August 7, 2008

SIRIUS XM Radio Reports Second Quarter 2008 Results

- Revenue of $283 Million, Up 25% Year Over Year
- Total Subscribers of More Than 8.9 Million, Up 25% Year Over Year
- Record Second Quarter Gross Additions
- Adjusted Loss from Operations Improves 70% Year Over Year

NEW YORK, Aug 07, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- SIRIUS XM Radio (Nasdaq: SIRI) today announced stand alone SIRIUS Satellite Radio second quarter 2008 financial results, including a 25% increase in revenue to $283.0 million, total subscribers in excess of 8.9 million and a 70% decrease in the adjusted loss from operations.

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

"Second quarter stand-alone SIRIUS results once again demonstrated that we achieved strong revenue growth and solid cost control," said Mel Karmazin, CEO of SIRIUS. "Despite a tough economy and weak auto sales, gross additions set a new second quarter record. In the second quarter both revenue and subscribers grew 25% as compared with last year, while cash costs remained essentially flat leading to a 70% reduction in our second quarter EBITDA loss."

"The combined company now has an annualized revenue run-rate of over $2.4 billion, making SIRIUS XM Radio one of the fastest growing and best positioned subscription media businesses. With rapid integration efforts underway, we started realizing synergies on Day 1. We expect to realize $400 million in synergies next year and see this figure growing substantially beyond 2009."

SIRIUS ended the second quarter 2008 with 8,924,139 subscribers up 25% from 7,142,538 subscribers at the end of the second quarter 2007. Retail subscribers increased 7% in the second quarter 2008 to 4,676,814 from 4,364,646 at the end of the second quarter 2007. OEM subscribers increased 53% in the second quarter 2008 to 4,247,325 from 2,777,892 at the end of second quarter 2007. During the second quarter 2008, SIRIUS added 279,820 net subscribers.

Total revenue for the second quarter 2008 increased to $283.0 million, up 25% from second quarter 2007 total revenue of $226.4 million. Second quarter 2008 average monthly self-pay customer churn rate was 1.6%. The second quarter 2008 conversion rate was approximately 48%. SAC per gross subscriber addition was $78 in the second quarter 2008, an improvement of 27% over second quarter 2007 SAC per gross subscriber addition of $107.

RESULTS OF OPERATIONS

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

SECOND QUARTER 2008 VERSUS SECOND QUARTER 2007

For the second quarter of 2008, SIRIUS recognized total revenue of $283.0 million compared to $226.4 million for the second quarter of 2007. This 25%, or $56.6 million, increase in revenue was driven by a $56.9 million increase in subscriber revenue resulting from the net increase in subscribers of 1,781,601 from the second quarter of 2007.

The company's adjusted loss from operations decreased $55.5 million to ($23.8) million for the second quarter of 2008 from ($79.3) million for the second quarter of 2007 (refer to the reconciliation table of net loss to adjusted loss from operations). This decrease was primarily driven by the increase in total revenue of $56.6 million and a $24.3 million improvement in subscriber acquisition costs which more than offset an increase in revenue share and royalties.

Satellite and transmission expenses for the second quarter 2008 remained consistent with the second quarter of 2007 at $6.7 million.

Programming and content expenses increased $1.0 million to $54.1 million for the second quarter of 2008 from $53.1 million for the second quarter of 2007. The increase was primarily attributable to license fees associated with new programming and higher compensation-related costs for additions to headcount.

Revenue share and royalties increased $19.9 million to $49.7 million for the second quarter of 2008 from $29.8 million for the second quarter of 2007. The increase was attributable to the determination by the Copyright Royalty Board in January 2008 of the royalty rate under the statutory license covering the performance of sound recordings. The 25% growth in the company's revenues also contributed to the increase in revenue share and royalties.

Customer service and billing expenses increased $1.2 million to $22.6 million for the second quarter of 2008 from $21.4 million for the second quarter of 2007. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in our subscriber base and respective transaction fees. Customer service and billing expenses, as adjusted, per average subscriber declined 18% to $0.86 for the second quarter of 2008 from $1.05 for the second quarter of 2007, due to efficiencies across a larger subscriber base.

Sales and marketing expenses increased $2.7 million to $46.7 million for the second quarter of 2008 from $44.0 million for the second quarter of 2007. This increase was primarily attributable to equipment related retention costs associated with efforts to retain existing subscribers that we believe will result in higher revenue and lower churn. This was offset by lower consumer advertising and reduced cooperative marketing spend with the company's channel partners.

Subscriber acquisition costs (SAC) decreased $24.3 million or 23% to $81.4 million for the second quarter of 2008 from $105.7 million for the second quarter of 2007. This decrease was primarily attributable to lower retail and OEM subsidies due to better product economics.

SAC per gross subscriber addition decreased 27% to $78 for the second quarter of 2008 from $107 for the second quarter of 2007. This decrease was primarily attributable to lower retail and OEM subsidies due to better product economics.

General and administrative expenses increased $3.7 million to $31.0 million for the second quarter of 2008 from $27.3 million for the second quarter of 2007. The increase was primarily the result of higher litigation costs and compensation-related costs to support the growth of the business.

Engineering, design and development expenses decreased $2.3 million to $8.0 million for the second quarter of 2008 from $10.3 million for the second quarter of 2007. This decrease was attributable to reduced OEM and product developments costs.

SIRIUS reported a net loss of ($83.9) million, or ($0.06) per share, for the second quarter of 2008, compared to a net loss of ($134.1) million, or ($0.09) per share, in the second quarter of 2007. The adjusted net loss per share, or net loss per share excluding stock-based compensation was ($0.05) in the second quarter of 2008 as compared to an adjusted net loss per share of ($0.08) in the second quarter of 2007 (refer to the reconciliation table of net loss per share to adjusted net loss per share).

SIX MONTHS ENDED JUNE 30, 2008 VERSUS SIX MONTHS ENDED JUNE 30, 2007

For the six months ended June 30, 2008, SIRIUS recognized total revenue of $553.4 million compared with $430.5 million for the six months ended June 30, 2007. This 29%, or $122.9 million increase in revenue, was primarily driven by a $121.7 million increase in subscriber revenue, resulting from the net increase in subscribers of 1,781,601 from the end of the second quarter of 2007.

The company's adjusted loss from operations decreased $100.1 million to ($63.2) million for the six months ended June 30, 2008 from ($163.3) million for the six months ended June 30, 2007 (refer to the reconciliation table of net loss to adjusted loss from operations). This decrease was driven by a 29%, or $122.9 million, increase in total revenue which more than offset the 3%, or $21.9 million, increase in operating expenses.

Satellite and transmission expenses decreased $0.3 million to $13.7 million for the six months ended June 30, 2008 from $14.0 million for the six months ended June 30, 2007.

Programming and content expenses increased $2.8 million to $113.0 million for the six months ended June 30, 2008 from $110.2 million for the six months ended June 30, 2007. The increase was primarily attributable to license fees associated with new programming and higher compensation-related costs for additions to headcount.

Revenue share, royalties and residuals increased $35.0 million to $92.0 million for the six months ended June 30, 2008 from $57.0 million for the six months ended June 30, 2007.

The increase was attributable to the determination by the Copyright Royalty Board in January 2008 of the royalty rate under the statutory license covering the performance of sound recordings. The 29% growth in the company's revenues also contributed to the increase in revenue share and royalties.

Customer service and billing expenses increased $6.1 million to $49.2 million for the six months ended June 30, 2008 from $43.1 million for the six months ended June 30, 2007. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in our subscriber base. Customer service and billing expenses, as adjusted, per average subscriber declined 13% to $0.96 for the six months ended June 30, 2008 from $1.10 for the six months ended June 30, 2007, due to efficiencies across a larger subscriber base.

Sales and marketing expenses increased $0.5 million to $79.9 million for the six months ended June 30, 2008 from $79.4 million for the six months ended June 30, 2007.

This increase was primarily attributable to equipment related retention costs associated with efforts to retain existing subscribers that we believe will result in higher revenue and lower churn. This was offset by lower consumer advertising and reduced cooperative marketing spend with the company's channel partners.

Subscriber acquisition costs (SAC) decreased $32.7 million to $171.2 million for the six months ended June 30, 2008 from $203.9 million for the six months ended June 30, 2007. This decrease was primarily attributable to lower retail and OEM subsidies due to better product economics.

SAC per gross subscriber addition decreased 19% to $84 for the six months ended June 30, 2008 from $104 for the six months ended June 2007. This decrease was primarily driven by lower retail and OEM subsidies due to better product economics.

General and administrative expenses increased $17.1 million to $67.8 million for the six months ended June 30, 2008 from $50.7 million for the six months ended June 30, 2007. The increase was primarily a result of higher litigation related costs and compensation-related costs to support the growth of the business.

Engineering, design and development expenses decreased $6.2 million to $15.5 million for the six months ended June 30, 2008 from $21.7 million for the six months ended June 30, 2007. This decrease was attributable to reduced OEM and product developments costs.

SIRIUS reported a net loss of ($188.0) million, or ($0.13) per share, for the six months ended June 30, 2008, compared with a net loss of ($278.9) million, or ($0.19) per share, for the six months ended June 30, 2007. The adjusted net loss per share, or net loss per share excluding stock-based compensation was ($0.10) for the six months ended June 30, 2008 compared with an adjusted net loss per share excluding stock based compensation of ($0.16) for the six months ended June 30, 2007 (refer to the reconciliation table of net loss per share to adjusted net loss per share).



                 SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
                           SUBSCRIBER DATA, METRICS
                     AND OTHER NON-GAAP FINANCIAL MEASURES
                (Dollars in thousands, unless otherwise stated)
                                  (Unaudited)

    Subscriber Data:
                                For the Three Months   For the Six Months
                                   Ended June 30,        Ended June 30,
                                  2008       2007       2008       2007

     Beginning subscribers     8,644,319  6,581,045  8,321,785  6,024,555
     Net additions               279,820    561,493    602,354  1,117,983
       Ending subscribers      8,924,139  7,142,538  8,924,139  7,142,538

       Retail                  4,676,814  4,364,646  4,676,814  4,364,646
       OEM                     4,231,428  2,758,639  4,231,428  2,758,639
       Hertz                      15,897     19,253     15,897     19,253
     Ending subscribers        8,924,139  7,142,538  8,924,139  7,142,538

       Retail                     33,599    129,843     36,105    322,821
       OEM                       244,610    434,955    565,796    799,629
       Hertz                       1,611     (3,305)       453     (4,467)
     Net additions               279,820    561,493    602,354  1,117,983

     Metrics:
                                For the Three Months   For the Six Months
                                   Ended June 30,        Ended June 30,
                                  2008       2007       2008       2007
     Gross subscriber
      additions                1,029,287  1,002,145  2,032,709  1,990,603
     Deactivated subscribers     749,467    440,652  1,430,355    872,620
     Average monthly churn
      (1)(6)                        2.8%       2.1%       2.8%       2.2%
     SAC per gross subscriber
      addition (2)(6)                $78       $107        $84       $104
     Customer service and
      billing expenses per
      average subscriber
      (3)(6)                       $0.86      $1.05      $0.96      $1.10
     Total revenue              $283,017   $226,427   $553,367   $430,464
     Free cash flow (4)(6)      $(31,087)  $(80,031) $(217,622) $(226,746)

     Monthly ARPU: (5)(6)
       Average monthly
        subscriber revenue per
        subscriber before the
        effects of Hertz
        subscribers and
        rebates                   $10.14     $10.24     $10.12     $10.26
       Effects of Hertz
        subscribers                 0.06       0.05       0.05       0.05
       Effects of rebates          (0.03)     (0.03)     (0.04)     (0.13)
       Average monthly
        subscriber revenue per
        subscriber                 10.17      10.26      10.13      10.18
       Average monthly net
        advertising revenue
        per subscriber              0.32       0.45       0.32       0.41
       ARPU                       $10.49     $10.71     $10.45     $10.59



                    SIRIUS XM RADIO INC. AND SUBSIDIARIES
                           SUBSCRIBER DATA, METRICS
              AND OTHER NON-GAAP FINANCIAL MEASURES - CONTINUED
               (Dollars in thousands, unless otherwise stated)
                                 (Unaudited)

    Adjusted Loss from Operations:

                         For the Three Months      For the Six Months
                            Ended June 30,           Ended June 30,
                         2008          2007        2008          2007

     Net loss          $(83,899)  $(134,147)    $(188,017)    $(278,892)
      Depreciation       27,113      26,284        54,019        53,070
      Stock-based
       compensation      17,151      17,017        39,413        41,277
      Other income
       and expense       15,307      10,992        30,258        20,137
      Income tax
       expense              543         555         1,086         1,110
     Adjusted loss
      from
      operations (7)   $(23,785)   $(79,299)     $(63,241)    $(163,298)

     Adjusted Net Loss and Adjusted Net Loss per Share:

                        For the Three Months       For the Six Months
                           Ended June 30,            Ended June 30,
                          2008        2007          2008         2007

     Net loss          $(83,899)  $(134,147)    $(188,017)    $(278,892)
        Stock-based
         compensation    17,151      17,017        39,413        41,277
     Adjusted net
      loss             $(66,748)  $(117,130)    $(148,604)    $(237,615)
     Net loss per
      share (basic
      and diluted)       $(0.06)     $(0.09)       $(0.13)       $(0.19)
        Stock-based
         compensation      0.01        0.01          0.03          0.03
     Adjusted net
      loss per
      share (basic
      and diluted) (8)   $(0.05)     $(0.08)       $(0.10)       $(0.16)
     Weighted average
      common shares
      outstanding
      (basic and
       diluted)       1,499,723   1,462,362     1,487,610     1,459,701



                     SIRIUS XM RADIO INC. AND SUBSIDIARIES
                            SUBSCRIBER DATA, METRICS
                AND OTHER NON-GAAP FINANCIAL MEASURES - CONTINUED
                 (Dollars in thousands, unless otherwise stated)
                                   (Unaudited)

     Condensed Consolidated Statements of Operations:

                                For the Three Months   For the Six Months
                                   Ended June 30,        Ended June 30,
                                  2008       2007       2008       2007

      Total revenue             $283,017   $226,427   $553,367   $430,464
      Operating expenses
       (excludes depreciation
       and stock-based
       compensation shown
       separately below):
         Satellite and
          transmission             6,692      6,716     13,719     14,046
         Programming and content  54,087     53,096    112,991    110,159
         Revenue share and
          royalties               49,723     29,841     92,043     56,975
         Customer service and
          billing                 22,600     21,440     49,245     43,094
         Cost of equipment         6,647      7,386     14,234     13,843
         Sales and marketing      46,669     44,015     79,895     79,368
         Subscriber acquisition
          costs                   81,392    105,658    171,202    203,895
         General and
          administrative          31,010     27,308     67,790     50,711
         Engineering, design and
          development              7,982     10,266     15,489     21,671
         Depreciation             27,113     26,284     54,019     53,070
         Stock-based
          compensation            17,151     17,017     39,413     41,277
      Total operating expenses   351,066    349,027    710,040    688,109
      Loss from operations       (68,049)  (122,600)  (156,673)  (257,645)
        Other income (expense)   (15,307)   (10,992)   (30,258)   (20,137)
      Loss before income taxes   (83,356)  (133,592)  (186,931)  (277,782)
        Income tax expense          (543)      (555)    (1,086)    (1,110)
      Net loss                  $(83,899) $(134,147) $(188,017) $(278,892)


                    SIRIUS XM RADIO INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                   (In Thousands, except per share amounts)
                                 (Unaudited)

                                For the Three Months     For the Six Months
                                    Ended June 30,         Ended June 30,
                                  2008        2007        2008        2007
    Revenue:
       Subscriber revenue,
        including effects of
        rebates               $266,518    $209,635    $522,158    $400,431
       Advertising revenue,
        net of agency fees       8,332       9,177      16,740      15,898
       Equipment revenue         7,956       6,255      14,019      10,926
       Other revenue               211       1,360         450       3,209
    Total revenue              283,017     226,427     553,367     430,464
    Operating expenses
     (excludes depreciation
     shown separately
     below) (1):
       Cost of services:
          Satellite and
           transmission          7,451       7,337      15,275      15,323
          Programming and
           content              55,247      54,311     116,939     114,309
          Revenue share and
           royalties            49,723      29,841      92,043      56,975
          Customer service
           and billing          22,865      21,618      49,786      43,471
          Cost of equipment      6,647       7,386      14,234      13,843
       Sales and marketing      49,133      46,864      87,598      87,861
       Subscriber acquisition
        costs                   81,392     105,665     171,216     205,782
       General and
        administrative          42,467      38,471      91,246      73,814
       Engineering, design
        and development          9,028      11,250      17,684      23,661
       Depreciation             27,113      26,284      54,019      53,070
    Total operating expenses   351,066     349,027     710,040     688,109
       Loss from operations    (68,049)   (122,600)   (156,673)   (257,645)
    Other income (expense):
       Interest and
        investment income        1,425       4,753       4,227      10,795
       Interest expense, net
        of amounts
        capitalized            (16,745)    (15,750)    (34,421)    (30,942)
       Other income                 13           5         (64)         10
    Total other income
     (expense)                 (15,307)    (10,992)    (30,258)    (20,137)
       Loss before income
        taxes                  (83,356)   (133,592)   (186,931)   (277,782)
       Income tax expense         (543)       (555)     (1,086)     (1,110)
          Net loss            $(83,899)  $(134,147)  $(188,017)  $(278,892)
    Net loss per share
     (basic and diluted)        $(0.06)    $ (0.09)     $(0.13)     $(0.19)
    Weighted average common
     shares outstanding
     (basic and diluted)     1,499,723   1,462,362   1,487,610   1,459,701


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

    Satellite and transmission    $759        $621      $1,555      $1,277
     Programming and content     1,160       1,215       3,949       4,150
    Customer service and
     billing                       265         178         541         377
    Sales and marketing          2,464       2,849       7,704       8,493
    Subscriber acquisition
     costs                           -           7          14       1,887
    General and administrative  11,457      11,163      23,455      23,103
    Engineering, design and
     development                 1,046         984       2,195       1,990
    Total equity granted to
     third parties and
     employees                 $17,151     $17,017     $39,413     $41,277



                    SIRIUS XM RADIO INC. AND SUBSIDIARIES
                              BALANCE SHEET DATA
                                (In Thousands)

                                                 As of
                                      June 30,          December 31,
                                        2008                2007
                                     (Unaudited)
      Cash, cash equivalents and
       marketable securities          $220,598            $439,289
      Restricted investments            56,000              53,000
      Working capital                 (822,338)           (394,989)
      Total assets                   1,456,485           1,694,149
      Total debt                     1,279,867           1,314,418
      Total liabilities              2,363,604           2,486,886
      Accumulated deficit           (4,586,989)         (4,398,972)
      Stockholders' deficit           (907,119)           (792,737)



                    SIRIUS XM RADIO, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In Thousands)
                                 (Unaudited)

                                   For the Three Months   For the Six Months
                                      Ended June 30,        Ended June 30,
                                      2008      2007       2008       2007
     Cash flows from operating
      activities:
       Net loss                     $(83,899) $(134,147) $(188,017) $(278,892)
       Adjustments to reconcile net
        loss to net cash used in
        operating activities:
          Depreciation                27,113     26,284     54,019     53,070
          Non-cash interest expense      967        805      1,971      1,559
          Provision for doubtful
           accounts                    2,488      2,266      5,048      4,354
          (Gain) loss on disposal of
           assets                        -          110        -          106
          Stock-based compensation    17,151     17,017     39,413     41,277
          Deferred income taxes          543        555      1,086      1,110
       Changes in operating assets
        and liabilities:
          Accounts receivable         (6,931)   (12,029)    11,834     (5,390)
          Inventory                    1,728     (6,962)     5,921     (7,435)
          Receivables from
           distributors               (1,114)    (5,943)   (11,102)   (13,512)
          Prepaid expenses and other
           current assets                338     18,752     14,594      9,579
          Other long-term assets       2,143    (11,855)     5,399    (14,779)
          Accounts payable and
           accrued expenses           19,278     (3,300)   (97,463)   (51,111)
          Accrued interest            11,938     12,466         53        703
          Deferred revenue            12,163     38,538     26,875     60,269
          Other long-term
           liabilities                 4,305      1,543       (712)     9,245
              Net cash provided by
               (used in) operating
               activities              8,211    (55,900)  (131,081)  (189,847)
     Cash flows from investing
      activities:
        Additions to property and
         equipment                   (34,473)   (24,131)   (73,698)   (36,589)
        Sales of property and
         equipment                       -            1        -           97
        Purchases of restricted and
         other investments               -          -       (3,000)      (310)
        Sale of investments              -          -        5,000        -
        Merger related costs          (4,825)       -      (14,843)       -
        Sales of available-for-sale
         securities                       (4)        (4)         4     10,846
           Net cash (used in)
            investing activities     (39,302)   (24,134)   (86,537)   (25,956)
     Cash flows from financing
      activities:
        Long term borrowings            (625)   250,000     (1,250)   250,000
        Debt issuance costs              -       (4,801)       -       (4,801)
        Proceeds from exercise of
         stock options                  (659)       422        181      1,932
           Net cash (used in)
            provided by financing
            activities                (1,284)   245,621     (1,069)   247,131
     Net (decrease) increase in
      cash and cash equivalents      (32,375)   165,587   (218,687)    31,328
     Cash and cash equivalents at
      the beginning of period        252,508    259,162    438,820    393,421
     Cash and cash equivalents at
      the end of period             $220,133   $424,749   $220,133   $424,749



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

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

(1) SIRIUS defines average monthly churn as the average amount of deactivations for the quarter divided by the average subscriber balance for the quarter.

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


                                    For the Three Months   For the Six Months
                                       Ended June 30,        Ended June 30,
                                      2008       2007       2008       2007
           Subscriber acquisition
            costs                    $81,392   $105,665   $171,216   $205,782
           Less:  stock-based
            compensation                 -           (7)       (14)    (1,887)
           Add:  margin from
            direct sales of SIRIUS
            radios and accessories    (1,309)     1,131        215      2,917
           SAC                       $80,083   $106,789   $171,417   $206,812
           Gross subscriber
            additions              1,029,287  1,002,145  2,032,709  1,990,603
           SAC per gross
            subscriber                   $78       $107        $84       $104


(3) SIRIUS defines customer service and billing expenses per average subscriber as total customer service and billing expenses, excluding stock-based compensation, divided by the daily weighted average number of subscribers for the period. Customer service and billing expenses per average subscriber is calculated as follows:


                                    For the Three Months   For the Six Months
                                       Ended June 30,        Ended June 30,
                                      2008       2007       2008       2007

          Customer service and
           billing expenses          $22,865    $21,618    $49,786    $43,471
          Less:  stock-based
           compensation                 (265)      (178)      (541)      (377)
          Customer service and
           billing expenses,
           as adjusted               $22,600    $21,440    $49,245    $43,094

          Daily weighted average
           number of subscribers   8,739,766  6,811,750  8,593,054  6,554,943
          Customer service and
           billing expenses,
           as adjusted, per
           average subscriber          $0.86      $1.05      $0.96      $1.10


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


                                    For the Three Months  For the Six Months
                                        Ended June 30,       Ended June 30,
                                        2008      2007      2008       2007
          Net cash provided by (used
           in) operating activities    $8,211  $(55,900) $(131,081) $(189,847)
          Additions to property and
           equipment                  (34,473)  (24,131)   (73,698)   (36,589)
          Merger related costs         (4,825)      -      (14,843)       -
          Sales of investments            -         -        5,000        -
          Restricted and other
           investment activity            -         -       (3,000)      (310)
          Free cash flow             $(31,087) $(80,031) $(217,622) $(226,746)


(5) SIRIUS defines ARPU as the total earned subscriber revenue and net advertising revenue divided by the daily weighted average number of subscribers for the period. ARPU is calculated as follows:


                                   For the Three Months   For the Six Months
                                       Ended June 30,        Ended June 30,
                                      2008       2007       2008       2007

         Subscriber revenue         $266,518   $209,635   $522,158   $400,431
         Net advertising revenue       8,332      9,177     16,740     15,898
         Total subscriber and net
          advertising revenue       $274,850   $218,812   $538,898   $416,329
         Daily weighted average
          number of subscribers    8,739,766  6,811,750  8,593,054  6,554,943
         ARPU                         $10.49     $10.71     $10.45     $10.59


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

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

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

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

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

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

(8) SIRIUS refers to adjusted net loss as net loss per share excluding stock-based compensation expense. Adjusted net loss is not a measure of financial performance under GAAP. The company believes adjusted net loss is useful to investors to compare its operating performance to the performance of other communications, entertainment and media companies. The company also believes the exclusion of stock-based compensation expense is useful given the significant variation in expense that can result from changes in the fair market value of the company's common stock.

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

About SIRIUS XM Radio

SIRIUS XM Radio is America's satellite radio company delivering the "The Best Radio on Radio" to more than 18 million subscribers, including 100% commercial free music, and premier sports, news, talk, entertainment, traffic and weather.

SIRIUS XM Radio has exclusive content relationships with an array of personalities and artists, including Howard Stern, Oprah, Martha Stewart, Jimmy Buffett, Elvis, Jamie Foxx, Barbara Walters, Frank Sinatra, Opie & Anthony, The Grateful Dead, Willie Nelson, Bob Dylan, Dale Earnhardt Jr., 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, NASCAR, NHL, and PGA Tour, and broadcasts major college sports.

SIRIUS XM Radio has exclusive 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, Circuit City, 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 service for GPS navigation systems delivers real-time traffic information, including accidents and road construction, for more than 80 North American markets.

The guidance contained herein are based upon a number of assumptions and estimates that, while considered reasonable by us when taken as a whole, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, the guidance is based upon specific assumptions with respect to future business conditions, some or all of which will change. The guidance, like any forecast, is necessarily speculative in nature and it can be expected that the assumptions upon which the guidance is based will not prove to be valid or will vary from actual results. Actual results will vary from the guidance and the variations may be material. Consequently, the guidance should not be regarded as a representation by SIRIUS or any other person that the synergies, adjusted EBITDA and free cash flow will actually be achieved. You are cautioned not to place undue reliance on this information.

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 Satellite Radio Inc. and XM Satellite Radio Holdings Inc., 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 "anticipate," "believe," "plan," "estimate," "expect," "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: general business and economic conditions; the performance of financial markets and interest rates; the ability to obtain governmental approvals of the transaction on a timely basis; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; 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; and operating costs and business disruption following the merger, including adverse effects on employee retention and on our business relationships with third parties, including manufacturers of radios, retailers, automakers and programming providers. 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' and XM's Annual Reports on Form 10-K for the year ended December 31, 2007, 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
    pblalock@siriusradio.com

    Hooper Stevens
    SIRIUS XM Radio
    212 901 6718
    hstevens@siriusradio.com


SOURCE SIRIUS XM Radio

http://www.sirius.com/

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