August 4, 2010

SIRIUS XM Radio Reports Second Quarter 2010 Results

- Strong Double-Digit Revenue Growth Year Over Year - Adjusted EBITDA of $154 million, Up 17% Year Over Year - Company Raises Financial Guidance

NEW YORK, Aug 04, 2010 /PRNewswire via COMTEX News Network/ -- SIRIUS XM Radio (Nasdaq: SIRI) today announced second quarter 2010 financial and operating results, including:

  • $705.6 million of adjusted revenue, up 16% over second quarter 2009 adjusted revenue of $607.8 million; and
  • $154.3 million in second quarter 2010 adjusted EBITDA, an increase of 17% over second quarter 2009 adjusted EBITDA of $132.2 million.

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The discussion of adjusted operating results excludes the effects of stock-based compensation and certain purchase price accounting adjustments. Financial measures and metrics previously reported as "pro forma" have been renamed "adjusted."

"The sharp subscriber growth and double-digit increase in adjusted revenue and adjusted EBITDA show that we continued to execute on our business plan during the second quarter," said Mel Karmazin, Chief Executive Officer, SIRIUS XM. "Compared to the year ago quarter, gross additions increased by 46%, deactivations declined by 8%, and customers paid us on average 11% more each month - clearly showing just how much subscribers love our service. Free cash flow in the second quarter 2010 was $108.3 million compared to $12.7 million in the second quarter of 2009. Our business has improved substantially in the past year, and we look forward to a strong second half and 2011."

SIRIUS XM ended second quarter 2010 with a record-high 19,527,448 subscribers, an increase of more than 1.1 million subscribers compared to the end of second quarter 2009. Net subscriber additions of 583,249 in the second quarter of 2010 improved significantly from a net loss of 185,999 subscribers in the second quarter of 2009. In the second quarter 2010, average revenue per subscriber (ARPU) was $11.81, an increase of 11% from ARPU of $10.66 in the second quarter 2009. The company's self-pay monthly customer churn rate was 1.8% in the second quarter 2010, as compared with self-pay monthly customer churn of 2.0% in the second quarter 2009.

In June, the company completed the redemption of all of the $114 million of XM's outstanding 10% Senior PIK Secured Notes due 2011. "We will continue to examine deleveraging opportunities as they arise with the objective of decreasing interest expense and improving free cash flow." said David Frear, SIRIUS XM's Chief Financial Officer. "The combination of increased adjusted EBITDA and lower debt has improved our leverage ratio to approximately 4.6x, a historic low for our company."

On a GAAP basis, net income (loss) attributable to common stockholders for the second quarter of 2010 and 2009 was $15.3 million and ($159.6) million, respectively, or $0.00 and ($0.04) per diluted share, on revenue of $699.8 million and $590.8 million, respectively. The company's reported net income (loss) attributable to common stockholders included losses on extinguishment of debt in the second quarter of 2010 and 2009 of $31.9 million and $107.8 million, respectively. For the six months ended June 30, 2010 and 2009, net income (loss) attributable to common stockholders was $56.9 million and ($398.5) million, respectively, or $0.01 and ($0.11) per diluted share, on revenue of $1.36 billion and $1.18 billion, respectively.

INCREASED 2010 OUTLOOK

The company is increasing guidance for the full year 2010, projecting adjusted revenue will approach $2.8 billion and free cash flow will approach $150 million. SIRIUS XM continues to target approximately $575 million of adjusted EBITDA in 2010.

As previously announced, SIRIUS XM increased its guidance for net subscriber additions to approximately 1.1 million for the full year.

ADJUSTED RESULTS OF OPERATIONS

Subscriber Data.

The following table contains actual subscriber data for the three and six months ended June 30, 2010 and 2009, respectively:


                                For the Three Months     For the Six Months
                                        Ended                   Ended
                                       June 30,                June 30,
                                      --------                 --------
                                2010           2009        2010         2009
                                ----           ----        ----         ----

    Beginning
     subscribers          18,944,199      18,599,434  18,772,758   19,003,856
    Gross
     subscriber
     additions             2,020,507       1,380,125   3,741,355    2,719,086
    Deactivated
     subscribers          (1,437,258)     (1,566,124) (2,986,665)  (3,309,507)
    Net additions            583,249        (185,999)    754,690     (590,421)
                             -------        --------     -------     --------
    Ending
     subscribers          19,527,448      18,413,435  19,527,448   18,413,435
                          ==========      ==========  ==========   ==========

        Retail             7,277,446       8,235,761   7,277,446    8,235,761
        OEM               12,100,665      10,081,514  12,100,665   10,081,514
        Rental               149,337          96,160     149,337       96,160
    Ending
     subscribers          19,527,448      18,413,435  19,527,448   18,413,435
                          ==========      ==========  ==========   ==========

        Self-pay          16,077,714      15,421,414  16,077,714   15,421,414
        Paid
         promotional       3,449,734       2,992,021   3,449,734    2,992,021
    Ending
     subscribers          19,527,448      18,413,435  19,527,448   18,413,435
                          ==========      ==========  ==========   ==========

        Retail              (142,757)       (301,295)   (448,304)    (669,326)
        OEM                  709,226         123,165   1,169,713       85,561
        Rental                16,780          (7,869)     33,281       (6,656)
                              ------          ------      ------       ------
    Net additions            583,249        (185,999)    754,690     (590,421)
                             =======        ========     =======     ========

        Self-pay             304,043         (14,996)    373,782     (128,243)
        Paid
         promotional         279,206        (171,003)    380,908     (462,178)
    Net additions            583,249        (185,999)    754,690     (590,421)
                             =======        ========     =======     ========

    Daily weighted
     average number
     of subscribers       19,139,926      18,438,473  18,962,580   18,575,219
                          ==========      ==========  ==========   ==========

    Average self-
     pay monthly
     churn (1)                   1.8%            2.0%        1.9%         2.1%
                                 ===             ===         ===          ===

    Conversion rate
     (2)                        46.7%           44.3%       45.9%        44.5%
                                ====            ====        ====         ====

    See accompanying footnotes.


Subscribers. The improvement in net additions for the three months ended June 30, 2010 was due to the 46% increase in gross subscriber additions, primarily resulting from an improvement in U.S. auto sales, and the 8% decline in deactivations resulting from improvements in the conversion rate in paid promotional trials and the average self-pay monthly churn.

Average Self-pay Monthly Churn decreased in the three months ended June 30, 2010 due to an improving economy, the success of retention and win-back programs and reductions in non-pay cancellations.

Conversion Rate increased in the three months ended June 30, 2010 primarily due to marketing to promotional period subscribers and an improving economy.

Metrics.

The following table contains our key operating metrics based on our adjusted results of operations for the three and six months ended June 30, 2010 and 2009, respectively (in thousands, except for per subscriber amounts):


                                         Unaudited Adjusted
                                         ------------------
                             For the Three Months        For the Six Months
                                    Ended                       Ended
                                  June 30,                    June 30,
                                                              --------
                               2010       2009          2010           2009
                               ----       ----          ----           ----

    ARPU (3)                 $11.81     $10.66        $11.65         $10.57
    SAC, per gross
     subscriber addition
     (4)                        $59        $57           $59            $59
    Customer service and
     billing expenses, per
     average
      subscriber (5)          $1.01      $1.05         $1.00          $1.06
    Free cash flow (6)     $108,331    $12,694      $(18,872)        $9,048
    Adjusted total revenue
     (8)                   $705,560   $607,836    $1,376,122     $1,213,317
    Adjusted EBITDA (7)    $154,313   $132,219      $312,070       $241,055



    See accompanying footnotes.

ARPU increased in the three months ended June 30, 2010 primarily due to the inclusion of the U.S. Music Royalty Fee, increased revenues from the sale of "Best of" programming, rate increases on multi-subscription and internet packages, and increased net advertising revenue.

SAC Per Gross Subscriber Addition increased in the three months ended June 30, 2010 due to the 103% increase in OEM production with factory-installed satellite radios compared to the 46% increase in gross additions, partially offset by lower per radio subsidy rates for certain OEMs and growth in subscriber reactivations and royalties from satellite radio manufacturers.

Customer Service and Billing Expenses Per Average Subscriber decreased in the three months ended June 30, 2010 primarily due to a lower call center expense as a result of moving calls to lower cost locations.

Free Cash Flow increased in the three months ended June 30, 2010 principally as a result of improvements in our adjusted EBITDA as well as increases in trade payables related to subsidies and commissions associated with the increase in our subscriber base and growth in deferred revenue; partially offset by growth in receivables from subscribers, radio manufacturers and distributors and the payment of related party obligations and accrued interest. In addition, capital expenditures in the three months ended June 30, 2010 increased by $13.7 million compared to the three months ended June 30, 2009, primarily due to increased satellite and related launch vehicle spending.

Adjusted Total Revenue. Set forth below are our adjusted total revenue for the three and six months ended June 30, 2010 compared with the three and six months ended June 30, 2009. Our adjusted total revenue includes the recognition of deferred subscriber revenues acquired in the merger of SIRIUS and XM that are not recognized in our post-merger results under purchase price accounting and the elimination of the benefit in earnings from deferred revenue associated with our investment in Canadian Satellite Radio acquired in the merger.


                                         Unaudited Adjusted
                                         ------------------
                               For the Three            For the Six Months
                                Months Ended                   Ended
                                 June 30,                    June 30,
                                 --------                    --------
    (in thousands)           2010       2009          2010            2009
                             ----       ----          ----            ----

    Revenue:
        Subscriber
         revenue,
         including
         effects of
         rebates         $605,616   $576,958    $1,190,091      $1,153,034
        Advertising
         revenue, net of
         agency fees       15,797     12,564        30,323          24,869
        Equipment
         revenue           18,520     10,928        32,802          20,837
        Other revenue      65,627      7,386       122,906          14,577
                           ------      -----       -------          ------
    Adjusted total
     revenue             $705,560   $607,836    $1,376,122      $1,213,317
                         ========   ========    ==========      ==========


For the three months ended June 30, 2010, the increase in subscriber revenue was driven by the increase in subscribers as well as an increase in the sale of "Best of" programming and the rate increases on multi-subscription and internet packages. The increase in advertising revenue was driven by improvements in the national market for advertising and increases in our share of the market. The increase in equipment revenue was driven by royalties from increased OEM installations. The increase in other revenue was driven by the introduction of the U.S. Music Royalty Fee in the third quarter of 2009.

Adjusted EBITDA. Set forth below are our adjusted EBITDA for the three and six months ended June 30, 2010 compared with the three and six months ended June 30, 2009. Adjusted EBITDA is income (loss) from operations, excluding, if applicable: goodwill impairment; restructuring, impairments and related costs; depreciation and amortization; purchase price accounting adjustments and share-based payment expense.


                                 Unaudited Adjusted
                                 ------------------
                               For the Three     For the Six Months
                                Months Ended           Ended
                                 June 30,            June 30,
                                                     --------
    (in thousands)           2010           2009       2010          2009
                             ----           ----       ----          ----

    Total revenue        $705,560       $607,836 $1,376,122    $1,213,317
    Operating
     expenses:
        Revenue share
         and royalties    134,318        117,671    257,857       238,932
        Programming and
         content           83,931         87,707    174,402       184,386
        Customer service
         and billing       57,763         58,054    113,340       117,723
        Satellite and
         transmission      19,235         18,659     38,622        38,401
        Cost of
         equipment          7,805          8,051     15,724        16,044
        Subscriber
         acquisition
         costs            130,683         80,988    237,728       164,698
        Sales and
         marketing         57,076         48,610    107,018        99,212
        Engineering,
         design and
         development        9,635         10,123     19,462        18,535
        General and
         administrative    50,801         45,754     99,899        94,331
    Total operating
     expenses             551,247        475,617  1,064,052       972,262
                          -------        -------  ---------       -------
    Adjusted EBITDA      $154,313       $132,219   $312,070      $241,055
                         ========       ========   ========      ========


For the three months ended June 30, 2010, the increase in adjusted EBITDA was primarily due to an increase in revenues, the increase in our subscriber base and the inclusion of the U.S. Music Royalty Fee, as well as increased advertising and equipment revenue, rate increases on multi-subscription and internet packages, and an increase in the sale of "Best of" programming, partially offset by an increase in expenses, which was primarily driven by higher subscriber acquisition costs related to the 46% increase in gross additions, higher revenue share and royalties expenses associated with growth in revenues subject to revenue sharing and royalty arrangements and additional sales and marketing costs, primarily related to co-operative marketing.


                             SIRIUS XM RADIO INC. AND SUBSIDIARIES
                        UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

                             For the Three Months           For the Six Months
                              Ended June 30,                  Ended June 30,
                              --------------                  --------------
    (in
     thousands,
     except
     per
     share
     data)                    2010         2009         2010         2009
                              ----         ----         ----         ----

    Revenue:
         Subscriber
         revenue,
         including
         effects
         of
         rebates          $601,630     $561,763   $1,181,139   $1,121,151
         Advertising
         revenue,
         net of
         agency
         fees               15,797       12,564       30,323       24,869
         Equipment
         revenue            18,520       10,928       32,802       20,837
        Other
         revenue            63,814        5,574      119,280       10,951
                            ------        -----      -------       ------
    Total
     revenue               699,761      590,829    1,363,544    1,177,808
     Operating
     expenses
     (depreciation
     and
     amortization
        shown
         separately
         below):
        Cost of
         services:
           Revenue
            share
            and
            royalties      107,901       95,831      206,085      196,297
            Programming
            and
            content         72,019       72,102      150,452      152,511
            Customer
            service
            and
            billing         58,414       58,833      114,625      119,041
            Satellite
            and
            transmission    19,982       19,615       40,100       39,894
           Cost of
            equipment        7,805        8,051       15,724       16,044
         Subscriber
         acquisition
         costs             110,383       67,651      199,762      140,719
        Sales
         and
         marketing          56,177       48,693      105,294      100,116
         Engineering,
         design
         and
         development        11,247       11,944       22,684       21,723
        General
         and
         administrative     59,166       66,716      116,746      126,031
         Depreciation
         and
         amortization       69,230       77,158      139,495      159,524

         Restructuring,
         impairments
         and
         related
         costs               1,803       27,000        1,803       27,614
                             -----       ------        -----       ------
    Total
     operating
     expenses              574,127      553,594    1,112,770    1,099,514
                           -------      -------    ---------    ---------
        Income
         from
         operations        125,634       37,235      250,774       78,294
    Other
     income
     (expense):
         Interest
         expense,
         net of
         amounts
         capitalized       (76,802)     (98,080)    (154,670)    (166,058)
        Loss on
         extinguishment
         of
         debt
         and
         credit
         facilities,
         net               (31,871)    (107,756)     (34,437)    (125,713)
         Interest
         and
         investment
         income
         (loss)                378        9,323       (2,892)       2,157
        Other
         (loss)
         income               (601)         749          728        1,259
    Total
     other
     expense              (108,896)    (195,764)    (191,271)    (288,355)
                          --------     --------     --------     --------
        Income
         (loss)
         before
         income
         taxes              16,738     (158,529)      59,503     (210,061)
        Income
         tax
         expense            (1,466)      (1,115)      (2,633)      (2,229)

           Net
            income
            (loss)          15,272     (159,644)      56,870     (212,290)
         Preferred
         stock
         beneficial
         conversion
         feature                 -            -            -     (186,188)
           Net
            income
            (loss)
            attributable
            to
            common
            stockholders   $15,272     $(159,644)    $56,870    $(398,478)
                           =======     =========     =======     =========
    Net
     income
     (loss)
     per
     common
     share:
        Basic                $0.00       $(0.04)       $0.02       $(0.11)
                             =====       ======        =====       ======
        Diluted              $0.00       $(0.04)       $0.01       $(0.11)
                             =====       ======        =====       ======

     Weighted
     average
     common
     shares
     outstanding:
        Basic            3,683,595    3,586,742    3,682,750    3,555,489
                         =========    =========    =========    =========
        Diluted          6,363,955    3,586,742    6,357,507    3,555,489
                         =========    =========    =========    =========

                           SIRIUS XM RADIO INC. AND SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS


                                                      June 30,     December
                                                         2010      31, 2009
                                                     ---------      --------
    (in thousands, except share and per
     share data)                                    (unaudited)
                              ASSETS
    Current assets:
      Cash and cash equivalents                         $258,854     $383,489
      Accounts receivable, net                           113,341      113,580
      Receivables from distributors                       83,208       48,738
      Inventory, net                                      13,726       16,193
      Prepaid expenses                                   193,440      100,273
      Related party current assets                         5,442      106,247
      Deferred tax asset                                  77,570       72,640
      Other current assets                                14,591       18,620
                                                          ------       ------
         Total current assets                            760,172      859,780
    Property and equipment, net                        1,765,347    1,711,003
    Long-term restricted investments                       3,396        3,400
    Deferred financing fees, net                          59,224       66,407
    Intangible assets, net                             2,661,001    2,695,115
    Goodwill                                           1,834,856    1,834,856
    Related party long-term assets                        28,416      111,767
    Other long-term assets                                88,520       39,878
                                                          ------       ------
           Total assets                               $7,200,932   $7,322,206
                                                      ==========   ==========
               LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable and accrued expenses             $519,181     $543,686
      Accrued interest                                    68,541       74,566
      Current portion of deferred revenue              1,169,090    1,083,430
      Current portion of deferred credit on
       executory contracts                               263,998      252,831
      Current maturities of long-term debt                 8,280       13,882
      Related party current liabilities                   12,781      108,246
                                                          ------      -------
           Total current liabilities                   2,041,871    2,076,641
    Deferred revenue                                     275,212      255,149
    Deferred credit on executory contracts               647,691      784,078
    Long-term debt                                     2,662,144    2,799,702
    Long-term related party debt                         357,806      263,579
    Deferred tax liability                               947,468      940,182
    Related party long-term liabilities                   26,655       46,301
    Other long-term liabilities                           61,657       61,052
                                                          ------       ------
           Total liabilities                           7,020,504    7,226,684
                                                       ---------    ---------

    Commitments and contingencies
    Stockholders' equity:
      Preferred stock, par value $0.001;
       50,000,000 authorized at June 30, 2010
       and December 31, 2009:
        Series A convertible preferred stock
         (liquidation preference of $51,370 at
         June 30, 2010 and
         December 31, 2009); 24,808,959 shares
          issued and outstanding at June 30,
          2010
         and December 31, 2009                                25           25
        Convertible perpetual preferred stock,
         series B (liquidation preference of
         $13 at June 30, 2010
         and December 31, 2009); 12,500,000
          shares issued and outstanding at June
          30, 2010
         and December 31, 2009                                13           13
        Convertible preferred stock, series C
         junior; no shares issued and
         outstanding at
         June 30, 2010 and December 31, 2009                   -            -
      Common stock, par value $0.001;
       9,000,000,000 shares authorized at
       June 30, 2010 and
        December 31, 2009; 3,885,905,912 and
         3,882,659,087 shares issued and
         outstanding
        at June 30, 2010 and December 31, 2009,
         respectively                                      3,885        3,882
      Accumulated other comprehensive loss,
       net of tax                                         (5,987)      (6,581)
      Additional paid-in capital                      10,379,730   10,352,291
      Accumulated deficit                            (10,197,238) (10,254,108)
                                                     -----------  -----------
           Total stockholders' equity                    180,428       95,522
                                                         -------       ------
           Total liabilities and stockholders'
            equity                                    $7,200,932   $7,322,206
                                                      ==========   ==========


                        SIRIUS XM RADIO INC. AND SUBSIDIARIES
                   UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                     For the Six Months
                                                       Ended June 30,
    (in thousands)                                      2010            2009
                                                        ----            ----

    Cash flows from operating
     activities:
        Net income (loss)                            $56,870       $(212,290)
        Adjustments to reconcile net
         income (loss) to net cash
         provided by operating activities:
           Depreciation and amortization             139,495         159,524
           Non-cash interest expense, net of
            amortization of premium                   22,294          31,322
           Provision for doubtful accounts            15,756          16,278
           Restructuring, impairments and
            related costs                              1,803          27,614
           Amortization of deferred income
            related to equity method
            investment                                (2,137)         (1,388)
           Loss on extinguishment of debt and
            credit facilities, net                    34,437         125,713
           Loss on investments                         6,065           6,353
           Loss on disposal of assets                    (18)              -
           Share-based payment expense                33,083          49,878
           Deferred income taxes                       2,633           2,229
           Other non-cash purchase price
            adjustments                             (120,706)        (85,223)
           Changes in operating assets and
            liabilities:
              Accounts receivable                    (14,296)          8,483
              Receivables from distributors          (26,655)         12,277
              Inventory                                2,467          (3,424)
              Related party assets                      (701)         11,629
              Prepaid expenses and other current
               assets                                 10,245          24,052
              Other long-term assets                  10,947          34,476
              Accounts payable and accrued
               expenses                              (76,144)       (106,041)
              Accrued interest                        (4,796)            997
              Deferred revenue                       105,004          22,504
              Related party liabilities              (54,978)         14,060
              Other long-term liabilities                319          (2,164)
                                                         ---          ------
                     Net cash provided by operating
                      activities                     140,987         136,859
                                                     -------         -------

    Cash flows from investing
     activities:
        Additions to property and
         equipment                                  (169,313)       (127,811)
        Sale of restricted and other
         investments                                   9,454               -
                                                       -----             ---
                     Net cash used in investing
                      activities                    (159,859)       (127,811)
                                                    --------        --------

    Cash flows from financing
     activities:
        Preferred stock issuance, net of
         costs                                             -          (3,712)
        Long-term borrowings, net of
         costs                                       637,406         384,876
        Related party long-term
         borrowings, net of costs                    147,094         316,340
        Payment of premiums on redemption
         of debt                                     (24,065)        (16,572)
        Repayment of long-term borrowings           (810,977)       (427,871)
        Repayment of related party long-
         term borrowings                             (55,221)       (100,867)
                                                     -------        --------
                     Net cash (used in) provided by
                      financing activities          (105,763)        152,194
                                                    --------         -------
    Net (decrease) increase in cash
     and cash equivalents                           (124,635)        161,242
    Cash and cash equivalents at
     beginning of period                             383,489         380,446
    Cash and cash equivalents at end
     of period                                      $258,854        $541,688
                                                    ========        ========


Footnotes to Adjusted Results of Operations

Average self-pay monthly churn; conversion rate; ARPU; SAC per gross subscriber addition; customer service and billing expenses, per average subscriber; and free cash flow are not measures of financial performance under GAAP. We believe these operational and Non-GAAP financial performance 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 believe that investors also use our current and projected metrics to monitor the performance of our business and to make investment decisions.

These operational and Non-GAAP financial performance measures are used in addition to and in conjunction with results presented in accordance with GAAP. These Non-GAAP financial performance 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.

(1) Average self-pay monthly churn represents the monthly average of self-pay deactivations for the quarter divided by the average self-pay subscriber balance for the quarter.

(2) We measure the percentage of vehicle owners and lessees 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 satellite radio enabled vehicles are sold or leased, the owners or lessees generally receive between three and twelve month trial subscriptions. 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 vehicle owners and lessees to respond to our marketing communications and become self-paying subscribers.

(3) ARPU is derived from total earned subscriber revenue, net advertising revenue and other subscription-related revenue, net of purchase price accounting adjustments, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. Other subscription-related revenue includes amounts recognized on account of the U.S. Music Royalty Fee since the third quarter of 2009. Purchase price accounting adjustments include the recognition of deferred subscriber revenues not recognized in purchase price accounting. ARPU is calculated as follows (in thousands, except for subscriber and per subscriber amounts):


                                    Unaudited
                                    ---------
                          For the Three Months  For the Six Months
                                 Ended                Ended
                             June 30,               June 30,
                             --------               --------
                           2010             2009       2010          2009
                           ----             ----       ----          ----

    Subscriber
     revenue (GAAP)    $601,630         $561,763 $1,181,139    $1,121,151
    Net advertising
     revenue (GAAP)      15,797           12,564     30,323        24,869
    Other
     subscription-
     related revenue
     (GAAP)              56,694                -    104,641             -
    Purchase price
     accounting
     adjustments          3,986           15,195      8,952        31,883
                          -----           ------      -----        ------
                       $678,107         $589,522 $1,325,055    $1,177,903

    Daily weighted
     average number
     of subscribers  19,139,926       18,438,473 18,962,580    18,575,219
                     ----------       ---------- ----------    ----------
    ARPU                 $11.81           $10.66     $11.65        $10.57
                         ======           ======     ======        ======


(4) SAC, 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 and purchase price accounting adjustments, divided by the number of gross subscriber additions for the period. Purchase price accounting adjustments include the elimination of the benefit of amortization of deferred credits on executory contracts recognized at the merger date attributable to third party arrangements with an OEM. SAC, per gross subscriber addition is calculated as follows (in thousands, except for subscriber and per subscriber amounts):


                                            Unaudited
                                            ---------
                           For the Three Months         For the Six Months
                                  Ended                       Ended
                              June 30,                      June 30,
                              --------                      --------
                           2010           2009           2010           2009
                           ----           ----           ----           ----

    Subscriber
     acquisition
     costs (GAAP)      $110,383        $67,651       $199,762       $140,719
    Less: margin from
     direct sales of
     radios and
      accessories
       (GAAP)           (10,715)        (2,877)       (17,078)        (4,793)
    Add: purchase
     price accounting
     adjustments         20,300         13,337         37,966         23,979
                         ------         ------         ------         ------
                       $119,968        $78,111       $220,650       $159,905

    Gross subscriber
     additions        2,020,507      1,380,125      3,741,355      2,719,086
    SAC, per gross
     subscriber
     addition               $59            $57            $59            $59
                            ===            ===            ===            ===


(5) Customer service and billing expenses, per average subscriber is derived from total customer service and billing expenses, excluding share-based payment expense and purchase price accounting adjustments, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. We believe the exclusion of share-based payment expense in our calculation of 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 our common stock, the effect of which is unrelated to the operational conditions that give rise to variations in the components of our customer service and billing expenses. Purchase price accounting adjustments include the elimination of the benefit associated with share-based payment arrangements recognized at the merger date. Customer service and billing expenses, per average subscriber is calculated as follows (in thousands, except for subscriber and per subscriber amounts):


                                     Unaudited
                                     ---------
                         For the Three Months   For the Six Months
                                Ended                 Ended
                             June 30,                June 30,
                             --------                --------
                           2010             2009        2010          2009
                           ----             ----        ----          ----

    Customer service
     and billing
     expenses (GAAP)    $58,414          $58,833    $114,625      $119,041
    Less: share-
     based payment
     expense, net of
     purchase
    price accounting
     adjustments           (729)            (905)     (1,457)       (1,561)
    Add: purchase
     price
     accounting
     adjustment              78              126         172           243
                            ---              ---         ---           ---
                        $57,763          $58,054    $113,340      $117,723

    Daily weighted
     average number
     of subscribers  19,139,926       18,438,473  18,962,580    18,575,219
                     ----------       ----------  ----------    ----------
    Customer service
     and billing
     expenses, per
     average
        subscriber        $1.01            $1.05       $1.00         $1.06
                          =====            =====       =====         =====


(6) Free cash flow is calculated as follows (in thousands):


                                           Unaudited
                                           ---------
                                  For the Three Months For the Six Months
                                          Ended              Ended
                                      June 30,             June 30,
                                      --------             --------
                                  2010           2009      2010          2009
                                  ----           ----      ----          ----

    Net cash provided by
     operating activities     $178,675        $69,988  $140,987      $136,859
    Additions to property and
     equipment                (70,348)        (56,671) (169,313)     (127,811)
    Merger related costs             -           (623)        -             -
    Restricted and other
     investment activity             4              -     9,454             -
    Free cash flow            $108,331        $12,694  $(18,872)       $9,048
                              ========        =======  ========        ======


(7) Adjusted EBITDA is a Non-GAAP financial performance measure that excludes (if applicable): (i) certain adjustments as a result of the purchase price accounting for the merger, (ii) goodwill impairment, (iii) restructuring, impairments, and related costs, (iv) depreciation and amortization and (v) share-based payment expense. The purchase price accounting adjustments include: (i) the elimination of deferred revenue associated with the investment in Canadian Satellite Radio, (ii) recognition of deferred subscriber revenues not recognized in purchase price accounting, and (iii) elimination of the benefit of deferred credits on executory contracts, which are primarily attributable to third party arrangements with an OEM and programming providers. We believe adjusted EBITDA is a useful measure of our operating performance. This measure is one of the primary Non-GAAP financial measures on which we (i) evaluate the performance of our businesses, (ii) base our internal budgets and (iii) compensate management. We believe investors find this Non-GAAP financial measure useful when analyzing our results and comparing our operating performance to the performance of other communications, entertainment and media companies. We believe that investors use current and projected adjusted EBITDA 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 adjusted results of operations reflect significant charges for depreciation expense. We believe adjusted EBITDA provides useful information about the operating performance of our business apart from the costs associated with our physical plant. The exclusion of depreciation and amortization expense is useful given significant variation in depreciation and amortization expense that can result from the 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 restructuring, impairments and related costs is useful given the nature of these expenses. We also believe the exclusion of share-based payment expense is useful given the significant variation in expense that can result from changes in the fair market value of our common stock.

Adjusted EBITDA has certain limitations in that it does not take into account the impact to our statement of operations of certain expenses, including share-based payment expense and certain purchase price accounting for the merger. We endeavor to compensate for the limitations of the Non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the Non-GAAP measure. Investors that wish to compare and evaluate our operating results after giving effect for these costs, should refer to net income (loss) as disclosed in our consolidated statements of operations. Since adjusted EBITDA is a Non-GAAP financial performance measure, our calculation of adjusted EBITDA 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 net income (loss) to the adjusted EBITDA is calculated as follows (see footnote 8 for reconciliation of the adjusted amounts to their respective GAAP amounts) (in thousands):


                                      Unaudited
                                      ---------
                           For the Three Months For the Six Months
                                     Ended             Ended
                                 June 30,            June 30,
                                 --------            --------
                              2010            2009      2010         2009
                              ----            ----      ----         ----

    Net income (loss)
     (GAAP):               $15,272       $(159,644)  $56,870    $(212,290)
    Add back items
     excluded from
     Adjusted EBITDA:
      Purchase price
       accounting
       adjustment          (59,058)        (40,177) (114,889)     (76,878)
      Depreciation and
       amortization         69,230          77,158   139,495      159,524
      Restructuring,
       impairments and
       related costs         1,803          27,000     1,803       27,614
      Share-based
       payment expense,
       net of purchase
       price
      accounting
       adjustments          16,704          31,003    34,887       52,501
      Interest expense,
       net of amounts
       capitalized          76,802          98,080   154,670      166,058
      Loss on
       extinguishment of
       debt and credit
       facilities, net      31,871         107,756    34,437      125,713
      Interest and
       investment income
       (loss)                 (378)         (9,323)    2,892       (2,157)
      Other (loss) income      601            (749)     (728)      (1,259)
      Income tax expense     1,466           1,115     2,633        2,229

    Adjusted EBITDA       $154,313        $132,219  $312,070     $241,055
                          ========        ========  ========     ========


(8) The following tables reconcile our adjusted results of operations to our actual results of operations:


                                    Unaudited For the Three Months Ended June
                                              30, 2010
                                    -----------------------------------------
    (in thousands)                     As           Purchase
                                   Reported          Price
                                   --------       Accounting
                                                  Adjustments
                                                  -----------

    Revenue:
        Subscriber revenue,
         including effects of
         rebates                    $601,630           $3,986
        Advertising revenue,
         net of agency fees           15,797                -
        Equipment revenue             18,520                -
        Other revenue                 63,814            1,813
                                      ------            -----
    Total revenue                    699,761            5,799
    Operating expenses
     (depreciation and
     amortization
        shown separately below)
         (1)
        Cost of services:
           Revenue share and
            royalties                107,901           26,417
           Programming and content    72,019           13,702
           Customer service and
            billing                   58,414               78
           Satellite and
            transmission              19,982              303
           Cost of equipment           7,805                -
        Subscriber acquisition
         costs                       110,383           20,300
        Sales and marketing           56,177            3,661
        Engineering, design and
         development                  11,247              148
        General and
         administrative               59,166              248
        Depreciation and
         amortization  (2)            69,230                -
        Restructuring,
         impairments and
         related costs                 1,803                -
        Share-based payment
         expense                           -                -
    Total operating
     expenses                        574,127           64,857
                                     -------           ------
        Income (loss) from
         operations                 $125,634         $(59,058)
                                    ========         ========

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

    Programming and content           $1,662             $128
    Customer service and
     billing                             651               78
    Satellite and
     transmission                        968               82
    Sales and marketing                2,643              119
    Engineering, design and
     development                       1,612              148
    General and
     administrative                    8,365              248


    Total share-based
     payment expense                 $15,901             $803
                                     =======             ====




                                   Unaudited For the Three Months Ended June
                                      30, 2010
                                   -----------------------------------------
    (in thousands)                 Allocation       Adjusted
                                   of Share-        --------
                                     based
                                    Payment
                                    Expense
                                    -------

    Revenue:
        Subscriber revenue,
         including effects of
         rebates                           $-       $605,616
        Advertising revenue,
         net of agency fees                 -         15,797
        Equipment revenue                   -         18,520
        Other revenue                       -         65,627
                                          ---         ------
    Total revenue                           -        705,560
    Operating expenses
     (depreciation and
     amortization
        shown separately below)
         (1)
        Cost of services:
           Revenue share and
            royalties                       -        134,318
           Programming and content     (1,790)        83,931
           Customer service and
            billing                      (729)        57,763
           Satellite and
            transmission               (1,050)        19,235
           Cost of equipment                -          7,805
        Subscriber acquisition
         costs                              -        130,683
        Sales and marketing            (2,762)        57,076
        Engineering, design and
         development                   (1,760)         9,635
        General and
         administrative                (8,613)        50,801
        Depreciation and
         amortization  (2)                  -         69,230
        Restructuring,
         impairments and
         related costs                      -          1,803
        Share-based payment
         expense                       16,704         16,704
    Total operating
     expenses                               -        638,984
                                          ---        -------
        Income (loss) from
         operations                        $-        $66,576
                                          ===        =======

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

    Programming and content                $-         $1,790
    Customer service and
     billing                                -            729
    Satellite and
     transmission                           -          1,050
    Sales and marketing                     -          2,762
    Engineering, design and
     development                            -          1,760
    General and
     administrative                         -          8,613


    Total share-based
     payment expense                       $-        $16,704
                                          ===        =======



    (2) Purchase price accounting adjustments included in the tables
    above exclude the incremental depreciation and amortization
    associated with the $785 million stepped up basis in property,
    equipment and intangible assets as a result of the merger with XM.
    The increased depreciation and amortization for the three months
    ended June 30, 2010 was $17 million.


                                    Unaudited For the Three Months Ended June
                                              30, 2009
                                    -----------------------------------------
    (in thousands)                     As           Purchase
                                   Reported          Price
                                   --------       Accounting
                                                  Adjustments
                                                  -----------

    Revenue:
        Subscriber revenue,
         including effects of
         rebates                    $561,763          $15,195
        Advertising revenue, net
         of agency fees               12,564                -
        Equipment revenue             10,928                -
        Other revenue                  5,574            1,812
                                       -----            -----
    Total revenue                    590,829           17,007
    Operating expenses
     (depreciation and
     amortization
        shown separately below)
         (1)
        Cost of services:
           Revenue share and
            royalties                 95,831           21,840
           Programming and content    72,102           17,701
           Customer service and
            billing                   58,833              126
           Satellite and
            transmission              19,615              354
           Cost of equipment           8,051                -
        Subscriber acquisition
         costs                        67,651           13,337
        Sales and marketing           48,693            3,173
        Engineering, design and
         development                  11,944              247
        General and
         administrative               66,716              406
        Depreciation and
         amortization (2)             77,158                -
        Restructuring,
         impairments and related
         costs                        27,000                -
        Share-based payment
         expense                           -                -
                                         ---              ---
    Total operating expenses         553,594           57,184
                                     -------           ------
        Income (loss) from
         operations                  $37,235         $(40,177)
                                     =======         ========

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

    Programming and content           $1,891             $205
    Customer service and
     billing                             779              126
    Satellite and
     transmission                      1,177              133
    Sales and marketing                3,072              184
    Engineering, design and
     development                       1,821              247
    General and
     administrative                   20,961              407


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




                                   Unaudited For the Three Months Ended June
                                      30, 2009
                                   -----------------------------------------
    (in thousands)                 Allocation       Adjusted
                                   of Share-        --------
                                     based
                                    Payment
                                    Expense
                                    -------

    Revenue:
        Subscriber revenue,
         including effects of
         rebates                           $-       $576,958
        Advertising revenue, net
         of agency fees                     -         12,564
        Equipment revenue                   -         10,928
        Other revenue                       -          7,386
                                          ---          -----
    Total revenue                           -        607,836
    Operating expenses
     (depreciation and
     amortization
        shown separately below)
         (1)
        Cost of services:
           Revenue share and
            royalties                       -        117,671
           Programming and content     (2,096)        87,707
           Customer service and
            billing                      (905)        58,054
           Satellite and
            transmission               (1,310)        18,659
           Cost of equipment                -          8,051
        Subscriber acquisition
         costs                              -         80,988
        Sales and marketing            (3,256)        48,610
        Engineering, design and
         development                   (2,068)        10,123
        General and
         administrative               (21,368)        45,754
        Depreciation and
         amortization (2)                   -         77,158
        Restructuring,
         impairments and related
         costs                              -         27,000
        Share-based payment
         expense                       31,003         31,003
                                       ------         ------
    Total operating expenses                -        610,778
                                          ---        -------
        Income (loss) from
         operations                        $-        $(2,942)
                                          ===        =======

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

    Programming and content                $-         $2,096
    Customer service and
     billing                                -            905
    Satellite and
     transmission                           -          1,310
    Sales and marketing                     -          3,256
    Engineering, design and
     development                            -          2,068
    General and
     administrative                         -         21,368


    Total share-based
     payment expense                       $-        $31,003
                                          ===        =======



    (2) Purchase price accounting adjustments included in the tables
    above exclude the incremental depreciation and amortization
    associated with the $785 million stepped up basis in property,
    equipment and intangible assets as a result of the merger with XM.
    The increased depreciation and amortization for the three months
    ended June 30, 2009 was $31 million.


                                 Unaudited For the Six Months Ended June 30,
                                              2010
                                --------------------------------------------
    (in thousands)                  As            Purchase
                                Reported           Price
                                --------        Accounting
                                                Adjustments
                                                -----------

    Revenue:
        Subscriber revenue,
         including effects
         of rebates             $1,181,139           $8,952
        Advertising revenue,
         net of agency fees         30,323                -
        Equipment revenue           32,802                -
        Other revenue              119,280            3,626
                                   -------            -----
    Total revenue                1,363,544           12,578
    Operating expenses
     (depreciation and
     amortization
        shown separately
         below) (1)
        Cost of services:
           Revenue share and
            royalties              206,085           51,772
           Programming and
            content                150,452           28,850
           Customer service and
            billing                114,625              172
           Satellite and
            transmission            40,100              626
           Cost of equipment        15,724                -
        Subscriber
         acquisition costs         199,762           37,966
        Sales and marketing        105,294            7,186
        Engineering, design
         and development            22,684              334
        General and
         administrative            116,746              561
        Depreciation and
         amortization (2)          139,495                -
        Restructuring,
         impairments and
         related costs               1,803                -
        Share-based payment
         expense                         -                -
    Total operating
     expenses                    1,112,770          127,467
                                 ---------          -------
        Income (loss) from
         operations               $250,774        $(114,889)
                                  ========        =========

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

    Programming and
     content                        $4,612             $288
    Customer service and
     billing                         1,285              172
    Satellite and
     transmission                    1,919              185
    Sales and marketing              5,198              264
    Engineering, design
     and development                 3,222              334
    General and
     administrative                 16,847              561


    Total share-based
     payment expense               $33,083           $1,804
                                   =======           ======




                                 Unaudited For the Six Months Ended June 30,
                                       2010
                                --------------------------------------------
    (in thousands)               Allocation       Adjusted
                                 of Share-        --------
                                   based
                                  Payment
                                  Expense
                                  -------

    Revenue:
        Subscriber revenue,
         including effects
         of rebates                      $-      $1,190,091
        Advertising revenue,
         net of agency fees               -          30,323
        Equipment revenue                 -          32,802
        Other revenue                     -         122,906
                                        ---         -------
    Total revenue                         -       1,376,122
    Operating expenses
     (depreciation and
     amortization
        shown separately
         below) (1)
        Cost of services:
           Revenue share and
            royalties                     -         257,857
           Programming and
            content                  (4,900)        174,402
           Customer service and
            billing                  (1,457)        113,340
           Satellite and
            transmission             (2,104)         38,622
           Cost of equipment              -          15,724
        Subscriber
         acquisition costs                -         237,728
        Sales and marketing          (5,462)        107,018
        Engineering, design
         and development             (3,556)         19,462
        General and
         administrative             (17,408)         99,899
        Depreciation and
         amortization (2)                 -         139,495
        Restructuring,
         impairments and
         related costs                    -           1,803
        Share-based payment
         expense                     34,887          34,887
    Total operating
     expenses                             -       1,240,237
                                        ---       ---------
        Income (loss) from
         operations                      $-        $135,885
                                        ===        ========

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

    Programming and
     content                             $-          $4,900
    Customer service and
     billing                              -           1,457
    Satellite and
     transmission                         -           2,104
    Sales and marketing                   -           5,462
    Engineering, design
     and development                      -           3,556
    General and
     administrative                       -          17,408


    Total share-based
     payment expense                     $-         $34,887
                                        ===         =======



    (2) Purchase price accounting adjustments included in the tables
    above exclude the incremental depreciation and amortization
    associated with the $785 million stepped up basis in property,
    equipment and intangible assets as a result of the merger with XM.
    The increased depreciation and amortization for the six months ended
    June 30, 2010 was $36 million.


                                 Unaudited For the Six Months Ended June 30,
                                              2009
                                --------------------------------------------
    (in thousands)                  As            Purchase
                                Reported           Price
                                --------        Accounting
                                                Adjustments
                                                -----------

    Revenue:
        Subscriber revenue,
         including effects
         of rebates             $1,121,151          $31,883
        Advertising revenue,
         net of agency fees         24,869                -
        Equipment revenue           20,837                -
        Other revenue               10,951            3,626
                                    ------            -----
    Total revenue                1,177,808           35,509
    Operating expenses
     (depreciation and
     amortization
        shown separately
         below) (1)
        Cost of services:
           Revenue share and
            royalties              196,297           42,635
           Programming and
            content                152,511           36,592
           Customer service and
            billing                119,041              243
           Satellite and
            transmission            39,894              681
           Cost of equipment        16,044                -
        Subscriber
         acquisition costs         140,719           23,979
        Sales and marketing        100,116            6,831
        Engineering, design
         and development            21,723              548
        General and
         administrative            126,031              878
        Depreciation and
         amortization (2)          159,524                -
        Restructuring,
         impairments and
         related costs              27,614                -
        Share-based payment
         expense                         -                -
                                       ---              ---
    Total operating
     expenses                    1,099,514          112,387
                                 ---------          -------
        Income (loss) from
         operations                $78,294         $(76,878)
                                   =======         ========

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

    Programming and
     content                        $4,381             $336
    Customer service and
     billing                         1,318              243
    Satellite and
     transmission                    1,934              240
    Sales and marketing              7,358              377
    Engineering, design
     and development                 3,188              548
    General and
     administrative                 31,699              879


    Total share-based
     payment expense               $49,878           $2,623
                                   =======           ======




                                 Unaudited For the Six Months Ended June 30,
                                       2009
                                --------------------------------------------
    (in thousands)               Allocation       Adjusted
                                 of Share-        --------
                                   based
                                  Payment
                                  Expense
                                  -------

    Revenue:
        Subscriber revenue,
         including effects
         of rebates                      $-      $1,153,034
        Advertising revenue,
         net of agency fees               -          24,869
        Equipment revenue                 -          20,837
        Other revenue                     -          14,577
                                        ---          ------
    Total revenue                         -       1,213,317
    Operating expenses
     (depreciation and
     amortization
        shown separately
         below) (1)
        Cost of services:
           Revenue share and
            royalties                     -         238,932
           Programming and
            content                  (4,717)        184,386
           Customer service and
            billing                  (1,561)        117,723
           Satellite and
            transmission             (2,174)         38,401
           Cost of equipment              -          16,044
        Subscriber
         acquisition costs                -         164,698
        Sales and marketing          (7,735)         99,212
        Engineering, design
         and development             (3,736)         18,535
        General and
         administrative             (32,578)         94,331
        Depreciation and
         amortization (2)                 -         159,524
        Restructuring,
         impairments and
         related costs                    -          27,614
        Share-based payment
         expense                     52,501          52,501
                                     ------          ------
    Total operating
     expenses                             -       1,211,901
                                        ---       ---------
        Income (loss) from
         operations                      $-          $1,416
                                        ===          ======

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

    Programming and
     content                             $-          $4,717
    Customer service and
     billing                              -           1,561
    Satellite and
     transmission                         -           2,174
    Sales and marketing                   -           7,735
    Engineering, design
     and development                      -           3,736
    General and
     administrative                       -          32,578


    Total share-based
     payment expense                     $-         $52,501
                                        ===         =======



    (2) Purchase price accounting adjustments included in the tables
    above exclude the incremental depreciation and amortization
    associated with the $785 million stepped up basis in property,
    equipment and intangible assets as a result of the merger with XM.
    The increased depreciation and amortization for the six months ended
    June 30, 2009 was $62 million.

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 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," "will continue,"" is anticipated," "estimated," "intend," "plan", "projection," "outlook" or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of SIRIUS 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 dependence upon automakers and other third parties, the substantial indebtedness of SIRIUS and XM; the useful life of our satellites; and our competitive position versus other forms of audio and video entertainment. 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, 2009 and XM's Annual Report on Form 10-K for the year ended December 31, 2009, 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

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