,111)
                                ----        ----      ------      ------
    Customer service and
     billing expenses, as
     adjusted                $55,795     $58,857    $173,517    $177,159
                             =======     =======    ========    ========

    Daily weighted
     average number of
     subscribers          18,393,678  18,710,940  18,514,041  18,187,927
    Customer service and
     billing expenses, as
     adjusted, per average
     subscriber                $1.01       $1.05       $1.04       $1.08


    (6)  Free cash flow is calculated as follows:

                                           Unaudited Pro Forma
                                 --------------------------------------
                                 Three Months Ended   Nine Months Ended
                                   September 30,        September 30,
                                  ---------------      ---------------
    (in thousands)                2009       2008      2009       2008
                                  ----       ----      ----       ----

    Net cash provided by
     (used in) operating
     activities                 $116,248  $(101,983) $253,107  $(468,078)
    Additions to property and
     equipment                   (89,524)   (32,403) (217,335)  (133,548)
    Merger related costs               -      1,796         -    (13,047)
    Restricted and other
     investment activity               -     34,996         -     37,025
                                     ---     ------       ---     ------
    Free cash flow               $26,724   $(97,594)  $35,772  $(577,648)
                                 =======   ========   =======  =========


    (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 and related cost, 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 transactions. 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 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   Nine Months Ended
                                      September 30,         September 30,
                                     ---------------      ---------------
    (in thousands)                   2009       2008      2009       2008
                                     ----       ----      ----       ----
    Reconciliation of Net loss to
     Adjusted income (loss) from
     operations:
        Net loss                 $(181,935) $(217,010) $(416,090) $(653,867)
    Add back Net loss items
     excluded from Adjusted
     income (loss) from
     operations:
        Interest and investment
         income                       (962)    (5,534)    (2,602)   (12,180)
        Interest expense, net
         of amounts capitalized     81,707     70,153    254,677    164,380
        Income tax expense           1,115      1,723      3,344      3,813
        Loss on extinguishment
         of debt and
         facilities, net           138,053          -    263,767          -
        Loss (gain) on investments      58      7,549       (457)    16,099
        Other (income) expense      (1,246)     4,918     (2,505)    10,478
                                    ------      -----     ------     ------
          Income (loss)
           from operations          36,790   (138,201)   100,134   (471,277)
        Restructuring, impairments
         and related costs           2,554      7,430     30,167      7,457
        Depreciation and
         amortization               47,997     64,111    145,596    196,051
        Share-based payment expense 18,799     29,809     71,301     99,673
                                    ------     ------     ------     ------
    Adjusted income (loss)
     from operations              $106,140   $(36,851)  $347,198  $(168,096)
                                  ========   ========   ========  =========


         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 (in thousands):

                                      Unaudited For the Three Months Ended
                                               September 30, 2009
                                   -----------------------------------------
                                                          Allocation
                                                            of
                                              Purchase     Share-
                                                Price      based
                                     As      Accounting   Payment       Pro
                                   Reported  Adjustments   Expense     Forma
                                   --------  -----------  --------     -----
    Revenue:
        Subscriber revenue,
         including effects of
         rebates                   $578,304       $9,138        $-   $587,442
        Advertising revenue,
         net of agency fees          12,418            -         -     12,418
        Equipment revenue            10,506            -         -     10,506
        Other revenue                17,428        1,813         -     19,241
                                     ------        -----       ---     ------
    Total revenue                   618,656       10,951         -    629,607
    Operating expenses
     (excludes depreciation
     and amortization shown
     separately below) (1)
        Cost of services:
            Satellite and
             transmission            19,542          331    (1,197)    18,676
            Programming
             and content             78,315       18,117    (3,202)    93,230
            Revenue share
             and royalties          100,558       22,973         -    123,531
            Customer service and
             billing                 56,529          115      (849)    55,795
            Cost of equipment        11,944            -         -     11,944
        Sales and marketing          52,530        3,155    (2,858)    52,827
        Subscriber acquisition
         costs                       90,054       19,330         -    109,384
        General and administrative   56,923          374    (8,816)    48,481
        Engineering, design and
         development                 11,252          224    (1,877)     9,599
        Depreciation and
         amortization                72,100      (24,103)        -     47,997
        Share-based payment expense       -            -    18,799     18,799
        Restructuring, impairments
         and related costs            2,554            -         -      2,554
                                      -----          ---       ---      -----
    Total operating expenses        552,301       40,516         -    592,817
                                    -------       ------       ---    -------
        Income (loss) from
         operations                  66,355      (29,565)        -     36,790
    Other income (expense)
        Interest and investment
         income                         962            -         -        962
        Interest expense, net
         of amounts capitalized     (78,527)      (3,180)        -    (81,707)
        Loss on extinguishment of
         debt and facilities, net  (138,053)           -         -   (138,053)
        Loss on investments             (58)           -         -        (58)
        Other income                  1,246            -         -      1,246
                                      -----          ---       ---      -----
    Total other expense            (214,430)      (3,180)        -   (217,610)
                                   --------       ------       ---   --------
        Loss before income taxes   (148,075)     (32,745)        -   (180,820)
        Income tax expense           (1,115)           -         -     (1,115)
                                     ------          ---       ---     ------
            Net loss              $(149,190)    $(32,745)       $-  $(181,935)
                                  =========     ========       ===  =========

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

    Satellite and transmission       $1,086         $111        $-     $1,197
    Programming and content           3,037          165         -      3,202
    Customer service and billing        734          115         -        849
    Sales and marketing               2,722          136         -      2,858
    Subscriber acquisition costs          -            -         -          -
    General and administrative        8,442          374         -      8,816
    Engineering, design and
     development                      1,653          224         -      1,877
                                      -----          ---       ---      -----
    Total share-based payment
     expense                        $17,674       $1,125        $-    $18,799
                                    =======       ======       ===    =======



                                 Unaudited For the Three Months Ended
                                           September 30, 2008
                           ------------------------------------------------
                                                 Purchase  Allocation
                                                   Price      of
                                    Predecessor  Accounting  Share-
                                     Financial    Adjust-    based
                              As      Inform-      ments    Payment    Pro
                           Reported    ation        (a)     Expense   Forma
                           --------    -----       -----    -------   -----
    Revenue:
        Subscriber revenue,
         including effects
         of rebates        $458,237   $95,684     $18,434       $-   $572,355
        Advertising
         revenue, net of
         agency fees         14,674     3,193           -        -     17,867
        Equipment revenue    11,271     1,585           -        -     12,856
        Other revenue         4,261     4,242       1,195        -      9,698
                              -----     -----       -----      ---      -----
    Total revenue           488,443   104,704      19,629        -    612,776
    Operating expenses
     (excludes depreciation
     and amortization
     shown separately
     below) (1)
        Cost of services:
            Satellite and
             transmission    19,526     6,644         638   (1,672)    25,136
            Programming
             and content    106,037    15,991      13,912   (4,310)   131,630
            Revenue share
             and royalties   85,592    24,198      11,010        -    120,800
            Customer
             service and
             billing         47,432    12,249         105     (929)    58,857
            Cost of
             equipment       13,773     2,406           -        -     16,179
        Sales and marketing  63,637    17,268       2,081   (4,808)    78,178
        Subscriber
         acquisition costs   86,616    33,366      12,495        -    132,477
        General and
         administrative      57,310    33,209         777  (15,315)    75,981
        Engineering,
         design and
         development         10,434     2,611         119   (2,775)    10,389
        Impairment
         of goodwill      4,750,859         -  (4,750,859)       -          -
        Depreciation and
         amortization        66,774    10,828     (13,491)       -     64,111
        Restructuring,
         impairments and
         related costs        7,430         -           -        -      7,430
        Share-based
         payment expense          -         -           -   29,809     29,809
                                ---       ---         ---   ------     ------
    Total operating
     expenses             5,315,420   158,770  (4,723,213)       -    750,977
                          ---------   -------  ----------      ---    -------
        Loss from
         operations      (4,826,977)  (54,066)  4,742,842        -   (138,201)
    Other income (expense)
        Interest and
         investment
         income               4,940       594           -        -      5,534
        Interest expense,
         net of amounts
         capitalized        (49,216)  (14,130)     (6,807)       -    (70,153)
        Loss on
         extinguishment of
         debt and
         facilities, net          -         -           -        -          -
        Loss on investments  (3,089)   (4,460)          -        -     (7,549)
        Other expense        (3,870)   (1,048)          -        -     (4,918)
                             ------    ------         ---      ---     ------
    Total other expense     (51,235)  (19,044)     (6,807)       -    (77,086)
                            -------   -------      ------      ---    -------
        Loss before
         income taxes    (4,878,212)  (73,110)  4,736,035        -   (215,287)
        Income tax
         expense             (1,215)     (508)          -        -     (1,723)
                             ------      ----         ---      ---     ------
            Net loss    $(4,879,427) $(73,618) $4,736,035       $-  $(217,010)
                        ===========  ========  ==========      ===  =========

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

    Satellite and
     transmission            $1,331      $305         $36       $-     $1,672
    Programming and content   3,529       586         195        -      4,310
    Customer service and
     billing                    596       228         105        -        929
    Sales and marketing       3,672       770         366        -      4,808
    Subscriber acquisition
     costs                        -         -           -        -          -
    General and
     administrative          12,904     1,634         777        -     15,315
    Engineering, design and
     development              1,973       510         292        -      2,775
                              -----       ---         ---      ---      -----
    Total share-based
     payment expense        $24,005    $4,033      $1,771       $-    $29,809
                            =======    ======      ======      ===    =======

    ------------------------------
    (a) Includes impairment of goodwill.



                                    Unaudited For the Nine Months Ended
                                             September 30, 2009
                                  ----------------------------------------
                                                       Allocation
                                                           of
                                             Purchase    Share-
                                               Price      based
                                     As      Accounting  Payment     Pro
                                  Reported  Adjustments  Expense    Forma
                                  --------  -----------  -------    -----
    Revenue:
        Subscriber revenue,
         including effects of
         rebates                 $1,699,455   $41,022       $-  $1,740,477
        Advertising revenue,
         net of agency fees          37,287         -        -      37,287
        Equipment revenue            31,343         -        -      31,343
        Other revenue                28,379     5,438        -      33,817
                                     ------     -----      ---      ------
    Total revenue                 1,796,464    46,460        -   1,842,924
    Operating expenses (excludes
     depreciation and
     amortization shown
     separately below) (1)
        Cost of services:
            Satellite and
             transmission            59,435     1,013   (3,371)     57,077
            Programming and
             content                230,825    54,708   (7,919)    277,614
            Revenue share and
             royalties              296,855    65,608        -     362,463
            Customer service and
             billing                175,570       358   (2,411)    173,517
            Cost of equipment        27,988         -        -      27,988
        Sales and marketing         152,647     9,986  (10,594)    152,039
        Subscriber acquisition
         costs                      230,773    43,309        -     274,082
        General and administrative  182,953     1,252  (41,393)    142,812
        Engineering, design and
         development                 32,975       772   (5,613)     28,134
        Depreciation and
         amortization               231,624   (86,028)       -     145,596
        Share-based payment
         expense                          -         -   71,301      71,301
        Restructuring, impairments
         and related costs           30,167         -        -      30,167
                                     ------       ---      ---      ------
    Total operating expenses      1,651,812    90,978        -   1,742,790
                                  ---------    ------      ---   ---------
        Income (loss) from
         operations                 144,652   (44,518)       -     100,134
    Other income (expense)
        Interest and
         investment income            2,602         -        -       2,602
        Interest expense, net
         of amounts capitalized    (240,062)  (14,615)       -    (254,677)
        Loss on extinguishment of
         debt and facilities, net  (263,767)        -        -    (263,767)
        Gain on investments             457         -        -         457
        Other income                  2,505         -        -       2,505
                                      -----       ---      ---       -----
    Total other expense            (498,265)  (14,615)       -    (512,880)
                                   --------   -------      ---    --------
        Loss before income taxes   (353,613)  (59,133)       -    (412,746)
        Income tax expense           (3,344)        -        -      (3,344)
                                     ------       ---      ---      ------
            Net loss              $(356,957) $(59,133)      $-   $(416,090)
                                  =========  ========      ===   =========

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

    Satellite and transmission       $3,020      $351       $-      $3,371
    Programming and content           7,418       501        -       7,919
    Customer service and billing      2,052       359        -       2,411
    Sales and marketing              10,081       513        -      10,594
    Subscriber acquisition costs          -         -        -           -
    General and administrative       40,141     1,252        -      41,393
    Engineering, design and
     development                      4,841       772        -       5,613
                                      -----       ---      ---       -----
    Total share-based
     payment expense                $67,553    $3,748       $-     $71,301
                                    =======    ======      ===     =======



                              Unaudited For the Nine Months Ended
                                     September 30, 2008
                        ---------------------------------------------------
                                               Purchase    Allocation
                                                Price         of
                                  Predecessor Accounting    Share-
                                   Financial    Adjust-      based
                          As        Inform-      ments      Payment    Pro
                        Reported     ation        (a)       Expense   Forma
                        --------     -----       -----      -------   -----
    Revenue:
        Subscriber
         revenue,
         including
         effects of
         rebates         $980,396   $670,870     $18,434       $-  $1,669,700
        Advertising
         revenue,
         net of
         agency fees       31,413     22,743           -        -      54,156
        Equipment revenue  25,290     13,397           -        -      38,687
        Other revenue       4,710     24,184       1,195        -      30,089
                            -----     ------       -----      ---      ------
    Total revenue       1,041,809    731,194      19,629        -   1,792,632
    Operating expenses
     (excludes
     depreciation and
     amortization
     shown separately
     below) (1)
        Cost of services:
            Satellite and
             transmission  34,800     46,566         638   (5,668)     76,336
            Programming
             and content  222,975    117,156      13,912  (12,621)    341,422
            Revenue
             share and
             royalties    177,635    166,606      11,010        -     355,251
            Customer
             service and
             billing       97,218     82,947         105   (3,111)    177,159
            Cost of
             equipment     28,007     20,013           -        -      48,020
        Sales and
         marketing        151,237    126,054       2,081  (18,789)    260,583
        Subscriber
         acquisition
         costs            257,832    174,083      12,495      (14)    444,396
        General and
         administrative   148,555    116,444         777  (50,336)    215,440
        Engineering,
         design and
         development       28,091     23,045         119   (9,134)     42,121
        Impairment
         of goodwill    4,750,859          -  (4,750,859)       -           -
        Depreciation and
         amortization     120,793     88,749     (13,491)       -     196,051
        Restructuring,
         impairments and
         related costs      7,457          -           -        -       7,457
        Share-based
         payment expense        -          -           -   99,673      99,673
                              ---        ---         ---   ------      ------
    Total operating
     expenses           6,025,459    961,663  (4,723,213)       -   2,263,909
                        ---------    -------  ----------      ---   ---------
        Loss from
         operations    (4,983,650)  (230,469)  4,742,842        -    (471,277)
    Other income
     (expense)
        Interest and
         investment
         income             9,167      3,013           -        -      12,180
        Interest
         expense, net
         of amounts
         capitalized      (83,636)   (73,937)     (6,807)       -    (164,380)
        Loss on
         extinguishment
         of debt and
         facilities, net        -          -           -        -           -
        Loss on
         investments       (3,089)   (13,010)          -        -     (16,099)
        Other expense      (3,935)    (6,543)          -        -     (10,478)
                           ------     ------         ---      ---     -------
    Total other expense   (81,493)   (90,477)     (6,807)       -    (178,777)
                          -------    -------      ------      ---    --------
        Loss before
         income taxes  (5,065,143)  (320,946)  4,736,035        -    (650,054)
        Income tax
         expense           (2,301)    (1,512)          -        -      (3,813)
                           ------     ------         ---      ---      ------
            Net loss  $(5,067,444) $(322,458) $4,736,035       $-   $(653,867)
                      ===========  =========  ==========      ===   =========

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

    Satellite and
     transmission          $2,887     $2,745         $36       $-      $5,668
    Programming
     and content            7,477      4,949         195        -      12,621
    Customer service and
     billing                1,137      1,869         105        -       3,111
    Sales and marketing    11,376      7,047         366        -      18,789
    Subscriber acquisition
     costs                     14          -           -        -          14
    General and
     administrative        36,359     13,200         777        -      50,336
    Engineering, design
     and development        4,167      4,675         292        -       9,134
                            -----      -----         ---      ---       -----
    Total share-based
     payment expense      $63,417    $34,485      $1,771       $-     $99,673
                          =======    =======      ======      ===     =======

    ------------------------------
    (a) Includes impairment of goodwill.



    (10) The following table reconciles our GAAP Net loss per common share
         (basic and diluted) to our non-GAAP Net loss per common share (basic
         and diluted) excluding the following charges: (a) preferred stock
         beneficial conversion feature, (b) loss on extinguishment of debt and
         credit facilities, net, and (c) loss on impairment of goodwill.

                                                    Unaudited
                                    -----------------------------------------
                                    Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
    (per share data includes        ------------------      -----------------
     basic and diluted)             2009          2008      2009         2008
                                    ----          ----      ----         ----

    Net loss per common share      $(0.04)      $(1.93)   $(0.15)      $(2.76)
    Less: Preferred stock
     beneficial conversion feature      -            -     (0.05)           -
                                      ---          ---     -----          ---
    Net loss per common share
     excluding preferred stock
     beneficial conversion
     feature                        (0.04)       (1.93)    (0.10)       (2.76)
    Less: Loss on extinguishment
     of debt and credit
     facilities, net                (0.04)           -     (0.07)           -
                                    -----          ---     -----          ---
    Net loss per common share
     excluding loss on
     extinguishment of debt
     and credit facilities,
     net and preferred stock
     beneficial conversion
     feature                        (0.00)       (1.93)    (0.03)       (2.76)
    Less: Impairment of goodwill        -        (1.88)        -        (2.59)
                                      ---        -----       ---        -----
    Net loss per common share,
     excluding charges             $(0.00)      $(0.05)   $(0.03)      $(0.17)
                                   ======       ======    ======       ======

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, Rosie O'Donnell, Jamie Foxx, Barbara Walters, Opie & Anthony, Bubba the Love Sponge(R), Bob Edwards, Chris "Mad Dog" Russo, Jimmy Buffett, The Grateful Dead, Willie Nelson, Bob Dylan and Tom Petty. 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 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, Wal-Mart and independent retailers.

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:

    Investors:

    William Prip
    212 584 5289
    william.prip@siriusxm.com

    Hooper Stevens
    212 901 6718
    hooper.stevens@siriusxm.com

    Media:

    Patrick Reilly
    212 901 6646
    patrick.reilly@siriusxm.com

SOURCE SIRIUS XM Radio

http://www.sirius.com

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